Creating and budgeting an effective dtc marketing plan wine entreneurship v2
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Transcript of Creating and budgeting an effective dtc marketing plan wine entreneurship v2
1Wine Entrepreneurship – Spring 2016
Presented by: Ron Scharman
Creating and Budgeting an Effective DTC Digital Marketing Plan
March 24th, 2016Wine Entrepreneurship – Class #4
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• Currently Chief Operating Officer of Chatterbox Wine Marketing Services and VinoVisit.com
• Instructor, SSU Wine Business Institute – 3 Years• Previously 7 years as President of eWinery Solutions• Previously 2 years as COO of New Vine Logistics• Previously 4 years as CEO of Morrell Wine Group• 15 years as a specialty retailer• MBA Cornell University Johnson School of Management• Lover of all things food & wine• Passionate about direct to consumer wine marketing• More info on LinkedIn at http://linkd.in/1yfhRm5
Who am I and Why am I here?
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TIME TO LEARN ABOUT YOU
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Where are We Going Today?• Overview of Technology Landscape• Model of Customer Progression - DEAL• Review of Customer Acquisition Channels• Digital Marketing Planning Checklist/Components of a Digital Marketing
Plan• Pricing Theory in Practice• Budgeting and Risk/Reward Checklist• Digital Campaign Metrics• Cost/Benefit Analysis of Email Acquisition
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Got Wine?
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QUESTION FOR THE SESSION:
How do we sell a 3-dimensional story in a 2-dimensional world?
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THE TRUTH IS, ITS HARD. VERY HARD….
AND IT TAKES A
GOOD TO GREAT MARKETING PLAN
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Tell your story + tell it well (the magic 15%)
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“ The notion of connecting a luxury wine brand with its wider digital and cultural ecosystem is now a matter of survival.”
Ron Scharman Wine Consumer Advocate
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The evolution from early 2000’s to present day, “personal computing” has changed 10 fold.
What’s changed? Bigger, More Complex Sites
2003
2015
2003 2003
2007
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Looked at Another Way
The faithful gather in 2005 near St. Peter's to witness Pope John Paul II's body being carried into the Basilica for public viewing.
St. Peter's Basilica at the Vatican, on March 13, 2013
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THINGS TO WATCH PERIOD
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MOBILE COMMERCE SOARS
Source: *IBM; **Adobe
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MORE PC’S GATHER DUST
*Source: U.S. Commerce Dept., Internet Retailer
44%
11%
45%
Percentage of time on retail web sites
SmartphoneTabletPC
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MY PHONE IS MY LIFENOT MOBILE-ONLY, BUT MOBILE-FIRST
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THINGS TO WATCH: MILLENNIALS
The crowd is here
Comfort level with mobile transactions
Ease of purchasing
Millennials
Growing FAST!
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People have transformed how they live, work, shop, and buy.
Businesses need to adapt…….
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It’s All About the Customer: Omni-Channel Marketing
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Omni-Channel Marketing
Transforming the customer
journey across all channels
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Remember That the Journey is Non-Linear
Find the customer where they want to be found…
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DTC Engagement: 360 Degree Customer View eCommerce
Wine Club
Allocations
Tasting Room
Recipe Engine
Social Media (Social
Commerce)
Mobile
Telesales (inbound & outbound)
SMS (Text)
Email Marketing
Visitor Reservations
Newsletter
Mobile POSSearch Engine Optimization
(SEO)
Retail Locator Winery
commerce ecosystem
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D-E-A-L Model of Customer Progression
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MODEL OF CUSTOMER PROGRESSION
DISCOVERY• Search engine• Word of mouth• Advertisement• Social Media
ENGAGEMENT
• Visits website• Visits tasting
room• Social Media• Mobile
ACQUISITION• Purchases wine
online• Buys wine in
tasting room• Joins wine club
LOYALTY/LOVE• Email
communication• Facebook shares• Special events• Ratings
D E A L
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Let’s Clear Something Up First…….
