Today, I’m thrilled to have Alexandra Edelstein on the show. Alexandra is a senior product manager at Klaviyo and she was also a speaker at my annual ecommerce conference The Sellers Summit.
At Klaviyo, she’s known as the resident expert when it comes to email list segmentation. So today we’re going to talk about the right way to segment your email list to maximize revenue for your ecommerce store.
What You’ll Learn
- Why blasting your entire list is bad
- Basic ways to segment your list
- How to maximize repeat purchases
- The main parameters used for segmentation
Other Resources And Books
- Klaviyo – Sign up for free
Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
EmergeCounsel.com – EmergeCounsel is the service I use for trademarks and to get advice on any issue related to intellectual property protection. Click here and get $100 OFF by mentioning the My Wife Quit Her Job podcast.
SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
But before we begin I want to thank Klaviyo for sponsoring this episode. Black Friday is right around the corner and for my e-commerce store email marketing is a heavy part of my holiday sales strategy. And in fact, last year, it was close to 50% of my overall sales. And of course as you all know klaviyo is the email marketing tool that I use for Bumblebee Linens now Klaviyo is the growth marketing platform chosen by over 20,000 Brands generating more than three point seven billion dollars in Revenue in just the last year and with the holiday season right around the corner klaviyo has created the ultimate planning guide for crushing those holiday Revenue targets for marketing creative to segmentation strategy. These are proven tactics for more personalized marketing, especially in time for the holiday season. To get ahold of this guide, visit Klaviyo.com/mywife. Once again, Klaviyo.com/mywife.
Also want to give a shout-out to Privy who’s a sponsor of the show. Privy is a tool that I use to build my email list for both my blog and my online store and right now I’m using Privy Display a cool Wheel of Fortune pop-up basically user gives your email for a chance to win valuable prizes in our store and customers love the gamification aspect of this and when implemented this form email signups increased by a 131%. Now, you can also use Privy to reduce car abandoned with cart saver pop-ups and abandoned cart email sequences as well one super low price that is much cheaper than using a full-blown email marketing solution. So bottom line Privy allows me to turn visitors into email subscribers and recover lost sales so head on over to privy.com/steve and try it for free if you decide you need to the more advanced features use coupon code MWQHJ for fifteen percent off once again that’s privy.com/steve. Now on to the show
Intro: Welcome to the My Wife Quit Her Job Podcast we will teach you how to create a business that suits your lifestyle so can spend more time with your family and focus on doing the things that you love. Here’s your host, Steve Chou.
Steve: Welcome to the My Wife Quit Her Job Podcast. I’m thrilled to have Alexandra Edelstein on the show. Now, Alexander is a senior product manager over at Klaviyo. And she was also a speaker at my annual e-commerce conference the Seller Summit and no surprise she is an expert when it comes to email marketing. And today what we’re going to do is we’re going to talk about the right way to segment your email list to maximize revenue for your eCommerce store and with that, welcome to the show, Alexandra. How are you doing today?
Alexandra: I’m doing well. Thanks. It’s great to be on.
Steve: You know what’s funny is we spent three days together. We didn’t actually get a chance to hang out all that much. For the people that are just kind of listening and don’t know who you are. Just give us a quick background and how you actually got into email marketing.
Alexandra: Yeah. Sure. So as you’ve mentioned I’m a senior product manager here at Klaviyo. I’ve actually been with Klaviyo for about four years. So quite some time and from the very early days. I spent a lot of time working with our customers learning about their needs their pain points so we can Could help build Klaviyo into what it is today. Prior to Klaviyo, I was actually working on a national entrepreneurship program with Goldman Sachs. And again working with entrepreneurs helping invest in their growth build five-year growth plans. And in order to reach those businesses nationally, which is a program. I launched and scaled. There was a lot of email and a lot of marketing. So I learned firsthand the pain points of needing to personalize communication at scale from that job.
When I transitioned over to Klaviyo being able to work with the same group of people businesses entrepreneurs, like everyone listening looking to scale and grow their companies. I could deeply relate to the challenges with really driving that targeted personalized communication with Technology Solutions that were really clunky and hard to use and it felt like if you really wanted to do anything cool you had to be a massive Enterprise company with developers all that and so when I joined Klaviyo, iy was fun to be part of the solution and since then I’ve grown into different product areas. And as of the last couple years, I’ve been focused on Automation and flows to help marketers automate and scale their communication.
Steve: Cool. And that’s exactly what we’re going to talk about. We’re going to talk about email segmentation. Now, what’s funny is I actually got a chance to watch the recording for your presentation because I didn’t get to watch it live. So this is like the perfect chance for me to talk to you about in person.
Alexandra: Oh okay.
Steve: So So just a couple basic questions in case the audience isn’t really even familiar with email segmentation. So first of all, what is it and why wouldn’t I just want to send an email blast to my entire list whenever I run a promotion?
