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, 2016
Wine 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
20032003
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
Smartphone
Tablet
PC

MY PHONE IS MY LIFE
NOT 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 POS
Search 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

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

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
• Email Campaigns
• Telesales

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.

• 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

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 database
Increase 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. COSTING
7. PARTNER
SELECTION

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 REVIEW
DOWNLOAD RECIPES
RE-ENGAGEMENT
SHARES
BROWSE - TIME ON
SITE
VIDEO PLAYS
ENTRIES/VOTES

7. PARTNER
SELECTION

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 Search
Paid Social
Lead Gen
companies
(Lead Genius)

DIGITAL AD PRICING FORMULAS
CPM
COST PER THOUSAND
(COST/IMPRESSIONS) *
1000
CPC
COST PER CLICK
COST/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 LEAD
COST/LEADS

WHAT DOES THE AD PRICING MARKET LOOK LIKE
Inexpensive
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

7. PARTNER
SELECTION

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

KNOWING HOW MUCH YOU ARE WILLING
TO 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

7. PARTNER
SELECTION

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 WINES
Price $100
Goal ROI 200%
Goal New Customers 200
Average Conversion
Rate
2.00%
Expected Cost Per Click $1.00

IF WE WANT 200 NEW CUSTOMERS
AND 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 Base
2015 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
• Email Campaigns
• Telesales

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 Scharman
Chatterbox/VinoVisit
ron@chatterboxwinemarketing.com
707-556-2322
Find Me on LinkedIn at http://bit.ly/1WyFHpA

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