How Wine Enthusiast became data enthusiasts
Wine Enthusiast CIO Francis Juliano had worked with direct marketing firm Belardi/Ostroy ALC (BOALC) for two years when he brought that time-honored question to the conference table yet again: Are our marketing dollars being spent efficiently?
To answer that, the BOALC team - providers of list services for Wine Enthusiast's online merchandise sales, catalogs, magazine and wholesale operations - capitalized on the companies' good relationship to offer more analytical, creative and diverse tactics. The results of the analysis caused a jump from single- to double-digit growth, says Juliano.
What went right? While list-related communications are often automated and firms must respond to demands for ROI, list service and direct marketing firms now benefit from creative looks at their data. Knowing how to look at a list to propose a new direction can boost a campaign's strategic vision and efficacy, according to practitioners. Most importantly, the revelations and tactics derived from data analysis can strengthen relationships with valued clients.
Evolving from list service to full-service multichannel marketing company isn't coincidental. It has been highly strategic for many firms in the space. BOALC hired strategists and consultants with brand and client experience, from companies such as Eddie Bauer and Red Envelope, then took more intimate steps with clients like Wine Enthusiast.
"As we [step] into a more strategic role, clients are willing to share more about their business with us," says Polly Bickel Wong, SVP of strategic consulting at BOALC. "We're not just talking about lists, strategies, opening up stores. We're helping them shift their marketing dollars more strategically through analysis. We're still focused on list services - we don't want to forget that - but what it means to be a good list manager is changing. It's growing."
For Wine Enthusiast, that meant looking at its customer data, giving structure to customer behavior and digging well beneath presumptions.
"We try to understand the behaviors and personas of what our customers take on," says Juliano. Beyond surface aspects, "are they gift givers or recipients? Entertainers or needs based? When someone buys 150 sets of stemware are they entertaining or do they own a restaurant? If you're wise you can make actions on that behavior."
Wine Enthusiast's critical data was found in the behavior of customers post-purchase. When a certain type of customer would purchase a $5,000 wine cellar, it would be assumed that the customer would then buy accessories like glassware. In fact, this customer's next purchase would be a wine cellar upgrade or a major customized rack installation costing upwards of $50,000. "We walked away with six really big æa-ha' moments," says Juliano. "We discovered or changed one major philosophy. Those were fundamental shifts."
List management and brokerage firm Statlistics, based in Danbury, CT, created growth in demand and sales for client Investors Business Daily's (IBD) lists' rental simply by thinking less vertically and analyzing the data differently.
"We saw that the revenue stream was coming from specific mailers," says senior account executive Marge Fernbach.
"Eighty percent of the information came from 20 percent of the mailers. That can be a scary thing if the economy changes. We wanted to make sure that [IBD] had other mailers to fall back on. If you stay with the same mailers, you become stagnant," she continues.
Although results may surprise, analysis is just another mandatory task, according to Statlistics president John Papalia. Echoes Fernbach, "We never look for a client to come up to us and say, ætake us out of category.' That's our job. Find the people, find their universes, their demographics and psychographics, and find the mailer to marry them to. That's one of the first steps when we take a list on."
BOALC's Bickel Wong agrees that analysis is what clients want and expect - the demand for specialized and effective audiences requires that direct marketers act with specificity, since "people want to reduce the number of contacts. It's about being more efficient. It's about how you contact them," she says, "not contacting them less."
Juliano agrees. "Much of today's marketing is a science, rather than an art form."