Geerlings & Wade Raises Profits by Integrating Online and Offline Marketing and Sales Channels

CHALLENGE

In 1999, direct response wine seller, Geerlings & Wade's profits were in a tailspin. A potential corporate sale had just fell through in 2000 and the CEO resigned. New VP Marketing Eric Welter's goal was clear -- get back to profitability.

Welter's background is in direct mail (he started out at Fingerhut), so his first move was to examine every response metric and all the numerical data he could get his hands on.

CAMPAIGN

Welter felt very strongly that his best chance of success lay not in turning to the Web as a cure-all salvation, but in integrating offline and online marketing together. He says, "The Internet is not the end-all, be-all. It's not a crazy new product offering. It's just another channel for promotions and orders."

The Company had started sending its site members promotional, text- only, email messages since mid-1999. In order to maximize profits from these campaigns, Welter brought in a new email distribution vendor, e- Dialog. After cleaning the list to make sure addresses were correct, e-Dialog enabled Welter to upgrade these mailings to graphically appealing HTML versions (with AOL and text-versions for those who could not get the full HTML version.)

These new campaigns broke the typical email marketing mold in three ways:

1. Timing: Welter worked extensively with his print broker, Ballantine Litho-Sale Inc., to time emails around his direct mail campaigns. He says, "We've been a direct mail company for 15 years, so we already knew the optimal time to send postal mail. It's the timing of the email around and in coordination with the mail schedule that makes a difference. You'll have a piece of mail in your postal mail box, then the next morning you'll get a similar promotion in your email reminding you that you're two clicks away from placing an order."

2. Creative: Classically successful email marketing generally features very short copywriting -- the goal is to get them to click now. Again, Welter's direct response background pointed him in a different direction.

He explains, "We're not a dot-com trying to sell a product for $5 less than our neighbor. We are a personal wine service. If you keep it short, keep it quick; you're training them to be responsive to the offer rather than the service. We use a customer-centric model vs. an offer-centric model."

So, Geerlings & Wade's email creative takes its time, featuring complete details about the wine it describes and the region it comes from. In fact, there's so much information that you can make a buying decision based on the email alone.

3. Multiple Response Channels: Rather than forcing a click through, emails offer a variety of buying channels. Recipients can call in their order, click to the site and buy, or, easiest of all, simply hit "reply" and dash off a quick, casual email note about how many bottles you'd like.

Geerlings & Wade and e-Dialog’s software will decipher notes such as "Send me a case" or "I was looking at the catalog and I'd also like these three other things" and fulfill the appropriate product generally within 24-48 hours with extremely limited human interaction!

In addition to using email campaigns, Welter also drove customers to the Web site by adding the URL to all mailed campaigns and catalogs. Here again, Geerling & Wade takes integration a step further. If a direct mail campaign has just dropped, site visitors will see pictures of the mailers or products from those mailers at the top of the home page, with copy reading, "If you received one of these mailers, please click to receive...."

Plus the site's home page features a "Request a Catalog" offer. Welter says, "Our average customers are 53-54 years old. They often like to read at their homes on their time rather than going to the site on their PC to read."

Last but not least, Geerling & Wade's integration extends to its back- end database that collects key pieces of data to optimize (and ultimately personalize) future campaigns across all channels. Welter feels this online/offline marketing data integration is critical to his company's future, "We integrated from day one, rather than people trying to pass orders to the back end. All the data resides in one system. One key source on the back end knows who's doing what, when, where and how often."



RESULTS

During 2000, Geerlings & Wade's online sales tripled as a percent of sales from 5% to 15% of total sales. According to Welter, "That has only gone up every quarter. We're still continuing to grow."

He is quick to add, "It's not because we've gotten a million new customers, but because we've been able to take current customers online. We save money with email." Welter estimates his savings from cutting unprofitable direct mail segments, reducing telesales staff and streamlining order entry have decrease the marketing costs and the cost per order by approximately 10%.

NEXT: Geerlings & Wade has selected Verbind’s Lifetime product as their new marketing communication system. The Lifetime product will allow them to personalize, both messaging and product preference, across all customer touch points (both offline and online) creating a true customer-centric business model. We'll follow-up in the Fall to hear how it's working out for them.

NOTES: Are you a merchant with an older, affluent, mainly male customer base? Welter is interested in creating marketing partnerships with a hand-picked group of people. If you think your demographics and brand- value are similar to Geerlings & Wade, feel free to contact him at ewelter@geerwade.com with some basic information on your customer profile.

Ballantine Litho-Sales Inc.: (973) 350-1500