Email Segmentation: Why You Need It and How To Do It

Following up on the first feature of Jet’s Favorite Freesources being email marketing through MailChimp, we figured we could dig in a little bit more to provide some insight on segmentation, a strategy that can help you communicate better with your customers via email. If you haven’t read up on how to improve your pet store marketing with free email services like MailChimp in the first Freesources piece, click here!

What is Segmentation?

Pet Engine Marketing Email Segmentation

Customer segmentation is the process of dividing customers into groups, or segments, based on common characteristics. This allows you to better market your pet store to each segment effectively and appropriately. MailChimp allows you to segment your audience based on a wide variety of characteristics that can be input from their insights, or from your collected data via your point of sale system, website, or other sources. Typically, segmentation is used as a personalization tactic to deliver more relevant marketing (email or otherwise) to subscribers based on their geographic location, interests, purchase history, and much more. This allows you to control the messaging and results in more effective marketing and more efficient ad spend.

The Impact of Segmentation

We’ve got a few examples here, but the list is truly endless.

  • Communicate messages that resonate with a specific buyer. You can tailor your message based on demographic, sales volume, geography, and more. For pet store marketing, consider it based on pet birthdays, type of pet, age of pet, etc.

  • Choose the best communication tool for that segment. One group may respond better to a direct email, while another might resonate with social media or newsletter, or even different types of emails.

  • Share new products or services with a specific audience

  • Create better or more appropriate customer relationships based on sales volume. Put the focus on your customers that keep your pet store booming.

  • Test pricing with different segments.

  • Improve your customer service.

  • Upsell and cross-sell other products and services.

See? Lots of ideas to work from there. We suggest starting with 1 or 2, testing the waters (response rates, open rates, engagement), and building from there. Trial and error is a perfectly acceptable strategy when trying new marketing tactics.

How to Segment Your Customers

Alright, you’ve followed so far. You’ve signed up for MailChimp, imported customer data from your point of sale system, and now you’re ready to market your pet store with email segmentation. Here’s a quick way to segment your customers based on sales volume:

  1. Put together a list of all of your customers and their annual sales volume from last year.

  2. Sort them based on highest sales volume to lowest sales volume.

  3. Divide your total sales volume by 5. For example, if you do $1M in sales last year, you’d have 5 segments of $200,000 each.

  4. Now using the $200,000 mark, go down your list of customers and put a line for every $200,000 on sales.

  5. You now have 5 segments of customers.

Pet Engine Marketing Customer Segmentation

What you’re likely to see is that the top segment might only include a few customers. The second segment will be a bit bigger, the middle segment might be a bit larger, and as you go down the segments it will likely get bigger and bigger. By the time you reach your 5th segment, you’ll see that it takes a lot of those customers to make up $200,000 in sales. Those customers are important, but the few at the top that spend a lot of money at your pet store are the relationships worth building, cherishing, and marketing to. Here’s an example of what it might look like:

  • Segment #1 - Sales Volume = $239,133 - 2 customers (avg. sales volume $119k)

  • Segment #2 - Sales Volume = $225,966 - 4 customers (avg. sales volume $56k)

  • Segment #3 - Sales Volume = $204,285 - 14 customers (avg. sales volume $14k)

  • Segment #4 - Sales Volume = $200,281 - 41 customers (avg. sales volume $4.8k)

  • Segment #5 - Sales Volume = $198,265 - 144 customers (avg. sales volume $1.3k)

So, think about this: how hard would it be to replace those 2 customers in Segment #1 vs. replacing 2 customers in Segment #5? It is extremely difficult to replace customers in the top segment, and they are really rare - thus, there’s only 2 of them!

So ask yourself, how much time or money am I spending on marketing to or with customers in Segments 1-3 (20 customers) versus customers in segments 4 and 5 (185 customers)?

Are you rewarding your top customers appropriately? Are you incentivizing all of your customers the same way? Are there better ways to market your pet store and sell products to different segments?

Every business is different, but almost all businesses can break down their customers into categories that will make it easier to market and sell their products and services.

SUMMARY

Hopefully you learned something today about segmentation and email marketing for your pet stores. The goal was not to confuse you, but to open your mind to the possibilities available. Like the idea of it, but not sure you want to handle it? Sounds like you should schedule a call with us - we know that for pet store owners there are a million things to do and only 24 hours in a day.

For more pet store marketing tips, ideas, plans, and tools, stay tuned, follow us on our social platforms, and subscribe to our Insider!