“Just as you cannot not communicate, you cannot not market
- Every time you answer the phone, it’s marketing. - Every time you send an email, it’s marketing. - Every word on your website is marketing. - If you build software, your error messages are marketing. - If you’re in the restaurant business, the after-dinner mint is marketing.” Rework by 37signals
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The Science of Discovery
DISCOVERY• Events/Restaurant/Retail
•Search engine•Word of mouth
•Advertisement• Social Media
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Wine, food, travel forums Existing customers Referrals from local
businesses Social media channels Friends and family Special events Wine publications and
blogs?
Search Engine Optimization Search Engine Marketing Ratings and Reviews
Getting Found
Building Advocates
Discovery: Socializing Bricks & Mortar
Source: www.tripadvisor.com, Ram’s Gate Winery
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The Art of Engagement
ENGAGEMENT• Visits website
•Visits tasting room•Calls winery
•Social Media•Mobile
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Every tasting room visitor is a potential customer
Collect email addresses Personally invite to Tasting Room Events and
Winemaker Dinners Welcome “Check ins” via FourSquare, Facebook Promote reviews of your business (Yelp,
TripAdvisor) and wines (Cellartracker) Communicate Club benefits and incentives Convey your winery’s story Don’t be afraid to ask for the sale
Engagement: Build Relationships
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Think “making a difference in people’s lives”!
Videos Blogs Recipes Special offers Invitations to special events Charitable causes Downloadable relevant content Gamification Sharable experiences
Online Engagement Tools
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The Results Speak for Themselves
ACQUISITION
• Signs up for Newsletter/Blog• Purchases wine online• Buys wine in tasting room• Joins wine club• Signs up for wine event• Purchases from catalog or
telephone driven by email
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Customer Acquisition Channels
• Wine club signup – Most traditional tasting room business model
• Digital and Social Marketing• Email Campaigns• Telesales • Direct Mail, Catalog
– Can still be effective; can drive ecommerce conversions• Social media, events, other
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Tell Me You Love Me
LOYALTY/LOVE• Email communication
• Join Wine Club
• Newsletter/Blog
• Facebook shares
• Special events
• Ratings
• Imagination
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Retention: The Heart of the Matter
AT THE CORE OF DIGITAL RETENTION:
USERS CAN LEAVE YOUR BRAND FOR SOMEONE ELSE.
ALWAYS REMIND CUSTOMERS WHY THEY FELL IN LOVE WITH YOU
IN THE FIRST PLACE
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Always Delight customers
• Wine club discounts• Wine club special
offerings• Club member events• Loyalty bonuses• Special access• The Unexpected
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Customer Acquisition Channels
• Wine club signup – Most traditional tasting room business model
• Digital and Social Marketing• Email Campaigns• Telesales • Direct Mail, Catalog
– Can still be effective; can drive ecommerce conversions• Social media, events, other
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MAYBE………
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How is Your Customer Experience At Your
Winery?
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How is Your Customer Experience When Finding
Your Winery Online?
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Where Do We Go From Here?
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Answer the Important 3 Questions:
1) Why do I exist? (My Brand)2) Why should you care? (The Consumer)3) How do I measure success? ($$, Visitors)
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THE DIGITAL MARKETING PLANNING CHECKLIST & THOUGHT PROCESS
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HOW TO KICKSTART
YOUR PLANNING
PROCESS
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NOW WHAT.
LET’S TALK ABOUT THE ACTUAL COMPONENTS OF A DIGITAL MARKETING PLAN
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WHAT MAKES UP A DIGITAL MARKETING PLAN
1. OBJECTIVE 2. STRATEGY 3. TACTICS 4. SCHEDULE
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WHAT MAKES UP A DIGITAL MARKETING PLAN (4 CORE THINGS)
1. OBJECTIVE
2. STRATEGY
3. TACTICS
4. SCHEDULE
(*Why*) The over-arching business problem you were tasked with solving
(*What*) Your approach, the layer between the business problem, and how exactly you did it.
(*How*) The means you took to satisfy your strategy, the actual details of how you executed
(*How Much*) Which partners, for how much, and how long.
