Cost of Over-Segmentation in Email Marketing

We all know that in email marketing, segmentation is king 👑. The more personalized, the better, right? But let’s get real. In the real world, hyper-segmentation has a cost—time, resources (= money). So where’s the line? When does segmentation actually hurt more than help? Here’s how to find the right balance 👇 👉 Cost vs. Return Segmenting down to the tiniest audience may give you better engagement, but what’s the cost? If creating that one small, ultra-specific campaign eats up hours and brings in only marginal revenue, it’s probably not worth it (a lot depends on your list size). 👉 The 80/20 Rule 80% of your revenue likely comes from 20% of your audience. If hyper-segmentation takes you away from your key revenue-driving segments, it’s time to rethink. Focus on the segments that make a difference to your bottom line, not the niche ones. 👉 Threshold for Hyper-Segmentation A good rule of thumb: If a segment accounts for less than 10% of your audience or has a low conversion rate, sending a tailored campaign might not be worth it. Broader segments with slight personalization can often perform just as well, without the extra cost. 👉 Dynamic Content to the Rescue If you want to scale personalization without over-segmenting, use dynamic content. Tailor different sections within the same email based on audience behavior, instead of sending separate emails to a dozen tiny segments. 🎯 Again, I'm talking real life, practical situations, and the majority of brands (i.e. list size < 1M). Also, I'm NOT saying not to segment (hopefully this gets through). All I'm saying is that it's probably not worth creating hyper-tailored campaigns for 8 different segments when you could have sent 2 and got the same revenue — for *most* teams where resources are limited. #DTC #Ecommerce #emailmarketing

When I First Started Working with 8-Figure Brands, I found 90% had these 5 red flags in their email marketing strategies: 1. Over-segmentation killing revenue Most brands were slicing their list into tiny segments, drastically reducing impressions and potential sales. I've seen brands create 15+ different segments for campaigns based on minor differences. When we simplified to 3-4 core segments, their email revenue increased by 30% on average. 2. No zero party data collection Brands were guessing what their customers wanted instead of asking them directly. Their popups only collected email addresses with no context about customer needs. We implemented zero party data collection asking about preferences and primary concerns. This doubled welcome flow conversion from 9% to 18% for one skincare brand. 3. Focusing on vanity metrics Teams were obsessing over open rates, click rates, and attributed revenue percentage. They celebrated 40% open rates while ignoring that sign-up to conversion was only 7%. We shifted their focus to metrics that actually drive business growth. Now they track how many email subscribers become paying customers within 7 days. 4. Neglecting the first 72 hours Our data shows 90%+ of welcome flow purchases happen within 48 hours of signup. Yet brands were creating 10+ email welcome sequences spread over 30 days. We redesigned welcome flows to send 2-3 targeted emails in the first 72 hours. This simple change increased new paying customers by 7-9% across multiple brands. 5. Discounting to the wrong segments Brands were offering the same discounts to everyone - including customers who had already purchased multiple times. This was destroying margins and conditioning loyal customers to expect discounts. We implemented segment-specific offers, reserving deeper discounts for prospects only. By offering product education and exclusive early access to repeat customers instead of discounts, we increased profit per order by $9-15. The biggest lesson? Stop focusing on email as an isolated channel. Start thinking about how it fits into your overall retention strategy. Since 2019, we've generated $100M+ for our clients by fixing these exact issues. PS What email marketing red flags have you spotted in your business?

Over segmentation can starve your best campaigns. Let me explain. You’ve got 100,000 subscribers. Feels good. But by the time you filter for: • Only people who clicked in the last 30 days • AND bought in the last 90 • AND viewed Product X but didn’t buy.. Now you're emailing 1,432 people. You’re trying to be smart. But your best content? It never sees the light of day. Here’s a better move: 1. Look at your highest earning flows and campaigns (based on revenue per send) 2. Pull out the big idea, the thing that actually made it work 3. Repackage it for a bigger (yes, messier) audience 4. Track what matters: net revenue vs unsubscribes Turns out, a solid email sent to 30,000 semi-interested people can crush a genius one sent to 1,000 perfect people. Segmentation is powerful but only when it doesn’t kill your reach. Remember email marketing is a numbers game and you have to find the balance of size and message.

Here is how I turned around a 7-figure email program by simply counting how many emails we sent. Well, it wasn't that easy... but almost. The program had been declining for a few months, and the entire team was stumped. We were doing everything right. The design was impeccable, the landing pages were optimized, emails were meticulously segmented... But we missed a crucial point: segmenting is meant for personalization, NOT for sending fewer emails. The total email deliveries had dropped to almost half due to over-segmentation. Meaning we segmented out half our active subs. The worst part? The emails weren't even personalized to these hyper-segmented groups! The fix: we began broadening the segments and sending more emails, and like magic, email revenue surged to record levels. We were missing the forest for the trees. Since then, I've always kept a close eye on my count metrics alongside my efficiency metrics. After all, you can't generate email revenue if you're not sending emails.