We used email marketing for eCommerce and learned valuable lessons that every business owner and marketer can benefit from. Here’s our story.
In 2011, my friends and I had a simple idea. Eventually, we just didn’t have enough money to uncork a few good bottles of wine a month.
So we decided to create a site to help people drink great wine at an affordable price. But we didn’t just want to make a profit.
Besides making money
we also wanted to do good in the process. So we wanted this business to have a cause. We thought, “Wouldn’t it be great if we could make a difference and offer wine at an affordable price?!?” That’s when we came up with the idea of donating clean drinking water for every bottle of wine sold.
At the time, there were really cool companies doing similar things in other industries. For example, Tom’s shoes donated a pair of shoes for every pair sold. That was an inspiration to us, so we decided to weave our own thing into it as we were getting the business off the ground.
So we teamed up with Charity Water and came up with a way to donate clean drinking water for every bottle of wine sold. We were excited about our potential to make a difference and help people drink better wine.
We had our own concept and we started to implement it
The next thing we needed was a name. Looking back, we probably could have come up with a better name, but we called it CellarThief.
You see, a Thief is a device used by a winemaker to sample wine from a barrel during the winemaking process. We thought it was a cool play on words because we were also trying to offer great wines on the cheap.
Wine Barrel Thief
After the name, we needed to come up with a logo. So we turned to 99 Designs, asked friends to vote on the logos they received, and chose a logo.
Our logo for CellarThief looks dated now, but we were very happy with it 🙂
With our concept, name, and logo in place, it was time to build our website. We asked a friend to create a unique design and teamed afghanistan whatsapp data up with a small development company to build our site on an e-commerce platform/CMS that was soon acquired by Adobe. We wanted the site to be cool, inspiring, and fun.
The original design of the CellarThief website
Finally, we needed to figure out where the wine was coming from. Luckily, our team had connections in the wine industry, both with wineries and distributors. The idea was simple: if we could sell a batch of a certain wine in one day, would they give us a big discount that we could then pass on to our customers?
Wineries and distributors embraced the concept and we were quickly able to build a good lineup of the best wines we could offer at a great price. We gave them an estimate of how many cases we could sell and they held them and then we picked them up and shipped them to our customers.
We felt that storytelling would be the most important part of what we did, so we were excited to interview winemakers, tell the backstory of the winery, and help our customers connect with the people behind the wines we sell.
Once many of the pieces were worked out
CellarThief was born. It was a tiny company with no outside funding. It was just a few friends trying to build a nice little business that helped people drink great wine at an affordable price. And make a big difference.
The first wine we offered was a hit – Robert Mondavi Reserve Cabernet.
The first wine from CellarThief, offered
Then it was time to figure out how to attract customers. We knew we had to find a balance between taking care of existing customers and finding new customers.
That’s why we turned to PR.
We created our social networks.
We entered into several partnership agreements and tried to establish word of mouth.
And while we were looking to get new customers, we were also investing heavily in customer service for our existing customers.
With each shipment we included a postcard asking people to spread the word about CellarThief.
It was a labor of love, and we earned amazing customer loyalty. We still call some of our first customers friends.
We got some initial traction and got some initial sales. And then it was time to try to take the business to the next level.
Like many small, independent businesses, we had little money and few big competitors. There were big online wine sellers and a few new entrants offering a deal of the day on great wines. So we had to figure out how to stand out, and we had to figure out the math of our business quickly.
Ultimately, no matter how passionate you are about your business idea, you need to figure out how to attract customers . And with so much competition in virtually every industry on earth, you’ll have to find a channel you can conquer and own.
Source: Mabel
At the time, we simply couldn’t afford paid acquisition channels. These channels were much more accessible back then, but our margins were slim… and, well, did I mention we were self-sufficient?! So we had to find a channel that would allow us to build relationships with our customers and that would drive regular, consistent sales.
We earned some great media, even being named a “Hot 100” retailer by Internet Retailer (a big deal at the time). That media was great, but it was also fleeting.
We’d get a media hit, see some customers come in, and then two weeks later the traffic would drop off and we’d have to get another media hit. It was tough, and it meant our sales were out of our control.
CellarThief Named to Top 100 Online Retailers List
So we took a deep breath and looked at what drives our sales. Most companies just don’t do that. They have their channels, their budgets, and their sales. And they just don’t do the work to understand where their best customers are coming from.
But we didn’t know how much each of them was contributing to our sales each day, week, and month.
What made it even more difficult was that we couldn’t predict how much revenue we would make a day, week, or month in advance. This started to create problems with our purchasing. We simply didn’t know how much wine we should take on from our suppliers. Sometimes we would sell 5 cases, and sometimes 50.
So, we chose a channel that we wanted to dive into, and that channel was email marketing for e-commerce. We knew that email campaigns would be useful for us. We knew that email campaigns could be incredibly useful and successful. And as I said, our goal was to tell the stories of the people behind the wines, and we thought email was the best way to do that.
We knew that our e-commerce efforts were helping us build relationships with our customers. But quantifying the financial value of our email marketing efforts was difficult.