Alexandra: That’s a really great question. What is segmentation? And why should you care? Ultimately, It really gets down to the one-on-one personalized communication that we use every day and honestly take for granted every day and our personal relationships and the relationships were building with our friends, with our family, with our colleagues, with new people we meet on the street. As human beings we’re constantly listening and learning about others that we talked to either in the same conversation or over time and we use that data that we accumulate to build relationships to have more relevant conversations. It may seem really transactional when you when you spell it out, but ultimately as humans were really good at listening, analyzing and then communicating to be relevant and to not sound tone deaf and to Built trust and all the things that come along with actually having a personal relationship.
The challenge when it comes to marketing and especially marketing to a large customer audiences is that we aren’t able to get to know each one of our customers individually all of our subscribers and the sheer scale of it makes it really hard to do that same type of thing. You know, work so well in our personal lives, it’s really hard to learn about individuals that pot buy from us, that subscribe. It’s hard to analyze that data and then it’s really hard to personalize what we put in front of them and how we communicate with them. So segmentation is really a way to do that at scale by starting to think about the things that do make your customers and subscribers unique, it means using your data in order to analyze and figure out these audiences, group them with common characteristics and you want to think about things that will motivate people and that will really make them feel like you’re reaching out to them.
So for example, if you have a mom, let’s say you’re selling children’s clothes and you ask your audience you talk to your mom’s and you say hey, what are the age of your children? And they tell you that would you want to send them Communications and marketing content about clothing that is age appropriate for their children or would you want to send them emails or a promotional content about things that have nothing to do with the data you just collected? I think any marketer would pick the former, so that’s that’s segmentation in a nutshell. It’s basically finding ways to learn about your customers and subscribers and use that data to have more relevant conversations and to be more personal every time you reach out.
Steve: So here’s one of the points I kind of want to hammer home. So let’s say I have a promotion for something that might not necessarily be within that example that you use like the kids age group. What is the harm in sending that promotion anyway? Like the person won’t be interested. They won’t open the email whatnot. Who cares? What, Is there a, does it do any harm?
Alexandra: It does do harm and so that’s the that’s where we get into the great ease of of email marketing and kind of the deliverability side. I find typically when people hear the word email deliverability, they think of Spam folders, but they’re not really sure exactly what it means and how it can impact them. The real meat of it here is that ultimately if you think of Gmail and Hotmail and Yahoo, your recipients are their customers and it’s their job to ensure that individuals have clean inboxes and have an inbox that they’re able to sort through and and really work with and so Gmail and others look at engagement from a sender. So as a sender if you are sending out volumes of emails and getting really low open and engagement rates. That’s Gmail signal that you’re likely sending spam and that’s when you’ll slowly see your open rates drop even more because Gmail will start to put your emails in the spam folder.
Since that’s their reaction to seeing those low engagement rates. And so we have this saying here at Klaviyo that those that do nothing do harm for exactly that reason if you’re not sending relevant personalized emails and you’re seeing low open rates and low engagement rates because of that ultimately you’re going to see your open rates drop even more as you start to see that funnel effect into the spam folder. And so while you may be sending relevant communication to some and some are opening, those that aren’t are actually going to they’re going to ruin it for everyone else and you’re going to see yourself really struggle to dig out of that since it can be a lot more challenging to regain a positive sender reputation then to damage in the first place.
Steve: So does that imply then that if you keep sending and people don’t open that some real good customers of yours may not get your future emails?
Alexandra: Exactly exactly over time. The more the more you send these unengaged audiences the more likely you are to see all of your emails go to spam and so even those that do want to receive your content aren’t going to get it because it’s going to land in their spam folder too
Steve: So just curious what are some decent metrics for open rates to just kind of indicate that you’re in decent shape.
Alexandra: Sure. Yeah, we find that typically around 20 percent and above is what we call a good healthy open rate. If you’re in the 15 or so percent area we say, you know, look at how you’re trending go back and Klaviyo. We have ways to analyze this in any email tool you’re using you’ll Look at your Trends to your main lists, and if you’ve gone down to 15% from the healthy 20% area, it’s likely you’re trending potentially into that spam territory. So you want to do some list cleaning start to segment your engaged audience and only send to them or exclude unengaged audiences to start to boost those open rates. If you’re in the 15% range and you’re trending upwards and that’s a really good signal that you’re starting to be more personal and targeted. So so I’d say if you’re dropping below 15 and you’re especially if you’re in the 10 or below that’s where you may want to take some more proactive measures to get back on track.
Steve: So I hear a lot of people talk about segmenting your list, but I’m pretty sure it’s confusing to a lot of people. So what I was hoping to do to in today’s interview was to talk about some just very basic ways to segment your list that apply to pretty much any e-commerce company that is manageable with a very small team for example.
Alexandra: Yeah sure
Steve: So how would you do that. Like what is the best way to maximize repeat purchases and increase your open rates and engagement rates?
Alexandra: Yeah. So we find that ultimately if you think of the more robust models around recency frequency and value that you may sometimes hear when you think of segmentation the key thing to generally focus on is that recency factor so..
