Cultivating Lists Juices Sales for Wine Enthusiast
Revenue per catalog for the spring books rose 35 percent from the same period in 2001, exceeding expectations. The average of four units per order is up slightly from a year ago, and the $400 average order amount is a 35 percent increase.
"We weren't segmenting last year as we did this year," said Adam Strum, chairman/CEO of Wine Enthusiast Cos., Elmsford, NY. "Without additional circulation our sales and profits are up this year. A 15 [percent] to 20 percent increase would have been nice, particularly in light of the economy. We're thrilled with the results so far. Spring has traditionally been the softest season for us, but we really focused on the season this year and the marketing department has hit a home run."
Though overall circulation remained constant at just over 1 million for the 14 versions of the five unique spring books, mailing to 12-month buyers increased 40 percent.
"These were the first spring books with the larger number of 12-month buyers," he said. "We had 40,000 additional 12-month buyers, and we dropped some marginal sells. We didn't prospect as much."
Eight versions of the spring book dropped in early March, while three mailed in early April and the final three went out this month. The books were 64 pages, consistent with last spring.
"A lot of data mining was done prior to the spring drops," said Chris Topping, vice president of marketing. "We looked at value analysis, product purchasing by category and channel of purchase propensity. [The success] also has a lot to do with trying to find ways to put products in the proper position and aligning the proper price points with different segments."
Recipients' average annual household income is greater than $100,000, helping insulate the book from the recession. Men and women are equally represented in the mailings. Items range from a set of four "Party Martini" glasses for $24.95 to The Masterpiece Wine Room, priced at $2,975 for a 900-bottle capacity and $5,375 for a 2,450-bottle capacity.
The new $29.95 Wine Enthusiast Magazine Wine Guide 2002 Edition for Palm OS handheld computers, featured on the back cover, has proven to be one of the season's hottest selections.
"It's software for the Palm that lets our customers go into a restaurant or wine shop and they're in charge," Strum said. "It has more than 8,000 wine ratings. You can select wines by cost, ratings, style and region."
Strum also looked to strengthen the emotional bond between customers and the catalog. His approach included going on location to customers' homes where wine cellars were photographed for use in the book.
"We shot the wine cellars we built in people's homes so our audience could better relate to the catalog," Strum said. "Even the wannabe customers can relate to it. These were wine cellars that cost $30,000, $40,000 or $50,000. It speaks to the passion of our customer and their desire for the good life and that we're good-life providers. We give them direction on how to spend their money."
Nearly 25 percent of the season's sales are coming in via the company's Web site, while sales generated over the phone account for 65 percent.
"We would like to hit 50 percent on the Web in the next two years," Strum said.