Latest / The Email Marketing Podcast with Fexingo: Newsletters, Open Rates, and Subscriber Growth / Why List Segmentation Doubles Email Revenue
Transcript
- Lucas: So we all know the statistic: the average email open rate across industries hovers around twenty-two percent. But here's the thing—that number is almost meaningless if you're blasting the same message to your entire list. Luna: I've definitely been guilty of that. Just write one newsletter, hit send, hope for the best. Lucas: Right, and that's fine when you're starting out. But the biggest lever in email marketing isn't subject lines or send time—it's segmentation. Splitting your list into groups based on who people are and how they behave. Luna: I keep hearing that, but I've also heard small teams say 'we just don't have the time or the tooling to do that well.' Lucas: That's exactly what we're going to drill into today. I want to walk through a concrete case. There's a mid-size e-commerce brand—let's call them 'Urban Threads'—they sell men's apparel online. Last year, they were doing a weekly broadcast to their full list of about eighty thousand subscribers. Their open rate was averaging twenty-one percent, and revenue per email sent was about twelve cents. Luna: So basically one dollar twenty per ten emails. Not great. Lucas: Exactly. So they decided to try something different. Instead of one email to everyone, they split their list into three segments based on past purchase behavior. Segment one: bought something in the last ninety days. Segment two: bought between ninety days and twelve months ago. Segment three: never purchased—just signed up for the newsletter. Luna: So recency-based. That's a classic RFM approach—recency, frequency, monetary. Lucas: Exactly. But they kept it simple—just recency as the primary split. Then they wrote a different email for each segment. For the recent buyers, they focused on accessories and outfit completers. For the lapsed buyers, a 'we miss you' offer with twenty percent off. For the non-buyers, an introduction to their best-selling products with a first-purchase discount. Luna: And what happened? Lucas: Over the next three months, their open rate for the recent-buyer segment jumped to thirty-nine percent. The lapsed-buyer segment hit twenty-eight percent. The non-buyers stayed around twenty-two percent. But the real story is revenue per email. The recent-buyer segment generated thirty-eight cents per email sent—more than triple the twelve cents they were getting before. Luna: Wow. So the same list, same product, just different messages based on where the customer is. Lucas: That's the whole game. But here's where it gets even more interesting. They took it a step further and split the recent buyers into two sub-segments: those who had clicked on an email in the last thirty days—'active engagers'—and those who hadn't. For the active engagers, they increased frequency to twice a week. For the non-clickers, they stayed at once a week. The active engagers' revenue per email rose to fifty-two cents. Luna: So you're basically rewarding engagement with more emails. That feels intuitive, but I bet most brands don't do it because they're afraid of unsubscribes. Lucas: That fear is real, but the data doesn't support it. Urban Threads saw their unsubscribe rate actually drop slightly after segmentation. When you send relevant content, people stay. The non-clickers didn't mind the weekly cadence—they just weren't interested in more. Luna: Okay, so for a small team listening right now—maybe a solo marketer or a two-person operation—what's the minimum viable segmentation they could start with today? Lucas: I'd say three segments is plenty. First, your active buyers—anyone who's purchased in the last ninety days. Second, your engaged non-buyers—people who open and click but haven't bought. Third, everyone else. You don't need fancy software. Most email service providers let you create segments based on purchase history and email engagement without any custom code. Luna: What about the 'everyone else' group—are they worth keeping? Lucas: That's the lapsed or cold segment. You can put them on a long-term re-engagement campaign—maybe one email every two weeks with a compelling offer. If they don't engage after six months, consider sunsetting them. A clean list is a healthy list. Luna: I've also seen people segment by content preference. Like, if someone clicks on a blog post about email marketing, you send them more of that, not product pitches. Lucas: That's a great next layer. In fact, Urban Threads eventually added a preference center where subscribers could choose 'men's basics,' 'trend pieces,' or 'accessories.' The revenue per email for people who opted into a preference was almost double that of the non-opted group. Luna: So the act of telling you what they want makes them more valuable. Lucas: It signals intent. And intent is the highest-value signal you can get in email. So the takeaway from this episode isn't 'buy a $500-a-month tool.' It's 'stop sending the same email to everyone.' Start with one split—buyers versus non-buyers. Then layer in engagement. Then, if you can, let them tell you what they want. Luna: I think that's a concrete enough playbook. And for anyone who wants to dig deeper, the RFM model is a great rabbit hole. Lucas: Exactly. We'll link to a simple RFM template in the show notes. Next time, we'll talk about subject line optimization—is it really as powerful as people say? Spoiler: not as much as segmentation. Luna: Looking forward to that. Thanks, Lucas. Lucas: Thanks, Luna. And thanks for listening.