Steve: so can we Define those three terms first before we move on?
Alexandra: Yeah, of course and so we talk about when we talk about recency or talking about people that have Opened or clicked an email from you recently and have purchased from you recently. So those that have purchased from you most recently probably no surprise they’re engaged but they’re more likely to purchase from you again because they haven’t gone too long. They haven’t dropped off. So that’s recency. You can think of things that happened most recently.
Alexandra: When you get into frequency. That’s when you’re thinking about how often does something happened. And so how regularly does someone purchased from you how regularly do they open. The last category here is a value. When someone purchases, how large is that purchase? What is their total lifetime value? What’s the revenue potential or the revenue earn over all time? And so you’re typically trying to drive up all three of these you want to drive up recency. So you want to keep your audience engaged and active and real-time. You want to keep the frequency High you want to encourage repeat purchases on a regular Cadence and of course you want to drive up the customer lifetime value and try to not only increase the average order value for any given purchase. But of course drive up. Like I said that the lifetime value over time.
Steve: Okay, and so based on these three parameters is that like the foundation for your segmentation strategy?
Alexandra: Yes, exactly. So if you think of these different categories you can think that your core marketing audience. So that’s about 75% of your marketing is generally going to go towards those that fall into this recency category, the people that are most recent. Once you get into the laps and not frequent not recent. So we talked about those damaging unengaged folks that you don’t want to email that’s where they have neither of the three. They are not recent and they’re not frequent and their value has seriously tapered off. That’s where you get into the danger zone if you email them because it’s very likely you’re Landing in spam. If you start to creep back from that where maybe they are high value, but they just haven’t bought super recently. They’re medium laps.
That’s where you start to creep back towards the wind back category, which is people that used to purchase frequently or only very early very recently elapsed and have those different value categories. So you can think of the different buckets across these three different core principles as a foundation for segmentation.
Steve: Can we tell some numbers in there. What would you consider a lapsed email subscriber?
Alexandra: Typically if someone has an open an email in three to four months we consider them elapsed and that’s also a tip. That’s what Gmail also considers getting into the laps territory. If someone has an open in three to four months and you keep emailing them and they keep not opening. That’s when they’ll start to filter those emails to spam.
Steve: What if they made a purchase in that time. They’re just not opening their emails. Is that still count as a lapsed email subscriber?
Alexandra: So it depends a little bit about whether you’re focusing on deliverability and and hitting the inbox or if you’re focused on engaging repeat purchases. So the tricky thing is that Gmail doesn’t care whether or not someone’s buying from you. You can have a really great product and you could get a lot of purchases. But if your email games not strong and you’re not if you’re batching and Blasting everyone, you’re not going to see engagement on that side of things. So you do want to segment, you know, pun intended here you want you want to segment your strategy and you want to think about how you’re able to target folks that are engaged keep them engaged via email but also keep them buying and the strategies are slightly different for both.
Steve: All right, so you talked about a number of things here. So your core marketing audience. It sounds like it’s people who have opened an email within the last three or four months. Is this is correct? Just tell me correct me if I’m wrong, and then for win backs, it sounds like these people might not have they probably haven’t purchased in a while and they haven’t opened a while and you’re just trying to get them back and then there’s this set of people that haven’t done either that you just don’t want to email.
Alexandra: Yeah exactly. Exactly and it’s a bit of a sliding scale. So when you’re thinking about recency, you do want to think about recency of purchases as well as recency of email opening. So the more engaged your content is and the more strategic and targeted you are from the segmentation perspective. Hopefully folks are opening your emails. And so that’s kind of a constant. That’s a constant in terms of something you want to be tailoring and and playing around with it to keep your open rates high. In terms of recency of purchasing, that’s where you Get into segmentation around when backs and trying to understand your buyer cycle and ensure that you’re sending targeted Communications to encourage purchases reach out after someone hasn’t purchase when you thought that they should have and things like that.
Steve: So can we just throw some numbers again out there for win backs? Like what are some just general guidelines for parameters that you would said for a win back?
Steve: Yeah. So this is actually it’s a great question. We get asked it a lot. I would say there’s no magic number. I’m in the world of email and the world of marketing because it really depends on your product and your buyer cycle. So the first question I typically ask a brand or someone I’m talking with is if I bought your product today, when do you think I needed it again? And then we have a conversation about what a normal buying cycle would look like based on your product. So if it’s a replenishable product, you probably have serving sizes. You might be able to gasps. Hey, you know if someone buys X within 30 days, they’re going to need it again. And so if that’s the case, you know think about 15 days past that it’s a 30-day replenishment cycle think about 15 days or so about two weeks past that and that’s when you’re going to want to send a wooden back about a week before you’re going to want to send a reminder.
