Step-By-Step Guide to Implement Audience Segmentation

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Just like their fingerprints, every user is different. And if you send a similar email to all your users, what do you think will happen? Some might read it; some might delete it, or even worse, some might report it as spam. To avoid such problems, you should use audience segmentation in your email marketing strategy.

According to campaign monitor, segmented email marketing campaigns increase revenue by 760%. Thus, segmentation is crucial for your email campaign success,, but you must thoroughly understand it. This article will help you understand the basics of audience segmentation, different criteria to segment, and steps to carry out segmentation.

Table of content

What is audience segmentation?

Audience segmentation is a marketing strategy that divides your audience into subgroups based on their shared preferences, interests, demographics, etc. It helps build brand awareness, improve engagement level and boost your email marketing campaigns.

For example, you can create two different segments of your users - one segment includes users who open your email on mobile and others those who open it on desktops.

Why should you carry out audience segmentation?

Audience segmentation provides the following benefits to an organization:

Better targeting

It makes targeting more convenient and easy. By segmentation, you can create a more specific audience having similar characteristics. In this way, you can target them with more relevant content.

Higher conversions

The marketing team can customize and personalize the content according to the segments. Thus, the customers feel more valued, and they engage more with your content. This, in turn, will lead to more conversions and will also boost your email marketing ROI.

Helps identify growth opportunities

With segmentation, you can better understand your audience’s problem, and use this information to explore areas where you can expand your marketing efforts. Doing so will help in identifying new development opportunities.

Two important aspects of audience segmentation

Before we talk about criterias to segment your audience, you should know about traits and attributes.

Traits

Traits are pieces of information that are often inherent. For example, if we say a person is shy, then shyness is his/her personality trait.

Attributes

When we talk about attributes, we consider a person’s behavior learned over a period of time. Unlike traits, attributes can change over time. Attributes provide information about how a person might react in a given situation.

Four criteria to segment your audience or create cohorts

Audience Segmentation.jpg

Demography

Demographic segmentation refers to the segment audience based on the structure of the population. You can create different segments based on the following demographic attributes:

You can segment your audience based on the following demographic aspects:

  • Age
  • Gender
  • Family size
  • Family life cycle
  • Income
  • Occupation
  • Education
  • Generation
  • Ethnicity
  • Nationality
  • Religion
  • Economic health

For example, Byjus, a leading Edtech startup, segments its audience based on age group and educational qualification. For example, one of their segments consists of children in 1-3 classes (4-6 years old). They have an app - Byju’s learning app, designed specifically for children in this age group. They target this audience by sending out emails and messages to their parents.

Geography

Geographic segmentation allows you to divide your audience based on where they live.

You can segment your audience using the following attributes:

  • Continent
  • Country
  • State, city, town
  • Neighborhood
  • Pincode
  • Timezone
  • GPS location
  • Seasonal changes

For instance, the e-commerce brand Amazon has different websites for different countries. It has amazon.in for India, amazon.ca for Canada, amazon.us for the USA, etc.

Psychography

Psychographic segmentation refers to grouping your audience based on attitudes, opinions, personal values, and other traits. Psychographics go beyond demography and geography.

For instance, Two people may have the same demographics: they may be in the same age group, live in the same city, and may use the same device, yet have different interests and lifestyles. For example, one could be interested in sports while the other likes to play video games.

Brands like IKEA, and Nike uses psychographic segmentation is following way:

ValuesInterests
IKEA targets users who value and promote eco-friendly products using their sustainable strategy, “People and Planet Positive.”Nike targets active individuals who take pleasure in sports, gym regularly, are athletes, and are passionate about sports, which tend to be part of their life.

Behavior

Behavioral segmentation refers to the criteria of segmenting audiences based on their plastic actions and activity. One of the models you can use to segment your audience is RFM model -

  • Recency

    • When was the last purchase they made/visited your website/opened your email?

  • Frequency

    • Numbers of purchases made by them/clicked on email?

  • Monetary

    • How much did they spend?

You can segment your audience based on their [lifecycle] as well. For example, you can look at whether a user is a - new user, repeated user, potential user, active user, ex-user, VIP user, etc.

Step-by-step process to carry out audience segmentation

Carrying out segmentation in the proper order is crucial. Following is the step-by-step guide to do audience segmentation:

Collect audience’s data from analytics

Firstly, collect all the data about your audience from your analytics. This information is the foundation of your segmentation process. Some of the aspects you can look at are:

  • Engagement level
  • Purchase behavior
  • Browsing activities
  • Interests, value, lifestyle
  • Platform with highest traffic
  • New user signup rate, etc.

For example, you may identify that 20% of new users between 18-30 who sign up for your newsletter have a low email engagement rate. In contrast, old users between the same age group have a 5% higher engagement rate on your email newsletter.

Determine how would you segment your audience

Here you should decide which criteria will be the most suitable to divide or segment the users. You can use any of the four ways discussed above to divide your audience. After you choose how you want to segment the audience, you can create different possible segments.

Evaluate and finalize the segment to target

For example, if you want to improve your newsletter’s engagement rate, but you target active users instead of inactive users. In that case, segmentation will not yield the results. Thus, it’s crucial to choose the right segment to target. M.A.S.D.A is criteria used by marketers to ensure that the segment they will target is beneficial for the marketing strategy. Here is what M.A.S.D.A mean:

M.A.S.D.A.What it means?
Measurable
  • Is it quantifiable?
  • Are you able to measure the size, purchasing power of the market segment to a reasonable degree of accuracy?
  • This will help market strategies to know how much resources and effort they need to put into this segment.
    Accessible
  • Are you able to access the segment?
  • Does the audience in the segment can reach your products and services?
  • You need to target an audience you can connect, reach and serve with the right platform.
    Substantial
  • Is your segment large enough to create an impact?
  • Do they have the potential to convert into paying customers?
    Differentiable
  • Are all the users in the chosen segment similar in a relevant way?
  • Whether the segment is relatively unique to other segments?
    Actionable
  • Is this segment able to provide empirical data?
  • Will it provide quantifiable data.
  • You cannot achieve your goals if your segments do not provide you with any actionable insights.

    Conclusion

    Now that we have covered everything about audience segmentation, it’s your turn to put this into practice. But keep in mind, segmentation takes time to generate desired results. Therefore, you must be patient throughout the process.

    Using email marketing tools makes this process a lot easier and smooth. Tools like Mailmodo help you segment your audience most effectively and appropriately. In addition, if you sign up with Mailmodo, you will get one month of free credits.

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