Seminar Group Presentation Creating and Budgeting an Effective Marketing Plan

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Presented by: Ron Scharman

Creating and Budgeting an Effective Marketing Plan

March 9th, 2016Direct to Consumer Wine SalesThe Seminar Group

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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• 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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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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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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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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1. OBJECTIVE

2. STRATEGY 3. TACTICS 4.

SCHEDULE

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• 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

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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

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• 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 media 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 addressDrive 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 databaseIncrease visitor traffic/wine club signups at the winery tasting room

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5. PRICING 6. COSTING7. PARTNER SELECTION


1. OBJECTIVE


SCHEDULE

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PRICING THEORY

IN PRACTICE


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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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1. OBJECTIVE


SCHEDULE

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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

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

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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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1. OBJECTIVE


SCHEDULE

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BUDGETING:

HOW MUCH SHOULD I SPEND ON ADVERTISING?


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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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1. OBJECTIVE


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 1,000Average Conversion Rate

2.00%

Expected Cost Per Click

$1.00

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IF WE WANT 1,000 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 50,000 VISITS FOR 1,000 NEW CUSTOMERS. SO HOW MUCH COULD 50K VISITS COST US?

>> TRAFFIC COST: 50,000 VISITS * $1.00/CLICK = $50,000 AD SPEND

EXAMPLE

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HOW MUCH WOULD I NEED TO SPEND TO HIT MY TARGET ROI OF 200%?

>> TRAFFIC COST: 50,000 VISITS * $1.00/CLICK = $50,000 AD SPEND

>> CONVERSION: 50,000 VISITS * 2.00% CR = 1,000 CUSTOMERS

>> REVENUE: 1,000 CUSTOMERS * $100 PRICE = $100,000 REVENUE

>> $100,000 REVENUE/$50,000 SPEND = 200% ROI

EXAMPLE

So under these circumstances, we could hit our ROI Goal & New Customer Goal, with a $50,000 marketing budget.

Don’t have $50k? Adjust goals accordingly, this is important!

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FINAL 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 BaseForbes.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

71BUS-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 MathSo let’s do the math:

• 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 30%, or 18,000 emails opened.

• Your CTO calculated out to be 20% of 18,000 emails, or 3,600 unique clicks.

• You ended up with a 5% conversion rate, which resulted in 180 orders totaling $54,000, or an average order size of $300 (exclusive of shipping & tax).

• Your net revenue for the year equals $54,000/5,000 emails, or $10.80 per email subscriber.

• Assuming an average 3 year tenure for an email subscriber (LTV), net revenue jumps to $32.40.

• 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

mailto:[email protected]

Seminar Group Presentation Creating and Budgeting an Effective Marketing Plan

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Transcript of Seminar Group Presentation Creating and Budgeting an Effective Marketing Plan