Latest / The Email Marketing Podcast with Fexingo: Newsletters, Open Rates, and Subscriber Growth / How Email List Segmentation Boosted a Retailer's Revenue by 25 Percent
Transcript
- Lucas: So, Luna, we talk a lot about growing lists and boosting open rates, but today I want to dig into something that's arguably more important: what you do with the people who are already on your list. Luna: You mean segmentation. Because sending the same email to everyone is like using a megaphone in a library. Lucas: Exactly. And there's a specific case I've been digging into that really illustrates the power of segmentation. It's a mid-sized online retailer, not a household name, but their numbers are pretty remarkable. Luna: Okay, I'm curious. What did they do? Lucas: So, they had a list of about 150,000 subscribers and they were seeing open rates around 20 percent, which was fine, but revenue per email was stagnating. They decided to segment based on behavior, not just demographics. They created three main segments: new subscribers, high-intent browsers, and lapsed buyers. Luna: And what counted as 'high-intent'? Like, people who visited the site multiple times? Lucas: Right, they looked at people who had visited product pages at least three times in the last two weeks but hadn't purchased. And lapsed buyers were those who hadn't bought in over six months. For each segment, they crafted tailored content. Luna: So what did they send to each? Lucas: For new subscribers, they sent a welcome series with a 10 percent discount and top-selling products. For high-intent browsers, they sent emails that highlighted the specific products they were viewing, along with social proof like reviews. And for lapsed buyers, they sent a win-back campaign with a stronger incentive, like free shipping, and a little message like 'We miss you.' Luna: And the results? Lucas: Within three months, their overall open rate jumped to 28 percent, but more importantly, click-through rates went from about 2 percent to nearly 4 percent. And the revenue attributed to email increased by 25 percent quarter-over-quarter. Luna: Twenty-five percent is huge. And they didn't grow the list at all? Lucas: No, the list size stayed flat. They just made their emails more relevant. It's a classic case of working smarter, not harder. Luna: It's interesting, because a lot of people think segmentation requires complex tools, but even basic behavior-based segments can make a big difference. Lucas: Absolutely. And the beauty is you can start with just two segments. Even splitting your list into new vs. existing customers can yield better results than a one-size-fits-all approach. Luna: So what's the data collection piece? You need to track behavior, right? Lucas: Right, and a lot of email platforms now do this automatically. You can set up tags or segments based on pages visited, purchase history, or engagement. The retailer used a combination of their ESP's tracking and some custom fields to pull this together. Luna: And what about the content itself? Did they use dynamic blocks? Lucas: They did. For the high-intent segment, they used dynamic content that swapped in the actual products each person had been browsing. So instead of a generic 'You might like these,' it showed the exact hiking boots they looked at. Luna: That's clever. That's the kind of personalization that makes people feel seen, not just like another email in the inbox. Lucas: Exactly. And it's not just about products. They also tested different subject lines for each segment. For lapsed buyers, 'We miss you' outperformed '20% off your next order' by 15 percent in opens. Luna: Emotional appeal over discount. That's a good insight. Lucas: Yeah, and it ties into a broader point: segmentation forces you to think about the subscriber's context. You're not just blasting a message; you're having a conversation. Luna: And that conversation drives revenue. So what metrics should a business track to see if segmentation is working? Lucas: I'd look at open rate, click-through rate, and revenue per email sent. But also check unsubscribe rate and spam complaints—if those go down, you're on the right track. Luna: And one more thing: it's not a one-time thing. You have to keep refining your segments as people move between them. Lucas: Exactly. A high-intent browser who buys becomes a new customer, and then a repeat buyer over time. The retailer used automation to move subscribers between segments based on their actions, so the emails stayed relevant. Luna: So, Lucas, what's the one takeaway you want listeners to remember? Lucas: That even a simple segmentation strategy—three segments, behavior-based—can boost revenue by double digits without spending a dime on new subscribers. And that's something any business can try next week. Luna: And if you're looking for more resources, we've got you covered. We keep these episodes ad-free, and if you want to support that, you can find us at buy me a coffee dot com slash fexingo. Lucas: Yeah, appreciate that. But back to the topic—another thing that surprised me was the impact on deliverability. When open rates and engagement go up, ISPs are more likely to put your emails in the inbox instead of the promotions tab. Luna: That's a nice side effect, right? Better engagement leads to better inbox placement. Lucas: And that creates a virtuous cycle. More people see your emails, they engage more, and your sender reputation improves. Luna: So segmentation isn't just about revenue—it's about the health of your entire email program. Lucas: Exactly. And it's not just for big brands. In fact, small businesses might benefit even more because they can be more nimble with their segments. Luna: What would be a simple first step for someone listening right now? Lucas: Start by creating two segments: people who have opened or clicked in the last 30 days, and everyone else. Send your regular campaign to the first group, and a re-engagement attempt to the second. See what happens. Luna: And if that works, you can gradually add more segments based on behavior. Lucas: That's the beauty—it's iterative. You don't need a perfect data infrastructure from day one. Luna: It's like they say: the best time to start was yesterday, the next best time is now. Lucas: Well said. And on that note, I think we've given everyone something to think about. Luna: Absolutely. Thanks for joining us, and we'll see you next time. Lucas: Take care, everyone.