How Naked Wines is targeting email marketing through customer data

Crowdsource funded online wine retailer shares the journey it's on to bring one-to-one engagement to customers communications

Being successful at one-to-one, personalised email marketing comes down to faith in the quality of your customer data, according to Naked Wines’ marketing leader, Lachlan Murphy.

The crowdsource funded online wine retailer has been operating in Australia for the past three years and now boasts of 50,000 subscribers nationally. The business was founded in the UK eight years ago, and also operates in the US.

As a startup, Murphy told CMO it kicked off promotional email communications locally through messages to customers on a weekly basis. Thanks to the work done by its more established sister company in the UK, the group had partnered with email communications vendor, Adestra, from the get go, and also created a seven- to nine-stage welcome campaign to on-board customers.

Being a crowdfunded retailer, there was a need to educate customers from the outset about how the relationship between brand and consumer would work, Murphy said.

“We’re taking $40 from them each month, which also needs to be explained,” he said. “So we put an automated welcome process in place, which explained exactly what they are getting into. Once they become an ‘angel’, or subscriber, they move into more of a traditional promotional plan and marketing strategy.”

Since then, Naked Wines has been increasingly targeting email communications by segmenting its customer database using transactional and behavioural insights. For example, Murphy said the company is tapping into the social aspects of its website, such as user reviews and comments, as a way of capturing more behavioural data.

“We record everything, which helps, and we also have that social aspect to our site, where we are always asking customers to come back and rate and review products,” he said.

Naked Wines is also tracking whether consumers came to the site organically or as a result of remarketing, and then attempts to talk specifically to that.

“We can segment our database based on likes and dislikes, individual products and styles of products, which means we can go out with the same campaign to everyone, but split into groups into things like guys that love red wine, sort of like, and don’t like red wine,” Murphy said.

Splitting 50,000 subscribers into three, eight or even 10 groups still means you’re going to have some who aren’t quite in the right grouping because you’re only looking at certain factors, Murphy admitted.

“Sometimes, you get people coming back telling you they do love red wine, so in that case, we direct them to the preferences page where they can set everything around what they like,” he explained. “Having that capability lets us collect as much data as we want, and from there we can tailor our promotional plan to them.”

Naked Wines is using the Adestra platform directly to filter customer segments, something it initially did in Excel. The benefit of executing within the one platform is having live email counts, Murphy said, reducing human error.

Of course, data doesn’t work in isolation, and segmentation is backed up by the Naked Wines team’s extensive wine knowledge. “We have people who have been with us since the start of the business who know when a particular wine offer goes out that it can skew the data,” Murphy continued.

“For example, if we gave away a free bottle of something unusual and then have it again the following year, we look at those who bought two bottles rather than one.”

Naked Wines’ end goal is that emails are personalised at a content level, and that it is talking to people in a personalised way about how they’re feeling emotionally, their behaviour and if they’re happy with the brand or not, Murphy said.

The company is also looking to ensure products it recommends via email are not just as a result of marketing splitting customer list into groups, but individualised to that customer’s preferences. To do this, Murphy said the group is working with Adestra to have an XML feed that allows individual emails to individual customers.

“This will mean we can have a hero product at the top, then below that, personalised recommendations so that in the end, you have 50,000 emails going to 50,000 customers,” he said.

Backing your data and making sure you have enough data on customers is the key to achieving this holy grail of one-to-one engagement, Murphy said. “Not every customer rates or reviews, so you’re going just off transactional data with some of them,” he said. “If they have bought one case of wine, and you’re delivering them five wines, there’s also that question of if you are going to deliver the same ones or offer something new.

“Personalisation is incredibly helpful for those sticky customers, and we’re looking to recommend a lot more to them, but with our less engaged customers, we’d potentially need to stick to a more traditional path.”

Adestra commercial director, Carl Chambers, agreed businesses need to be careful in taking a personalised approach if they don’t have the data to back it up.

“Businesses should wait until they have the data on their consumers before taking a fully automated, personalised approach to communications,” he said. “The way the guys at Naked Wines work is impressive as it’s really data driven.

“Most businesses we speak to have problems with data – the quality of data, amount of information they hold, data sitting in disparate systems – and trying to pull it together to send email communications is a major challenge.”

Of course, the surprise and delight factor shouldn’t be forgotten, and Murphy recognised the need to keep things fresh. Another unique issue to Naked Wines is that because it operates under a crowdfunded model, it can’t buy in more wine when bottles run out.

“I’ve collected data saying the customer likes a certain type of wine, and I now need to use the data to sell a similar kind of wine or something else from that winemaker,” Murphy said, “That’s a big challenge in that you can’t always just target this person because they like this vintage – often it’s not there anymore.”

With email marketing remaining the preferred method for brands to engage with customers today, Chambers warned organisations of just how crowded the email inbox is. According to a recent survey conducted by Adestra, consumers are increasingly setting up second email accounts in order to better filter and choose the types of email communications they are subjected to.

“I expect there will be some big changes that will come that will help users sort through the email they don’t want to receive. Gmail, Outlook and co are going to make changes because customers are not getting a good experience right now using their inboxes,” he said. “It’s therefore vital that businesses get on that road to getting all their data together and try and drive personalised email communications.”

Murphy suggested brands and email client providers have two different interests.

“Providers want their customers to have a clean, simple experience and communicate with exactly who they want to communicate with,” he said. “Whereas brands want to be at the top, regardless of whether the customer wants to see them or not. There are two different ideals at play.

“The clients are going to win, as they’re the gate keepers. It comes back to being relevant to your customer so they put you at the top.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

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