And so you can think about that date that replenishment cycle and a little bit before it. You might want to send a reminder or send some content maybe even a promotion but a week or two after it you want to follow up again with with some wind back type content if you don’t have a replenishment cycle, that’s that’s known or well understood. There’s a couple things you can do. You can think generally about the occasions with which someone would buy your product. Is it a yearly purchase? Is it something that they only buy as a gift during the holidays? Things like that and and think about your buyer cycle that way you can also use tools like Klaviyo to export and really Stand the time between orders I get a little bit more technical with it as well. But I would say there’s no generally guidelines.
We say 30 to 45 days, but a really really varies based on a brand and a market and a product so I wouldn’t take that at face value and I do some experimentation to figure it out.
Steve: Sure. So based on what you said, the wind backs are based on purchase, purchases and not necessarily opens, right? So you wouldn’t send out a win back if someone had purchased before but hadn’t opened an email within like 30 days or 35 days.
Alexandra: Yeah, exactly. That’s where the two are separate but need to be thought of in concert. So the wind back is definitely around purchases in terms of the more traditional marketing segmentation. That being said if you are trying to increase your deliverability and you’re trying to increase engagement, you want to think strategically about every single email you sent. And so that’s why you don’t want to get beyond that three to four month range and keep sending someone win back. So right if you know with your even with your win back audience, you may want to segment those that further segment. Hey, I have my wind back audience people that haven’t bought in 45 days, but they really should have bought in about a month ago or 15 days ago. Let me further segment those that have opened an email since then, since their last purchase the people that have opened an email since their last purchase are going to be way more likely to open a win back email and likely buy versus someone that has not even opened a single email since they last bought and so you can segment those two groups and you can think hey what’s going to get the not opener to open?
Maybe it’s a ten percent off in the subject line. Maybe it’s you know, a really convincing promotion and paired preview tax. That’s going to catch someone’s eye right? For the for the win back folks that have never opened. You really got to focus on that inbox appeal and figure out how you’re going to get them to hopefully open the email first. Those that are win back audience and typically do open or have recently opened an email. You may not need to offer something in the subject line. Maybe you will use the same subject line, maybe not but when you get to the content, here’s this group, right? Here’s this group that bought from you and then has engaged they’ve been opening but they haven’t bought what in your content is going to get them to pull the trigger. So this is where segmentation is really about tapping into the motivations of the people you’re trying to target.
And teasing them apart based on what you know about your business and what you can assume about your audience based on that. So I’d say generally win back time frame you want to think about the last purchase but then you want to further segment based on email and open engagement to help you tailor the communication even further.
Steve: Right. Whether you want to give some sort of promotion or whether you think they’re going to buy anyways
Steve: This interview is only 50 minutes long. So and when backs are just kind of like a small portion of Revenue, So let’s try to focus on just like the core people that you’re going to be emailing very often. How would you segment those folks and I guess these are just people that are classified as people have opened within the last four months.
Alexandra: Yeah, so if you have your you’re engaged audience people that have opened in the last four months and you’re sending it regularly to them or you want to start sending more regularly to them. This is where there’s a couple things you can do to learn more about them and segment further. First, is they’re buying history. So we talked a little bit about that high value versus low value a really great way to start to build customer loyalty and segment further based on the data you already of your purchase data from your eCommerce platform if your Ecommerce is to separate out a VIP group. So set a figure out your average order value go up about you know, 15 20 dollars or think of what Revenue tear you would consider to be a VIP group. It could be the number of purchases. So maybe you don’t want to set a dollar sign value, but you’d rather look at everyone that’s bought three to four times start to segment out your VIPs.
This is a really awesome group that instead of sending your regular emails to start to use the word exclusive or just for you or you know, a thank you to our loyal customers. So segmentation can just take the form of treating people a little bit differently when you know a bit more about them. So a VIP audience really great way to start segmenting and build loyalty with a group of people that you are going to drive the bulk of your lifetime value from.
Steve: Can you give me some an example so your segmenting out these high rollers and Language like exclusive but given that these are the high rollers. Do you need to be sending them offers and that sort of thing or you just kind of sending them products at this point?
Alexandra: It can be either or and so sometimes maybe you want to have a single promotional event a year. That only goes towards your VIPs. You can do something like that. But if you aren’t necessarily interested in discounting and there’s other approaches such as you know free gifts on birthdays, there’s different ways. You can set a VIP the program apart, but it can also just be about access so early access to a new product a product launch. So anyway, you can create exclusivity that tends to drive engagement and so aspect for your VIPs. You want to keep them feeling special and again, it doesn’t necessarily have to be a high bar to be a VIP. You can start to build these loyalty audiences and tears. But ultimately these are going to be your promoters your Advocates and so Keeping them feeling special whether or not it’s around any discounts or just the content in the Early Access can really help.
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So I guess high rollers. That sounds pretty straightforward. Right? These are the guys who buy from you often. They open all your emails and their lifetime value is very high. I guess it gets a little bit more gray with some Other folks right? So can we talk a little bit about the less obvious segments?
Alexandra: Yeah, and I think that there’s the different segments you can create around those frequency, value, recency but there’s also things you can learn about what people click on what they browse. Do you want to talk about the segments around those three core principles or more about how you can learn about your audience from what they look at what they click?
