Segmentation Still The Best Way to Drive ROI in Ecommerce

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Segmentation Still The Best Way to Drive ROI in Ecommerce
Segmentation Still The Best Way to Drive ROI in Ecommerce

A Klaviyo email analysis report released today demonstrated just how powerful marketing segmentation is for ROI. 

Email campaigns sent to a segmented list bested those sent to the entire list in open rates (18.29% vs. 12.93%), click-through rates (2.17% vs. 1.33%), and revenue per recipient ($.17 vs. $.11).

Klaviyo's results stemmed from analysis of 1.5 billion emails from 1,000 of the email and advertising company's customers in Q4 2016.

Segmentation also continues to be a case of the haves and have-nots. The report said companies studied with $10 million in revenue had lists in 10 times more segments than companies with fewer than $100,000 in revenue.

"There are two main reasons for the disparity we saw in number of segments. First, in the cases where revenue correlates with a customer base, smaller companies have smaller lists. And smaller lists themselves limit how deep you can go with segmentation," said Agata Celmerowski, VP Marketing at Klaviyo, in an email. "Second, there's a perception that segmentation is difficult, that the tools are expensive, and that you need a lot of resources to execute. If you're a small but growing business, that perception is enough to keep you from doing it.”

Celmerowski said companies should begin thinking about segmentation when they hit around 5,000 email subscribers.

Those who did segment saw rewards in multiple scenarios. By sending abandoned cart emails, which are triggered when a shopper fills a shopping cart but without following through to purchase, “generated significant revenue per recipient, ranging from $1.23 for stores with an average order size of under $50 to $14.14 for stores with an average order size over $200,” according to Klaviyo.

The study also provided some context into the value of different types of segmented email, such as welcome series, the aforementioned abandoned cart emails, browse abandonment emails, and customer winback emails.

“Companies with an average order size of $100 to $200 had an average revenue per recipient of $7.01 for abandoned cart flows, $3.34 for welcome series, $1.95 for browse abandonment emails, and $0.84 for winback emails,” the company said in its release.

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