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


• 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?


TIME TO LEARN ABOUT YOU


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


Got Wine?


QUESTION FOR THE SESSION:

How do we sell a 3-dimensional story in a 2-dimensional world?


THE TRUTH IS, ITS HARD. VERY HARD….

AND IT TAKES A

GOOD TO GREAT MARKETING PLAN


Tell your story + tell it well (the magic 15%)


“ 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


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


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


THINGS TO WATCH PERIOD


MOBILE COMMERCE SOARS

Source: *IBM; **Adobe


MORE PC’S GATHER DUST

*Source: U.S. Commerce Dept., Internet Retailer

44%

11%

45%

Percentage of time on retail web sites

SmartphoneTabletPC


MY PHONE IS MY LIFENOT MOBILE-ONLY, BUT MOBILE-FIRST


THINGS TO WATCH: MILLENNIALS

The crowd is here

Comfort level with mobile transactions

Ease of purchasing

Millennials

Growing FAST!


People have transformed how they live, work, shop, and buy.

Businesses need to adapt…….


It’s All About the Customer: Omni-Channel Marketing


Omni-Channel Marketing

Transforming the customer

journey across all channels


Remember That the Journey is Non-Linear

Find the customer where they want to be found…


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


D-E-A-L Model of Customer Progression


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


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


The Science of Discovery

DISCOVERY• Events/Restaurant/Retail

•Search engine•Word of mouth

•Advertisement• Social Media


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

Ron Scharman

I would like to add:Socializing Bricks and Mortar - Customer Discovery


The Art of Engagement

ENGAGEMENT• Visits website

•Visits tasting room•Calls winery

•Social Media•Mobile


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


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


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


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


Tell Me You Love Me

LOYALTY/LOVE• Email communication

• Join Wine Club

• Newsletter/Blog

• Facebook shares

• Special events

• Ratings

• Imagination


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


Always Delight customers

• Wine club discounts• Wine club special

offerings• Club member events• Loyalty bonuses• Special access• The Unexpected


Customer Acquisition Channels










MAYBE………


How is Your Customer Experience At Your

Winery?



How is Your Customer Experience When Finding

Your Winery Online?



Where Do We Go From Here?


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)


THE DIGITAL MARKETING PLANNING CHECKLIST & THOUGHT PROCESS


HOW TO KICKSTART

YOUR PLANNING

PROCESS


NOW WHAT.

LET’S TALK ABOUT THE ACTUAL COMPONENTS OF A DIGITAL MARKETING PLAN


WHAT MAKES UP A DIGITAL MARKETING PLAN

1. OBJECTIVE 2. STRATEGY 3. TACTICS 4. SCHEDULE


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.



1. OBJECTIVE

2. STRATEGY 3. TACTICS 4.

SCHEDULE



• 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


• Your objective should be:• Clear• Actionable• Map directly to a company-wide KPI



EXAMPLES OF OBJECTIVES:

1. OBJECTIVE


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



• 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.


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


5. PRICING 6. COSTING7. PARTNER SELECTION


1. OBJECTIVE


SCHEDULE


PRICING THEORY

IN PRACTICE



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.


HOWEVER YOU ANSWERED THE LAST QUESTION:

AD DOLLARS GENERALLY ARE RESPONSIBLE FOR DOING 1 THING…

(BESIDES INCREASING AWARENESS OF YOUR BRAND)


WHAT DOES $1 DO FOR THE DIGITAL MARKETER

TRAFFIC

WEBSITE TASTING ROOM APP 3-Tier PRINT/

WEB


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




1. OBJECTIVE


SCHEDULE



HOW MUCH DO THINGS

COST?


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)


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


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


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


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




1. OBJECTIVE


SCHEDULE


BUDGETING:

HOW MUCH SHOULD I SPEND ON ADVERTISING (AND OTHER MARKETING)?



KNOWING HOW MUCH YOU ARE WILLINGTO SPEND (AND WITH WHO)

HAS TO DO WITH YOUR RISK TOLERANCE.


?: HOW RISKY ARE

WE?


CHECK YOUR SPEEDOMETER:

AGGRESSIVE OR CONSERVATIVE DRIVER?

IDENTIFYING YOUR APPETITE FOR RISK


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.


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.


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




1. OBJECTIVE


SCHEDULE


BEFORE COMPLETING A DIGITAL MARKETING PLAN YOU HAVE

TO PROJECT WHAT YOUR EFFORTS WILL DELIVER


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


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


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


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!


IMPORTANT WORD ON SOCIAL

MARKETING


WHAT ARE THE VEHICLES RELEVANT IN THE WINE INDUSTRY?


If You Do Not Pay to Advertise on Facebook, It Is Estimated That You Only Reach 3-5% of

Your Fan Base2015 Forbes.com


LAST BUT NOT LEAST,BEFORE DOING ANY ADVERTISING THINK:

HOW GOOD ARE WE DOING THINGS NOW BEFORE WE PAY FOR TRAFFIC?


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


Customer Acquisition




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


How Money is Spent vs. ROI


Suggested Reading

The Cost/Benefit Analysis of Building Your Email Subscriber List

Read my Blog at http://bit.ly/1K9dpZY


Loyalty Coefficient


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.


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?


Questions?


Contact Info

Ron ScharmanChatterbox/[email protected] Me on LinkedIn at http://bit.ly/1WyFHpA

mailto:[email protected]