Email marketing is a powerful tool for reaching existing and potential customers. In today's guest column, Paul Turnbull of Campaigner Email Marketing explains email segmentation, which lets online merchants send targeted campaigns to a subset of email subscribers. You could use segmentation to send incentives to those who haven't purchased from you before. Or, you could send free shipping coupons or advance notice of your next sale to only your most loyal customers. In the long term, Paul explains, email segmentation can help you create long-lasting, profitable relationships with customers.

The holidays are fast approaching and retail industry analysts are already predicting a good season for sales. Despite a sluggish year, the chief economist for the International Council of Shopping Centers estimates that sales will rise 3.5% for November and December combined.

Email marketing is a proven tool for attracting customers to your ecommerce site - outpacing the competition and driving sales while providing a practical, cost-effective and results-oriented way for increasing profits during the last big selling season of the year.

Email Marketing
An optimized email campaign is one that delivers a targeted relevant message to the right person at the right time. Generally, email campaigns are used for either informational purposes (such as a newsletter that describes upcoming events) or promotional purposes (such as coupons for discounts on purchases). Email campaigns may also be used to inspire users to engage with your brand. For example, you can share an online review from a customer about what you're selling to increase interest in a specific product or encourage a click-through to your website.

For the holiday season in particular, email campaigns let you get the word out about available merchandise and hot sales - without the added cost that direct mail and advertising can take out of profits. In addition, a good email marketing service will allow you to segment lists, enabling you to target your message by key demographics, including age range, buying patterns and location.

Email Segmentation
Segmenting email contacts vastly improves the ability to target your message, which helps improve the open-rate and click-throughs on links in your email. Over the long-term, it increases personalized rapport and long-lasting, profitable relationships with customers.

Segment criteria can be based on any combination of these types of filter groups:

• Generic contact fields (such as Last Name or Phone Number)
• Custom contact fields (such as a field that identifies if a contact has made a purchase in the last month.) Similarly, you can segment contacts by region based on the area code value of phone numbers.
• Email campaign activities (such as contacts who opened an email for an email campaign)
• Mailing lists or segments (such as contacts who belong to specified mailing lists or existing segments)
• Sign up form usage (such as contacts who subscribed using specified sign up forms)

In addition, data such as age range, buying patterns and geographical location can be used to segment your lists in your campaigns. Experience shows that shoppers with young kids tend to look for computerized toys and gadgets that make a lot of noise, while teens want clothes. Additionally, there are shoppers who only give gift certificates or are more likely to buy sporting goods or jewelry during the season.

No matter what you are offering, a good email marketing service can help you segment a list based on your customers' historic buying patterns, optimizing success sales factors such as the matching of email subject lines and product links to a customers' interests and preferences. If you don't have this data already, start gathering it this year so you can target better next year.

Another way to segment is by type of contact - including potential customers, leads (people who have not yet purchased your products or services) and existing customers. Filter contacts of those who haven't purchased from you before into a targeted list, then offer an incentive to this group for a first purchase. Filtering out existing customers reduces the chance of sending an email campaign to contacts who would receive no value from it.

Targeting Existing Customers
For existing customers, let history be your guide and segment customer lists based on typical order size. This approach to segmenting can help you create targeted emails for low spenders, average spenders, and high spenders. Use these sub-lists to personalize offers for each group with the right incentives to entice them to fill their carts a bit fuller this year. You can also sort your customer list by state or zip code to identify customers that are from out of the area. For example, you could use this tactic to target your emails for appropriate winter weather or get-away weekend travel packages.

Segmenting can also help you build relationships with your most loyal customers. Personalize campaigns to loyal customers in order to keep them up-to-date on your latest deals and offers. Recipients will appreciate special treatment that conveys how much you value their business. For example, you can include a loyalty promotion, like free shipping or advance notice of your next sale.

Seasons come and seasons go, so keep in mind these tips can work throughout the year. Using email marketing best practices such as these helps you become (and remain) visible to customers and prospects with highly targeted messages at a minimal cost that are designed to deliver measurable results.

About the Author
Paul Turnbull is the Product Marketing Manager for Campaigner Email Marketing and is responsible for product design and ensuring this solution meets the email marketing needs of SMB customers. He can be reached at paul.turnball@j2global.