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WHAT MAKES UP A DIGITAL MARKETING PLAN
1. OBJECTIVE
2. STRATEGY 3. TACTICS 4.
SCHEDULE
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WHAT MAKES UP A DIGITAL MARKETING PLAN
• Your objective should come from:• A company-wide KPI (drive new customers or more visitors)• Ownership/Senior marketing lead/DTC manager (CMO)• The closest senior member of your team
1. OBJECTIVE
(*Why*) The over-arching business problem you were tasked with solving
• Your objective should be:• Clear• Actionable• Map directly to a company-wide KPI
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WHAT MAKES UP A DIGITAL MARKETING PLAN
EXAMPLES OF OBJECTIVES:
1. OBJECTIVE
(*Why*) The over-arching business problem you were tasked with solving
Increase the number of website visitors and/or conversions Increase the # of email addresses we have in our databaseIncrease visitor traffic/wine club signups at the winery tasting room
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WHAT MAKES UP A DIGITAL MARKETING PLAN
• Your strategies should come from:• You.• Should always answer how you plan to take action before you know
anything about executing
2. STRATEGY
• Your strategies should be:• Clear• Actionable• Map directly to your objective (how are they solving your biz problem?)• The hardest part of a digital marketing plan.
(*What*) Your approach, the layer between the business problem, and how exactly you did it.
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LETS MARRY THEM TOGETHER
Target your demographic audience on the social networks they visit most with best selling wines, or other special offers. Encourage new site visitors to redeem an introductory offer in exchange for their email address. Similar approach in tasting room to acquire emails, phone #’s, etc.Drive traffic by promoting off-site tasting events and community-oriented events, focusing on Bay Area residents.
1. OBJECTIVE 2. STRATEGY
Increase the number of website visitors/conversions
Increase the # of email addresses we have in our database
Increase visitor traffic to the winery tasting room
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5. PRICING 6. COSTING7. PARTNER SELECTION
WHAT MAKES UP A DIGITAL MARKETING PLAN
1. OBJECTIVE
2. STRATEGY 3. TACTICS 4.
SCHEDULE
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PRICING THEORY
IN PRACTICE
WHAT MAKES UP A DIGITAL MARKETING PLAN
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BUDGETING FOR YOUR TACTICS ANSWERS 2 QUESTIONS:
If I had one dollar, where would I spend it.
If I had a 2nd dollar, where would I spend it.
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HOWEVER YOU ANSWERED THE LAST QUESTION:
AD DOLLARS GENERALLY ARE RESPONSIBLE FOR DOING 1 THING…
(BESIDES INCREASING AWARENESS OF YOUR BRAND)
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WHAT DOES $1 DO FOR THE DIGITAL MARKETER
TRAFFIC
WEBSITE TASTING ROOM APP 3-Tier PRINT/
WEB
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ONCE TRAFFIC IS IN THE DOOR IT CAN DO MANY THINGS (DIGITALLY-FOCUSED)
BOOK A TASTING
BUY WINE
JOIN A WINE CLUB
POST A REVIEWDOWNLOAD
RECIPES
RE-ENGAGEMENT
SHARESBROWSE - TIME ON
SITEVIDEO PLAYS
ENTRIES/VOTES
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5. PRICING 6. COSTING7. PARTNER SELECTION
WHAT MAKES UP A DIGITAL MARKETING PLAN
1. OBJECTIVE
2. STRATEGY 3. TACTICS 4.
SCHEDULE
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WHAT MAKES UP A DIGITAL MARKETING PLAN
HOW MUCH DO THINGS
COST?