We experimented with each topic and looked at other e-commerce companies
Subject lines to see what we could.
What seemed to work one day, didn’t work the next. But we kept moving forward and trying to learn.
Something that was bugging us was that we really needed to have a “North Star Metric” that we could use to be successful in our email efforts. Then one day we were in a meeting and I asked the question, “How much is an email subscriber worth to us?” And no one could answer.
Email marketing for eCommerce has evolved significantly since we first started CellarThief. But one thing hasn’t changed in the last decade. Most eCommerce companies still can’t answer a simple question: “How much is an email subscriber worth?” And without that knowledge, scaling an eCommerce email program is difficult, and without a successful eCommerce email program, scaling an eCommerce company is nearly impossible.
So let me go back to my CellarThief story. We were trying to build a great commercial brand, and with little money, we thought the only way to do that was to get even better at our email marketing.
Over the next few weeks, we set out to answer the question… “How much was an email subscriber worth to us?” At that point, we had about 5,000 email subscribers. These subscribers had signed up to receive offers, and we were growing that number by a few per day. These email subscribers were very interested.
Example of a High Converting Ecommerce Marketing Letter
Our open rates were above 35%. Our click-through rates were above 2.5%, and our purchase rates were steady. If we could do that, our business would be predictable. And the enemy of growth and success in a startup is unpredictability.
Over the next few weeks, we figured out that our average email subscriber was bringing us just under $2.00 in net revenue per month. Again, we were TINY, so we didn’t have a lot of revenue per month, but now we had the knowledge. And now we had the potential to scale our business in a predictable way. And now we knew that our best chance to scale was to use eCommerce marketing tactics and best practices to scale.
Armed with how much each subscriber was worth to us, our efforts now had to focus on whether we could get a subscriber for less than they were worth to us. So at that point, it all came down to testing different channels to acquire new subscribers for our emails.
And we started investing small amounts of money in paid acquisition to generate customers, leads, and emails.
Most of these tests didn’t work. Some attracted almost zero email subscribers. Some did attract email subscribers, but they did so at such a high cost that we knew we couldn’t optimize that price to a level that would be profitable.
But we didn’t lose hope and saw glimmers of positive signs. Some channels were either close to breakeven, so we thought we could optimize those efforts to help us become profitable, or were immediately profitable.
This gave us not only a North Star metric for our eCommerce email efforts, but a North Star metric for our business as a whole. We obsessed over this metric, found channels that worked, and began growing our email list rapidly.
Polaris Metric Definition by airfocus
Over time, the business began to grow and became profitable. Eventually, it was acquired by a competitor, given the consolidation and the fact that we were working on a number of other businesses. But the lesson was learned.
Email marketing is critical to the success of an eCommerce company. Everyone knows that. But knowing how much an email subscriber is worth is key to success in email marketing for eCommerce, and almost no eCommerce company knows how much an email subscriber is worth to them.
It’s been over a decade since we launched CellarThief, and we’ve all gone on to do very different things. However, I now help run Hello Bar. Hello Bar is a company that has also been around for over a decade. The platform is used by over 700,000 websites, but some of our most successful clients are e-commerce companies.
Hello Bar – Email Popup Capture Tool for Ecommerce
Many of these companies use Hello Bar in their eCommerce marketing strategy and workflow to attract subscribers. I wish I had used Hello Bar back in the day with CellarThief. It would have made our lives easier and the business much more profitable. I see what Hello Bar does for some of our eCommerce clients and think back to how we would have used it at CellarThief.
I often say that understanding your email metrics can be the difference between success and failure for your online store. So I want to share some thoughts to help tip the scales in your email marketing efforts.
Let’s first define email marketing in eCommerce?
Before we move on, let’s first define what we mean by email marketing for e-commerce. An e-commerce company can use email in a variety of ways, and not all of these ways fit the definition of email marketing for e-commerce.
Email marketing is using email to capture highly engaged email subscribers and potential customers to improve their connection and affinity with your store and brand. The goal is to turn visitors and/or one-time customers into repeat and loyal customers who will come to you first when they need to buy something you offer. Often, your email subscribers become your most loyal customers.
Ecommerce email marketing does not include emails you may send where recipients have not opted in to your email list. For example, if a guest customer receives a receipt from you but does not opt in to receive marketing emails from you, that customer is not necessarily part of your email marketing efforts.
The great thing about email marketing in e-commerce is that it allows you to build long-term relationships through a direct communication channel. And by building relationships, you can turn those relationships into sales. And through those sales, you can earn loyalty.
But why is email marketing so important in eCommerce?
Customer acquisition is becoming more and more expensive for all online businesses. This is true for almost all online categories. But it is especially true for e-commerce companies.
Gone are the days of cheap Facebook and Google ads. Using third-party data has become impossible or really expensive. And in almost every e-commerce category, competition has increased. It’s also become harder to track the effectiveness of specific paid customer acquisition efforts using Google Analytics. This leaves you with a lot of unknowns and makes it harder to decide whether you should increase or decrease your spending.