Steve: Let’s finish like all the three main principles first. And maybe after that we can talk about some of the other segments that you want to talk about. But at some point like everyone’s going to be getting a whole bunch of the, whole bunch of emails, right that kind of cross these segments. Well, let’s finish three principles first. So what are the other segments that you want to have based on recency, frequency and lifetime value?
Alexandra: Yeah, so you got your high rollers. These are the people that you want to give perks to you want to help them advocate. So again follow us on social media. There’s lots of ways you can leverage your high rollers to help them be better Advocates and keep them kind of right there along with you as your as you keep marketing and as your brand grows and then you start to separate out the people that are either frequently purchasing, but it’s at a lower value and so again this maybe lumped in with your high rollers. If you’re not looking necessarily at Value, but more how often someone buys that three or four time purchases, but you can imagine if somebody is purchasing frequently, but not at a high value. You want to drive up their average order value. And so there are a couple different ways. You can try to drive up your average order value.
There’s lots of apps you can use at checkout to suggest, but ultimately related and recommended products is by far one of the best ways to increase order size and if someone gets used to always purchasing a couple items together or in bulk, they’re going to keep doing that. So if you look at your high rollers and you look at what the makeup of their orders are and why they’re purchasing more think about what can drive your brand enthusiasts. So people that are purchasing from you but not in high value. How can you encourage them to look more like your high rollers? How can you start to bundle things? Encouraged volume discounts constantly recommend related or complementary products to try to boost that average order value. That’s another segment. You can Target to ultimately have people that love you they buy a lot but start to drive up the value that you get from them.
Steve: It sounds like you need to further segment down your brand enthusiasts as well. Right? Based on what they bought so you can show them complementary products.
Alexandra: Exactly. Yeah, and that’s where we get into the more topical segmentation. So regardless Of how recently or frequently someone’s bought as well as the value. You want to you want to think about what they’re interested in and you can track what they look at on your website. You can track the type of email they engage with and what they purchased in the past what they’ve abandoned in their carts. So again, you always want to get down to the more granular level at some point so that you can recommend items complimentary items things like that exactly.
Steve: So for someone who doesn’t have a large team To do email marketing for them. It seems like you know, by the time you get down to segmenting based on recency, frequency and value in addition to individual products that you can cross sell and that sort of thing. It sounds like there’s going to be a lot of segments is that it almost becomes exponential.
Alexandra: It can and so there’s a couple things that I typically recommend starting with.
Alexandra: First is kind of thinking about your business goals. There’s a lot of different segments and you really do want to start to segment your audience. But you want to think a little bit about what you’re struggling with and what you could and what your goals are in terms of a boost. And so if you don’t have any high rollers, and that’s a really small group. You can bundle them right? You can bundle the high rollers with a brand Enthusiast and don’t necessarily look at Value, but think of people that have bought for me recently and buy frequently and treat them special together when you go down a tier. And people that have bought from you recently you can again just segment them out and try to increase their frequency. So focus on replenishment for people that have bought recently but not frequently and then when you get down to the lowest tier people that bought recently or semi recently and the frequency is or isn’t there again, you can kind of start to bundle those and really try more promotional content.
So I would say, you know start with just one group or one level and the nice thing is that once you create these spaces segments, you can use them for absolutely everything. So there might be a little bit of an upfront investment our customers, typically, when we chat with them. They say hey two hours a month is all we actually really need in order to tune these segments build a couple more and use that for the rest of the month for our strategy. So if you’re thinking the sounds like a lot of time, can you give two hours out of the whole month towards this and if the answer is yes, then there’s a way for you to start and see value from this type of model.
Steve: Okay before we go into more depth on that, let’s just quickly Define the other segments based on three. So there’s three parameters which means there’s eight segments. Right? So we covered the high rollers. We cover the brand enthusiasts which are essentially high rollers with a lower order value. And then I guess moving on down the tier. There are also people who are recent but they don’t purchase very often and then there’s high and low values for those. For those people who don’t purchase that frequently. What are some prootions that you might send them to get them to buy again. Are we sending them coupons at this point. What are we sending them?
Alexandra: Yeah, so I was on them two things. I would send them best-selling related products as well as limited time urgency deals. So the key here is that if someone is not buying recently or too frequently you really need to drive them to see value. And so that’s where you have to get more personal but you want to put your best foot forward with them. So best-selling items related products from what they might have already bought and then create some type of urgency with either a discount or free gift something along those lines a bundle offer to really push them over the Finish Line.
Steve: It sounds like a related product cross-sells kind of Encompass all of these, is that accurate?
Alexandra: Yeah, it really is and this is where the content itself is a little bit more ubiquitous. So cross sells generally this you think about life cycle marketing are critically important in order to be able to introduce customers to a wider range of products and they might already have seen before and drive up the both average order value as well as the frequency which is why it really crosses over segments because you can imagine if someone only buys one product from you being able to cross sell will not only probably get them to buy again sooner than they might have already because now there’s a new item that they want, but then there’s two items which is more value, two items that could replenish and it really expands from there.
