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Sara Redahan
March 1, 2018 | Sara Redahan

Beyond Email Address Collection – Why Using Data is Your Best ROI

From keynote addresses on wine and cannabis, artificial intelligence and state legislation - to workshops on customer service, social media, and wine club optimization - the 2018 Direct to Consumer Wine Symposium brought together individuals from all walks of the wine industry. Every session was filled with individuals looking to industry leaders to share their knowledge on how to maximize DTC efforts. Common questions attendees asked were, “How do I improve my club retention rates?” or “What kind of offers will help my email conversions without devaluing my product?” or “How can I get a customer to purchase again?” I noticed that many of the presenters would turn the questions back onto the attendee, and ask, “What does your data tell you?” and often, the person could not answer them.

One of the interesting side-effects of the increasingly digital world is the emphasis on quantification of engagement and connection to a brand as a gateway to brand loyalty. The “Wantedness” report by Wunderman[i] indicated that 56% of consumers feel more loyalty to brands that show a deep understanding of their priorities and preferences and that 88% of consumers want to engage with brands that set new standards, primarily through a higher level of customer service.

What does this mean to you? Basically, consumers want to feel wanted by the brand, and the more personalized the experience with a high level of service, the more likely the consumer is to stay with that brand. Experience and connection are key. So how do you maintain the level of connection and engagement with your consumers that they have come to expect? With DATA!

People tend to think of data as being impersonal - a set of numbers and statistics. But data is one of your most intimate connections to your customer base's needs. Every touchpoint, every engagement, every transaction, can provide invaluable insight into how and when your customers engage with you AND how and when you need to engage with them. Data is quantified behavior, and as such, can be used to predict and influence future behaviors. Collecting email addresses is a great start, however, it is just that: a start.

Imagine a scenario where you are generating an email campaign to promote a new release. Do you blast this release to your entire database or do you engage in thoughtful segmentation? Do you tailor the email based on how the recipient has interacted with you in the past? For example, if you have a group of consumers who have only been to the tasting room, does it make more sense to email them with a shipping offer, or with a tasting room experience that highlights your new release? Understanding your database and how to access the needed metrics will enhance all future marketing efforts and returns.

We work with many clients simultaneously and witness daily how much time and money companies are willing to spend on website and email design, beautiful photography, and social media ads. Yet the same companies invest very little toward database hygiene, segmentation models, or analyzing database trends. Don’t get me wrong – clean design, engaging photography and compelling ads are incredibly important aspects of marketing and can greatly impact conversion rates. However, they are relatively useless if the campaigns are targeted to the wrong segments of your database. Would you expect the same level of conversion on your new release of a red wine when targeting red wine lovers vs. white wine lovers? Probably not. An old rule of thumb in direct marketing is a campaign's success is relying 50% on targeting, 30% on the offer and 20% on the creative.

Not sure where to start?  Here are some quick things you can do today to move toward better data driven marketing:

  1. Set up Google Analytics. If you haven't already, set up a report to be emailed to you every month with your website stats. Already look at your website stats? Then include social media traffic and emails and add in funnels to see conversion rates. Not sure how to do any of this? Hire someone who can set this up for you and provide you with a monthly dashboard.
  2. Look at your email stats 7-10 days after you send an email. Look for open, click and conversion rates and compare them to other campaigns to see how your database reacts. Already doing this? Then drill down deeper and see what links they're clicking, and how quickly they respond to give you better direction on what they're interested in and what days or time of day they respond best.
  3. Clean your data base periodically. Carve out an hour each month to dedupe members. Carve out two hours each quarter to remove all bounces and unsubscribes into a separate group so they don't skew your metrics. Carve out a project every year to consider a data append to capture some of those lost or changed email addresses. Like any other machine, your direct marketing machine needs periodic tune ups.

Studies sited in the Harvard Business Review[ii] indicate that acquiring a new customer is 5-25% more expensive than retaining an existing customer. That means increasing customer retention rates by just 5% can increase profits 25-95%. Thus, keeping your current customer base active and engaged will most likely provide a greater return on investment than constantly trying to gain new customers. When you consider the impact of churn rate (or customer attrition rate) on profits, it makes sense to invest the time and resources into data-driven decision making and marketing strategies. Love your data and it will love you in return.

[i] The Wantedness Playbook, Wunderman.

[ii] The Value of Keeping the Right Customers, Amy Gallo. (Harvard Business Review, October 2014.)


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