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May 27, 2009
Case Study

Boost Promotion Frequency Without Taxing Your List: 5 Steps to Lift Revenue 69%

SUMMARY: Email promotions are the bread and butter of many ecommerce sites. But how can you increase the frequency of your promotions without causing a backlash from your subscribers?

Read how a wine marketer increased a weekly email promotion to a daily promotion -- boosting its frequency 400% -- without upsetting their list. Revenue generated through email has since increased 69%, and is now over 50% of total revenue.
CHALLENGE
Glenn Edelman, VP Marketing, Wine Enthusiast, had a good thing going. As ecommerce manager of Wine Enthusiast’s wine accessory website and its direct-to-consumer wine retailing website, WineExpress.com, he saw the latter as a small, profitable and growing business.

One of the site’s strongest revenue drivers was its Wine of the Week email campaign. Every Tuesday, subscribers would receive an offer for a bottle of wine that would ship at a discounted rate of 99 cents per bottle. The program was successful, but it had some limitations.

“Sometimes we didn’t pick [wines that sold well] and it sort of hurt demand for that week,” Edelman says. “Or, worse yet, if a wine was ultra-successful and sold out -- some wines have sold out in a matter of hours -- we had no special promotion to give people for the rest of the week.”

Edelman and his team wanted to expand the profitable Wine of the Week promotion and free it from the weekly schedule -- without upsetting customers in the process.

CAMPAIGN

The team decided to turn Wine of the Week into Wine of the Day, sending a promotion every weekday. The change increased the number of emails for the promotion by 400% -- a risky proposition, Edelman admits.

Here are the five steps Edelman and his team took to ensure that the program would not overstress their internal resources, and would not frustrate their email list:

Step #1. Establish rules for the promotion

The Wine of the Day program was exactly the same as WineExpress.com’s Wine of the Week program with the following exceptions:
o Emails featured a new wine every day, Monday through Friday, at noon
o Each featured wine’s discount shipping offer lasted 24-hours

Previously, emails were sent every Tuesday at noon and featured a different wine that subscribers could purchase for one week at a discounted shipping rate of 99 cents per bottle.

“Free shipping is a tough proposition, margin-wise, so we just sort of brought it down to 99 cents per bottle,” Edelman says.

Other factors carried over from the weekly program:

- Simple and short emails

Since the emails’ frequency and volume was increasing, the team wanted to ensure that they were not too lengthy. Promotional emails featured:
o A banner highlighting the discount shipping offer
o One paragraph of text describing the wine and the price
o An image of the label
o A red “Buy now” button

- Video tastings on landing pages

The team created a tasting video for each weekly wine. The two- to three-minute clips featured an expert discussing, smelling, tasting, and suggesting parings for the wine. The videos were featured on each wine’s product page. They were so successful and well received, Edelman says, that they had to be carried over to the daily format.

“The videos have been a tremendous success,” he says. “I think for everyone who sells some type of consumable product, a food or beverage, video is the ultimate way to sell online if you can’t physically taste the product.”

Step #2. Check internal resources

Running a daily promotion required more work from Edelman’s team. Here is how the team addressed the issue with four key internal resources:

- Email managers

Edeleman’s team did not have an individual assigned to email, and did not have the resources to hire one. Quintupling the number of promotions meant the marketing team had to carry the extra load.

To streamline the process, the team made further use of templates. They also created each week’s entire email series the week prior to send, so all five promotions were ready to go.

“I didn’t want a situation where we were always scrambling for resources and the email might go out at four o’clock,” he says. “We did not want this coming out at random times of the day.”

- Online videos

The team’s wine expert agreed to create five times the number of videos.

- Wine inventory

The team confirmed with their wine director that the company could store and inventory up to five times the number of wines to ensure that each day of the week would have a new promotion.

- Financial sign-off

Wine Enthusiast’s chief financial officer needed to give the green light to increasing wine inventory. The team argued to the CFO and other executives that this was a smart investment by demonstrating the potential ROI for their efforts.