Steve: And then finally there’s this segment that might not even have bought from you at all. And you’re just trying to get them to make a purchase, right? So for these people would you suggest much larger discounts just to get them to kind of pull the trigger?
Alexandra: Yeah, when you’re in your we call them that nearly there’s or the waiting for Wows. These are people that have engaged with you. But they really need to be nudged over the Finish Line there and they’re clearly waiting for something. And so ideally you reflect a little bit on you know, what are they waiting for is it they don’t actually understand your product and they need education on it? Is it that they think it’s too expensive. So you need to really sell the value I would think about those different motivations when you think of the best content, but this is where social proof product reviews testimonials as well as some light discounting or some urgency deals can really be kind of the one-two punch.
Typically if people are hanging on and they haven’t purchased yet. They really need to be sold on the value that fear of missing out fomo the more that they see others enjoying the product and Trust building, you know, social proof and product reviews can also help nudge people over the finish line. So if you if you have that combination of content as well as a discount or promotion, you’re very likely to Target those more effectively and start to get them closer to purchasing and then finally got them to purchase in which point your then focusing on encouraging the frequency and the value.
Steve: How often are we emailing these people? Or what would you recommend or what have you seen?
Alexandra: Yeah, I would recommend for those kind of nearly there’s you certainly do not want to over email and so it, you want to go back to that recency factor. And so how recently did they last purchase if they have or how recently did they last open an email, if you have someone opening emails. I say, typically two emails per week is a really safe spot. So you can start to measure engagement. If you’re seeing good engagement from the two emails per week. You can ramp up potentially the three if you’re really being targeted, if you’re not seeing open rates, then I would drop back to maybe one and have it be a more impactful discount something like that. You really want to, the two things I don’t recommend. Don’t email multiple times per day. If you’re really trying to nudge people over to be mindful of your deliverability, but you can start sending multiple times per week. If your open rates are safely over 15%.
Steve: over 15% Okay, and I would imagine like the high rollers in the brand enthusiasts. You can probably email, you can probably get away with emailing them more often
Alexandra: Exactly. And that’s where four people that again. I would segment them based on openers or not openers just because people are purchasing from you at a high value doesn’t mean you’re there in love with your email strategy. So look closely at your open and click rates. But yes for folks that are opening their engaged you definitely have more latitude with emailing them more frequently, but really quality is always better than quantity when it comes to email. We have a great case study with Taylor Stitch and a couple other brands that really started to drop back the number of emails that they sent and focused on segmentation and quality and they’re now full Believers and the less is more approach and so you find that when you Segment you will ultimately end up sending less emails, but you will make more money from them.
Steve: So let’s talk a little bit about implementation now, so number one can all of this be automated and two, you mentioned two hours per month what exactly encompasses that two hours to get everything set up?
Alexandra: So for that two hour setup, I would focus on creating to base segments to start one is you’re engaged segment. So that’s everyone that has open an email and is opted-in opened an email in the last three to four months just so you have it. That type of Engagement Audience is great for your big promotions for Black Friday Cyber Monday sending for holidays. And that’s one segment that you can safely send to its you’re engaged audience. And then you similarly want to create your unengaged audience. And these are folks that have not opened an email and three to four months and you typically want to add a little bit more to that you want to look at people that have opted in or they joined your list over 30 days ago ideally since its if they’re very New they might not have had a chance to open yet. Based on how often you send. You also want to look at in terms of your unengaged make sure that they haven’t opened or clicked since open rates.
Sometimes people don’t have images loading open rates aren’t precise. You want to look at both of those but generally for most of your regular sending you want to exclude that group so that your as you focus on all of these nearly. There’s you’re waiting for Wow’s you’re not harming your deliverability in the process. So those are two starting points from there I would again pick out your high rollers and your brand enthusiasts feel free to Clump them together. If you don’t want to create that distinction based on value, but the two hours is spent just building some of these foundational segments because you’re going to use them for every single campaign that you’re thinking about you want to think about your goals your strategies for every campaign and then you want to consider. Can I Target my content differently for these different segments? So again the two hours you spent building some of these foundations and from there, they are automated because the segment’s will update in real-time hopefully. If you’re using a tool that provides that automated segmentation like pages
Steve: The one that rhymes with ABO?
Alexandra: That rhymes with ABO, there are others out there. But Klaviyo definitely provides this automated strategy approach things update real time. They’re there waiting for you every time you’re about to send you can consider. Hey, what should my high-rollers receive here or for people that have never bought? What’s the best way to get them to buy with this campaign? So your content isn’t have to be dramatically different but and your subject lines are not to be dramatically different, but if you pause for just a moment and think about how you can better tailor your content towards folks that either love you a lot and I thought all the time, from people in the middle or for people that actually have never bought yet. Those are the types of pauses you can have before every campaign once you already have these bass line segments.