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BACKGROUND ON HOW AD PRICING WORKS
CPM(cost per thousand)
CPC(cost per click)
Publisher charges you every time:
CPL(cost per lead)
MOST COMMON (EARLIEST FORM OF PRICING,LEAST RISKY FOR PUBLISHER)
INCREASINGLY COMMON(MORE RISK TAKEN ON BY PUBLISHER)
RAREST(MOST RISKY FOR PUBLISHER, GENERALLY WILL OWN THE SIGNUP EXPERIENCE)
Display/Websites/Mobile Apps
Paid SearchPaid Social
Lead Gen companies (Lead Genius)
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DIGITAL AD PRICING FORMULAS
CPMCOST PER THOUSAND(COST/IMPRESSIONS) *
1000
CPC
COST PER CLICKCOST/CLICK
Ad Buying Pricing Units (how all online ads are bought and sold)
PRO TIPS:CPM: Better for brand advertisers. CPC: best for Direct-response advertisers; most of you should be buying on a CPC. CPL: Best for B2B
CPL
COST PER LEADCOST/LEADS
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WHAT DOES THE AD PRICING MARKET LOOK LIKEInexpensive Average Expensive
CPM$1.25 $3.50 $5-$15+
CPC$0.25 $0.50-$0.75 $1.50+
CPL$25 $50 $100+
All these prices completely depend on your site, pricing,
and business
69Wine Entrepreneurship – Spring 2016
AVERAGE CPC GUIDELINES (ACTUAL MAY DIFFER)
Base Additions (each is an incremental cost)Avg. Untargeted
CPC Gender Age Interest Occupation Education Geo $0.35 +$0.25 +$0.25 +$0.30 +$0.25 +$0.15 +$0.45
But a fully loaded CPC would be $2.00
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AVERAGE CPC GUIDELINES + OBJECTIVES
Base Additions (each is an incremental cost)
Avg. Untargeted CPC Gender Age Interest Occupation Education Geo
$0.35 +$0.25 +$0.25 +$0.30 +$0.25 +$0.15 +$0.45
In other words, a fully loaded CPC would be $2.00
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5. PRICING 6. COSTING7. PARTNER SELECTION
WHAT MAKES UP A DIGITAL MARKETING PLAN
1. OBJECTIVE
2. STRATEGY 3. TACTICS 4.
SCHEDULE
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BUDGETING:
HOW MUCH SHOULD I SPEND ON ADVERTISING (AND OTHER MARKETING)?
WHAT MAKES UP A DIGITAL MARKETING PLAN
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KNOWING HOW MUCH YOU ARE WILLINGTO SPEND (AND WITH WHO)
HAS TO DO WITH YOUR RISK TOLERANCE.
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?: HOW RISKY ARE
WE?
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CHECK YOUR SPEEDOMETER:
AGGRESSIVE OR CONSERVATIVE DRIVER?
IDENTIFYING YOUR APPETITE FOR RISK
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AGGRESSIVE
WHEN AN AGGRESSIVE STRATEGY IS RIGHT FOR YOU
ROI
VOLUME
• You are looking to acquire as many new customers as possible in an effort to gain traction and grow wine brand awareness.
• Or you are have fewer metric constraints (spending our budget is more important than measuring it!)
• This strategy means being comfortable with a higher cost per acquisition in exchange.
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AGGRESSIVE OR CONSERVATIVE?
CONSERVATIVE
ROI
VOLUME
• Looking to maintain the best profit margin possible,
• You are much more metrics-driven, or potentially cash-strapped.
• This strategy comfortable with simply acquiring less new customers.
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Are you comfortable acquiring new users at a loss? (spend $10, make $5)
Are comfortable acquiring new users & breaking even? (spend $10, make $10)
If we break even or lose money now, can we monetize these users in 3, 6, 12 months?
How good were we this month at getting our existing customers to come back and spend time on our site?
How many new users do you want to acquire, and in what time frame? HINT: “As many as possible ASAP” is not good enough. Be specific.
YOUR CHECKLIST FOR RISK & COSTING
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5. PRICING 6. COSTING7. PARTNER SELECTION
WHAT MAKES UP A DIGITAL MARKETING PLAN
1. OBJECTIVE
2. STRATEGY 3. TACTICS 4.
SCHEDULE
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BEFORE COMPLETING A DIGITAL MARKETING PLAN YOU HAVE
TO PROJECT WHAT YOUR EFFORTS WILL DELIVER
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LET’S SAY YOU RUN A WINERY THAT HAS THE FOLLOWING CRITERIA:
EXAMPLE
WORLD’S GREATEST WINESPrice $100Goal ROI 200%Goal New Customers 200Average Conversion Rate
2.00%
Expected Cost Per Click
$1.00
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IF WE WANT 200 NEW CUSTOMERSAND OUR SITE HAS A 2.0% CONVERSION RATE…
HOW MUCH TRAFFIC DO WE NEED TO DRIVE?*
EXAMPLE
*Yes, we’re assuming this new traffic would convert at the same rate as our current traffic, which may or may not happen. This is modeling, though – it’s not perfect, but it’s useful for
our purposes here.
