How Email Segmentation Can Improve ROI Up to 4,300%

May 19, 2015

In the early days of email, someone discovered that if thousands of emails were sent out with a sales pitch, the occasional person would bite and a sale would happen. The math was simple: more emails meant more purchases. Of course, over time people got tired of getting solicited via email and junk email boxes quickly overflowed.

For a while, businesses may have thought that email marketing was dead, but nothing could be further from the truth. Rather than becoming extinct, email marketing has evolved into one of the most budget-friendly marketing methods, and it’s all thanks to one tactic: segmentation.

What is Email Segmentation?

The process of segmentation turns the math of early email blasts on its head. Rather than spraying out as many messages as possible in the hopes of something sticking, segmentation divides up the recipients into groups that share a similar interest, goal, or profile. Then, rather than sending more messages, the idea is to send fewer messages while making each one perfectly relevant to the recipient.

Removing Spam from the Vocabulary

When someone receives too many irrelevant email messages, they start to dismiss them all as spam. On the other hand, most people use email every day to have business conversations and to complete online transactions. With segmentation, companies can move away from the word “spam” by sending the right messages at the right time–and opening the door for a conversation. This two-way channel reassures the customer that there is a person behind the message, someone who has thought through the message and believes it to be helpful and useful. In other words, companies start to gain consumers’ trust.

Leading to a Sale

Besides improving consumers’ perception about email marketing, segmentation works because it successfully turns leads into customers. When a company knows a message’s target audience and the best message for a given audience, content can be tailored to ease the customer’s pressure points. A company can now serve as a reliable source of help and a place to turn to when consumers want to make their lives easier. Becoming a resource lays another brick on the foundation of trust that people need in order to become customers.

Brand Advocates: The Ultimate Prize

Email segmentation also creates Brand Advocates for a company. A Brand Advocate is someone who has either made a purchase and is happy with their decision or someone who has received timely and relevant information and feels confident about the company. These people then refer their friends and family by forwarding emails along to someone else they think would enjoy them. This can expand an email’s reach exponentially and provide a continual source of fresh leads from an audience that was otherwise unreachable.

Getting the Math Right

Today’s email marketing revolves around getting the math right. Get rid of the idea that more messages equal more sales. Instead, work on sending the right message to the right person at the right time. Companies must know who they are sending each message to and then carefully consider which message to send depending on where the customer is in the sales cycle. By segmenting the list in this way, companies can build trust, build sales, and build up to that 4300% ROI.

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