Steve: I just want to let you know that tickets for the 2020 Seller Summit are on sale over at sellersummit.com. Now what is seller Summit? It is the conference that I hold every year that is specifically targeting e-commerce entrepreneurs selling physical products online and unlike other events that focus on inspirational stories and high-level BS. Mine is a curriculum-based conference where you will leave with practical and actionable strategies specifically for an e-commerce business. And in fact, every speaker I invite is deep in the trenches of their e-commerce business entrepreneurs who are importing large quantities of physical goods and not some high-level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that the Seller Summit will be small and intimate every year we cut off ticket sales at just a couple hundred people. So tickets will sell out fast, and in fact, we sell out every single year many months in advance now if you’re an e-commerce entrepreneur making over 250K or 1 million dollars per year, we are also offering an exclusive mastermind experience with other top sellers. Now, the Seller Summit is going to be held in Fort Lauderdale, Florida. From May 6 to May 8. And right now, we are almost sold out of Mastermind tickets already and I will be raising the ticket price regularly starting the day after Cyber Monday for more information, go to sellerssummit.com. Once again, that’s SELLERSUMMIT.COM or just Google it, now back to the show.
All right. So let’s just kind of break down everything that you just said with an example and I’m going to start putting words in your mouth. Tell me if I’m saying anything wrong. So we talked about three parameters, but it sounds like if you have a small team and you just want to do like the bare minimum you just kind of Lop off the value that leaves just recency and frequency. So, in fact, you can just lump everything if you want in the simplest case to three groups your high rollers your people that don’t bias frequently and the people who haven’t bought yet and you’re just kind of close but they’re kind of engaged right? And within these three categories you want to put together sequences that cater to each group distinctly.
Alexandra: Yeah, that’s a great way of summarizing it chop off the value just look at recency and frequency all the way up to the people that have bought recently by all the time and at the bottom people that have never bought from you and start to consider those.
Steve: So in terms of automating this with autoresponder sequences, I can see, so would you want three separate sequences for each I would imagine and I’m just coming up with this right now on the fly. For the high rollers and the potential high rollers. I suspect that you would want to just put them on an autoresponder sequence did does cross sells primarily and maybe some content that kind of boost your brand?
Alexandra: Yeah. So yeah, the nice part about automation is that it tends to be targeted. Regardless of anything else because it’s Behavior triggered. And so when you’re thinking about segmentation you want to think about it in terms of the campaign’s that you send proactively but your auto responders are really what are going to be the undercurrent of what pushes everyone along and so you want to think they’re about every single interaction that a given subscriber customers going to have with your brand and instead of being more based off these segments. You want to think about the life cycle touch points and so on. When someone first subscribes you want to introduce them to your brand right? They’re, they have that recency in terms of that. They just did something they just subscribed or opted-in but they haven’t yet purchased and so you want to think about how to motivate them along you have your auto responders around abandoned carts, which again you want to Target you can absolutely start splitting out the paths are based on these segments.
If someone abandon a cart and they’ve never bought from you before what are you going to need to say or do to help get them to buy? Versus someone that abandons a cart that buys all the time from you, you know, maybe they just forgot their wallet. Maybe they are trying to cut back and they do kind of need a discount. Maybe it’s just around sending them a friendly reminder because they’re loyal customer. Right? So for all of the life cycle touch points and times people can engage with your brand definitely start thinking about these segments and how they can start splitting out these more personalized communication. Touch points so that you can automate a lot of this.
Steve: So it sounds like then that the initial breakdown of the segment’s primarily the way we’ve been talking has been for just individual broadcast. Right?
Steve: But even within that within the autoresponder sequences, you used abandoned car as an example someone who has abandoned but never have purchased before you might want to just give them a coupon code within your abandoned cart to get them to buy whereas for a high roller they’re probably gonna buy anyways, and maybe they just need a reminder.
Alexandra: Exactly. Exactly. And that’s the Part about these segments is that once you build them they really are for the more broadcast for the campaign sense. But these Concepts can absolutely be applied to your everyday automations for welcome series as well not everyone considers that someone can subscribe via pop-up or a footer form at any point. So you could have loyal customers that are just joining your list for the first time. And so maybe you don’t want to send them a discount towards their first purchase, right?
Alexandra: That might sound a little weird if someone is Actually bought before so it’s another great way and a great time to split out your audience’s. Something as simple as a welcome series abandoned cart again loyal customer don’t give them a coupon code just send them a reminder. All the way through towards browse abandonment win backs as well. And that’s where you can start to think for a win back. If somebody has only bought once from you before and you’re trying to encourage a second purchase versus if someone bought three or more times before and Trying to get that fourth purchase. How the content different there. So the segments can be applied to automations as well.
Steve: So my final question is if you’ve been broadcasting to your entire list for a very long time, what is the road to recovery look like?