VISITS = NEW USERS/CONVERSION RATE
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WE NEED 10,000 VISITS FOR 200 NEW CUSTOMERS. SO HOW MUCH COULD 10K VISITS COST US?
>> TRAFFIC COST: 10,000 VISITS * $1.00/CLICK = $10,000 AD SPEND
EXAMPLE
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HOW MUCH WOULD I NEED TO SPEND TO HIT MY TARGET ROI OF 200%?
>> TRAFFIC COST: 10,000 VISITS * $1.00/CLICK = $10,000 AD SPEND
>> CONVERSION: 10,000 VISITS * 2.00% CR = 200 CUSTOMERS
>> REVENUE: 200 CUSTOMERS * $100 PRICE = $20,000 REVENUE
>> $20,000 REVENUE/$10,000 SPEND = 200% ROI
EXAMPLE
So under these circumstances, we could hit our ROI Goal & New Customer Goal with a $10,000 marketing budget.
Don’t have $10k? Adjust goals accordingly, this is important!
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IMPORTANT WORD ON SOCIAL
MARKETING
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WHAT ARE THE VEHICLES RELEVANT IN THE WINE INDUSTRY?
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If You Do Not Pay to Advertise on Facebook, It Is Estimated That You Only Reach 3-5% of
Your Fan Base2015 Forbes.com
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LAST BUT NOT LEAST,BEFORE DOING ANY ADVERTISING THINK:
HOW GOOD ARE WE DOING THINGS NOW BEFORE WE PAY FOR TRAFFIC?
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What is the Conversion Rate, Average Order Value, and Time Spent for:Our best traffic source Our worst traffic source (with the most visits) Our highest traffic source
Do we have appropriate landing pages to make our desired action as simple & easy as possible
Are we confident that paid traffic is going to help us do more of the desired action we want
Are we maximizing what we are getting out of our organic/free traffic (existing partnerships, search, etc.)
YOUR CHECKLIST FOR HOW GOOD WE ARE
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Customer Acquisition
• Wine club signup – Most traditional tasting room business model
• Digital and Social Marketing• Email Campaigns• Telesales • Direct Mail, Catalog
– Can still be effective; can drive ecommerce conversions• Social media, events, other
91BUS-800-101-16-SU
Wine eCommerce
Email Still Rules
EMAIL MARKETING ROI
According to Exact Target and HubSpot:
• Companies view email marketing as a better return on investment than PPC, content marketing, social media, offline direct marketing, affiliate marketing, online display advertising, and mobile marketing.
• Email Marketing has an ROI of 4,300% (Based on marginal cost).
• 66% of in-house marketers rate email as having “excellent” or “good” ROI
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How Money is Spent vs. ROI
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Suggested Reading
The Cost/Benefit Analysis of Building Your Email Subscriber List
Read my Blog at http://bit.ly/1K9dpZY
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Loyalty Coefficient
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Let’s Do the Math on Your Values
• Let’s say you sent 12 marketing emails in the past year to your subscriber list of an average 5,000 members during the year.
• That’s 60,000 emails sent, and you had an opening rate of 33%, or 20,000 emails opened.
• Your CTO calculated out to be 20% of 18,000 emails, or 4,000 unique clicks.
• You ended up with a 5% conversion rate, which resulted in 200 orders totaling $60,000, or an average order size of $300 (exclusive of shipping & tax).
• Your net revenue for the year equals $60,000/5,000 emails, or $12.00 per email subscriber.
• Assuming an average 3 year tenure for an email subscriber (LTV), net revenue jumps to $36.00.
• Discount LTV by weighted average of Loyalty Coefficient.
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Final Thoughts
Things to consider in your DTC marketing strategy:
• What makes you different or your story compelling?
• How do you deliver the message to visitors in person or digital?
• Why should they care?
• What is your plan for building and maintaining customer loyalty?
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Questions?
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Contact Info
Ron ScharmanChatterbox/[email protected] Me on LinkedIn at http://bit.ly/1WyFHpA