Step #3. Gauge subscriber interest in frequency boost

After making changes to prevent over-stressing their resources, the team considered whether their customers were interested in receiving Wine of the Day promotions. Here are some factors they considered, and how they found out that their customers were excited:

- Fits with consumable products

The team thought that WineExpress.com’s wine, a consumable good, was much more likely to have a daily interest to customers than the non-consumable wine accessories sold through Wine Enthusiast’s website. People may want to buy a few wines every week, but they’re unlikely to buy wine glasses or a wine cellar every week, says Edelman.

- Demand for information

People who enjoy wine often enjoy learning about new wines, Edelman says. The additional emails and the landing-page videos could also help fill demand for that information.

- Customer opinion

The ultimate arbiter of whether the team would go forward with Wine of the Day was their customers’ opinions. The team created an online, three-question survey that asked the following:
1. What do you think of our Wine of the Week program?
2. Would you be interested if we moved this program to a Wine of the Day with the same discount?
3. Overall, what is your opinion of WineExpress.com?

The survey was open for one month and was mentioned in four consecutive Wine of the Week emails. At first, Edelman thought that a good portion of the subscribers would balk at the idea, but he was presently surprised. A significant majority responded favorably.

“They didn’t mind getting one mail per day from us, as long as it was a new wine at a great offer that they could take advantage of.”

Step #4. Adjust overall email schedule

The team did not simply quintuple the Wine of the Week program and add it to their existing email schedule -- that would be too many mailings. Instead, they made a few changes to lessen the number of overall emails sent each week and to lighten the impact on the list.

Overall, the team moved from two or three mailings per week to six.

The previous schedule:
o Tuesday -- Wine of the Week
o Thursday or Friday -- A featured wine, no discount
o Sunday -- During the holiday seasons only, the team featured a product from its samplers product category

The new schedule:
o Monday through Friday -- Wine of the Day, updated daily
o Sunday -- Last chance to get Friday’s Wine of the Day with the same promotional price

Step #5. Launch daily email promotion

The team launched their first Wine of the Daily email in August 2008. The first week’s series included an introductory paragraph to explain why subscribers were receiving more emails.

Here’s the text:

“Introducing WineExpress.com’s Wine of the Day: Expanding upon the success of our Wine of the Week, WineExpress.com is excited to introduce our new daily email, Wine of the Day. Wine of the Day is your daily dispatch of delicious WineExpress.com wines that ship for just 99¢. But act fast because now the offer is valid for 24 hours only.”



RESULTS


“Demand went through the roof, with regards to revenue,” Edelman says.

- Significant revenue boost:
o 69% increase in overall email revenue, year over year
o Email now accounts for over 50% of WineExpress.com’s total revenue this year

The team made no other significant changes to its strategy that would account for the jump in revenue.

- No impact on list:

Surprisingly, the email’s open rates and conversion rates have remained flat (plus or minus 1%), Edelman says. Furthermore, clickthrough rates are up about 20%.

- Tiny bump in costs:

The team did not hire any additional people to run the campaign. And it already had an internal video studio built for Wine Enthusiast’s videos. Cost increases included:
o “Twice the work” for everyone involved, Edelman says
o Cost of storing more wine
o Cost of opening more bottles of wine for video tastings

- Sticking with one wine for one day worked best:

The team has tested other offers since the August launch, including a gift basket during the holidays, and later, a three wine sampler -- all with poor results, Edelman says. So far, the team has only made minor changes to the email’s copy and subject lines. The core of the Wine of the Day strategy remains intact.

Useful links related to this article:

Creative Samples from WineExpress.com’s Wine of the Day promotion: https://www.marketingsherpa.com/cs/WineExpress.coms/index.h
ml


How to Create an Online Video: A Step-by-Step Guide to Make It Easy on You (and Your Budget)
https://www.marketingsherpa.com/barrier.html?ident=3069


Wine Enthusiast
http://www.wineenthusiast.com/index.asp


WineExpress.com
http://www.wineexpress.com/


See Also:

Comments about this Case Study

Jun 02, 2009 - Williams Ford of WGF Enterprises, Inc. says:
This is a wonderfully insightful article and a testament that is pays to now your metrics! Williams G. Ford


Jun 02, 2009 - David Fischer of Grand European Tours says:
What I am wondering is what this did to non-promoted wines. While I think this is a brilliant idea, I'm wondering if it turned the website into sort of a "woot.com" for wine, where most of the sales are for the wine of the day.



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