Alexandra: Yeah. So it’s a great question that we typically recommend starting out by creating that engaged group or the unengaged group and exclude them. Let’s say you create your engaged group of people that have opened an email and have engaged with you in the last three to four months and just start sending to that segment. Don’t worry about any of the other high rollers the recency the frequency the value if you just been sending blast campaigns and your open rates have suffered to get back on track just start with an Engaged group focus on that recency of email engagement so that your open rates start to climb since ultimately your segmenting and you’re like great but you’re a recovering Blaster and your open rates are low. It can be tough to do both at once.
So I’d start out by just focusing on your engaged audience started to get your open rates up observe that you’re not actually going to lose money. I think that’s one of the first big eye openers for a lot of folks when they start segmenting they realize they’re sending less email to less people but they’re starting to make more and more money. So..
Steve: Is that, is that common?
Alexandra: It’s very very common. Yeah.
Alexandra: It’s very very common. It can take a little bit of time. I’ll send her reputation is something that can take a couple weeks to really build back and even beyond that so it can take some time to, when I say send a reputation, I mean it’s what the Gmail’s of the world think of you as a sender based on your engagement. And so if you have seen emails go to spam it can take you know, a bit of really good engage sending to build that back up. But once your open rates are starting to climb and you’re in the fifteen percent or above that’s where I would start to kind of split things out and go from there.
Steve: Okay, and so just kind of summarize what you just said, like for example your high rollers. You might want to just focus on those guys because it’s like guaranteed income so to speak so sending more often to them. Not only do you have high engagement rates, but you also are making a lot more money off those people. So how long would you recommend doing that before you start introducing the other groups back in?
Alexandra: I would stick with the engaged groups until it’s really about your open rates until you start getting closer to that 15% and Then I would start layering in some of the others but think a lot about how often you’re sending and play around with that if you start sending too often, and the number of emails sent is way way higher than the number of emails opened. That’s where you start to get into the danger zone. So I would say you can start to layer in these other segments rather quickly as long as you’re thinking a lot about how often you send and you’re keeping your open rates.
Alexandra: Yeah. The last thing I’ll say there is that one of the Best ways to really start to support and build a cushion around your deliverability is to get at least five autoresponders sending around those lifecycle touch points. The reason being is that we see almost you know 3x the number of Revenue per recipient for highly segmented emails, but when it comes to flows and autoresponders, its exponential the open rates that you get because they are so timely and Targeted. So if you’re going to start ramping up make sure you have a foundation of a welcome series and abandoned cart sequence, a win back browse abandonment, start to a thank-you post-purchase follow-up get. These autoresponders sending they tend to get really high 30 percent average open rates in and of itself and that can provide a really good cushion as you start to ramp up your campaign Sunday.
And they also help you maximize Revenue if you send a campaign, but then there’s no abandoned cart full on the other side. Help you really maximize that Revenue you’re not going to see the ROI there. So think of those start getting your autoresponders up and running as part of that initial investment as well.
Steve: Right. They kind of act like as the foundation for kind of
Steve: These groups even and then you can use the broadcast to, for the special offers to get them to buy.
Steve: Cool. Alexandra, I really appreciate your time. I know you have an appointment right now. Where can people find you, what’s coming up? What’s new in Klaviyo and yeah, where can people contact you if they have any other questions.
Alexandra: Yeah, so you can reach out to Klaviyo at any time. If you have questions, thoughts and you can email product@Klayiyo.com. If you have any ideas or questions for anyone on the product team here at Klaviyo. We also have a pretty cool conference coming up next month September 25th here in Boston. It’s Klaviyo Bos and it’s going to be amazing. We have tons of great speakers from across the industry. Lots of folks from Klaviyo talking about our product, but also just best practices and tips and things like this. So definitely come by, and if you have any questions about the conference, definitely reach out, and you can get in contact with me or anyone else on the product team at product@klaviyo
Steve: cool, and I will be at that event as well, and I hope to see you there too.
Alexandra: Sounds great.
Steve: Thanks a lot for coming on the show. Take care.
Alexandra: All right. Thanks.
Steve: Hope you enjoyed that episode. Now most email marketers simply blast their entire list, which is suboptimal from both a conversion and a deliverability standpoint. For more information about this episode. Go to mywifequitherjob.com/episode283.
And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use the term visitors into email subscribers. They offer email capture exit intent and site targeting tools to make it super simple as well. And I like Privy because it is so powerful and you can basically trigger custom pop-ups for any parameter that is closely tied your eCommerce store. Now, if you want to give it a try it is free so head on over to privy.com/steve. Once again, that’s P-R-I-V-Y.com/steve.
I also want to thank Kaviyo for sponsoring this episode, Kaviyo is my email marketing platform of choice for e-commerce Merchants. You can easily put together automated flows like an abandoned cart sequence a post purchase flow or win back campaign. Basically, all these sequences that will make you money on autopilot. So head on over to mywifequitherjob.com/klaviyo. Once again, That’s mywifequitherjob.com/klaviyo.
Now I talked about how I use these tools in my blog and if you’re interested in starting your own e-commerce store heading over to mywifequitherjob.com and sign up for my free six day mini-course just type in your email and I’ll send you the course right away. Thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com