The start of a new year means setting new business goals, creating new sales initiatives, and developing new email campaigns. If you’re still using the same email marketing tactics as last year, you could be missing out on a significant amount of sales.

While email is still a great way to reach customers and increase revenue, overall email performance continues to decline as spam-weary consumers stop engaging. According to a recent HubSpot report, average email click-through rates (CTR) dropped to 4.4% in Q2 of 2012 and well over half of new subscribers are simply not engaged.

You can’t depend on a one-size-fits-all email marketing plan. Your business needs to constantly evolve and adjust how you handle your email campaigns order to be successful. In this post, I’ll discuss another common email marketing pitfall that may be holding you back: lack of segmentation.

Understanding What Email Segmentation Is (and Is Not)

If you’ve done any email marketing for a fair amount of time, you’ve probably heard of email segmentation. Grouping recipients by specific demographics or other characteristics can offer a substantial boost to both deliverability and engagement if your messaging is on-target for each group.

However, many SMBs don’t perform email segmentation, or if they do it is not part of an overall email marketing strategy. This diminishes the returns seen, and may well cause companies to give up on their email campaigns before they’ve really started.

Email segmentation is both a tool and a tactic, and like any other tool it has to be used appropriately. Like any other tactic, it has to be used in appropriate context.

Email segmentation is not:

  • An instant cure-all for low engagement
  • A one-and-done endeavor
  • Set in stone

That being said, when email segmentation is used appropriately there can be significant increases in both engagement and sales.

Email Segmentation: A Practical Example

Let’s use a fictional online clothing store as an example. Styles by Candace sells men’s, women’s and children’s clothing at a range of price points. The company has an email list of 20,000 subscribers that have either bought clothing in the past or signed up for information on sales and special events.

The company currently sends emails twice a month, and would like to increase revenue through their email channel, but aren’t clear how to proceed. There are several ways to implement email segmentation to improve sales. They might segment their email messaging by:

  • Purchasers vs. Non-purchasers
  • Subscriber location (geography)
  • Subscribers who have never/rarely clicked vs. those that have
  • Among purchasers:
    • Types of clothing purchased
    • Amount of average purchase
    • Length of email subscription

This is far from an exhaustive list of the different types of segmentation possible, and knowing where to start is often daunting.  Here are a few tips that provide a way to narrow down the choices to one or two that make sense to start:

  1. Start with current customers first. People who have made a purchase in the past are more likely to make another purchase if their experience was positive. Find out what motivates this segment through testing various offers, and use the info to increase engagement and sales overall.
  2. Segment by customer preference. In our example, some customers may purchase primarily women’s clothing, or men’s, or children’s. Targeted emails focusing on the types of clothing subscribers are most likely to buy can see greater returns.
  3. Incentivize inactive subscribers. If you have significant numbers of subscribers who open your emails but do not click, it’s time to mix up the messaging and give those subscribers a reason to take action, now.

Subject lines are only the tip of the iceberg when it comes to segmentation – you can (and should) test messaging, offers, images and other areas of your email campaigns as appropriate.

A Final Word: For Maximum Email Marketing Success, Let the Data Dictate

Understanding email marketing best practices is a good way to get a solid foundation of where to start, but that shouldn’t be the end of your optimization efforts.

The only way to get the best result from your email marketing is to test and refine your campaigns based on your own data. What works for one company may not work for yours. You may get stellar results from a particular tactic that has resulted in only mediocre returns for other companies and vice versa.

Make a commitment to testing your email campaigns in 2013 and be sure to include segmentation as a part of the mix.

Share your thoughts: Ask your questions on email segmentation in the comments section below and get answers to help you maximize your email marketing ROI.