What this food gifting business has had to do to modernise marketing
- 10 July, 2018 10:32
An overhauled ecommerce site, marketing specialist skills in-house and an investment in a next-generation digital marketing platform has seen US-based gifting business, Hickory Farms, lift off-season revenues by more than 30 per cent.
Speaking to CMO during the recent Salesforce Connections event in Chicago, Hickory Farms CMO, Judy Ransford, said the 76-year old food gifts business has felt like a startup since it was acquired by investment group, Modjule, in 2015.
Despite high brand recognition, the former family-run business, which operates more than 500 pop-up kiosks in the US and Canada during holiday seasons, had suffered a decade of dwindling growth, falling customer list rates, and operated with a maintenance and cost-cutting mentality as a result.
In 2016, investors set out to restructure and modernise Hickory Farms, bringing in experienced retail and consumer goods leader, Diane Pearse, as CEO to lead the way. This was also when Ransford joined, alongside COO, Matt James.
Modernising the marketing function
A huge component of modernisation is about improving the company’s relationship with the customer all year-round, Ransford said. And that’s where skills and technology investment comes in.
Since joining two years ago, Ransford has made significant investments across the board, including restructuring the marketing function and bringing talent in-house. Her remit includes creative and brand, integrated marketing, digital, print catalogues, ecommerce, Web development and B2C customer service.
“The company had previously stripped down the internal infrastructure to a couple of core managers managing work with agencies,” she said, noting everything from creative to email, execution and strategy was outsourced. “When you’re in that mode, you don’t have people taking ownership. And when you’re pivoting into an aggressive growth strategy, you need people in-house.”
A key communications vehicle is email marketing, which previously sat fourth in the list of ecommerce traffic sources. Ransford said she has a special affinity for email “in terms of all the levers a CMO can pull”.
“In ecommerce, email is a super powerful, low-funnel tool with your best customers. But the company really wasn’t treating email in that way,” she said. “One of the first things I looked at was bringing all email in-house and building up an internal function.”
Having previously had an ExactTarget platform managed by an outsourced crew, as well as Demandware (now Salesforce Commerce Cloud) in-house, Hickory Farms brought on Salesforce Marketing Cloud as its automated marketing platform. It also began working with local integration player, LyonsCG, (part of Capgemini) and hired its first email marketing manager.
As this was taking place, Hickory Farms instigated a site rebuild improving front-end capability and fixing technical infrastructure behind the site. This immediately drove a 10 per cent improvement in conversion rates during the holiday season.
Ransford said it wasn’t all technology, however, and noted creative came in-house at the same time.
“That really changed our art direction and photography and a lot of the content started changing. So it’s been evolving together,” she said. “In 2017, we then did a site genesis upgrade, upgrading the whole platform, and we also implemented Marketing Cloud.”
Getting executive buy-in
With investors actively looking for growth, Ransford had a lot of leeway to start with. A great relationship with her CEO has also given her plenty of freedom.
“That said, as I came in, there was a lot of money being spent on things that we could easily pull back on,” she continued. “For example, bringing money being spent on agency talent back in-house, or finding activities less important that weren’t working for us as much. But as we switched over the platform, we probably had three months in the last fiscal year where we were operating on both platforms, so we did incur a one-time switchover cost. Yet in the long run, we’re spending less.”
Ransford cited technology helping in three key ways: Smoothing out seasonality as much as possible, improving email deliverability and list management, and better engaging with customers for longer and in ways more relevant to them. For example, Marketing Cloud has helped Hickory Farms retain customers on email.
“Typically, we would grow our opt-in email lists significantly during the holiday season, and our 500 retail kiosks were a great source of new email opt-ins. We’d also grow the list through ecommerce activity, ending up with a giant bump in our lists of up to 50 per cent in December,” Ransford explained. “Then, by March, we would have lost quite a bit of that list.
“What the technology is allowing us to do is be much smarter about list management. It helps us deliver emails at the frequency customers want, and to make sure the content quality is better. This year we’ve seen a huge improvement and not such high attrition rates as a result.”
Hickory Farms partnered with Return Path on list management. “It’s not sexy but it’s one of the biggest contributors to the numbers we’re posting,” Ransford said.
Another task has been adding in an opt-in based SMS program, something made possible through the new marketing platform. “We did some tests last holiday seasons with different vehicles to adding to our list. It’s still a small program, but in working for Redbox previously, I’ve seen how SMS can be a significant revenue driver,” Ransford said.
“It’s a bit different for us at Hickory Farms as we’re a low-frequency buy. But today’s consumer likes multiple means of communication.”
To grow SMS engagement, the group has tested store signage, messages on the receipt, sending people coupons and deals as well as social. SMS is also a mechanism used to get people to opt into email via a shortcode. Having that integrated in one platform has been a huge improvement, Ransford said.
Up next: The road to building tailored communications plus how to determine key metrics for success
Building to tailored communications
The next stage has been shifting from a wholly batch-and-blast email approach to tailored communications based on customer segment as well as activity. For instance, the company historically thought about itself as a holiday company and would send a similar series of emails primarily during the holiday season year after year.
“As you might expect, we were seeing quickly eroding email stats – we had been on our third year of rapidly declining performance,” Ransford said. “This had to happen in two parts: One was content; the other was deliverability, as we weren’t managing that at all. We were paying the price for that.”
While some trigger-based email was also in place, such as for abandoned cart or on-boarding, this consisted of one standard email.
“Putting the journeys in place within Marketing Cloud is delivering better performance from a revenue perspective, than from just the regular newsletter cadence that goes out,” Ransford said.
“We’re still on this journey. The team from LionCG helped us with initial customer journeys, which were the basic ones you’d expect. Those are still the core of what we are running, but those alone are driving a tonne of value. It’s not micro-targeted, but we have multiple stages to each journey.
“In a basic welcome series, if someone doesn’t respond to the first one, you’re coming back with different type of content, a different touch, at a different point in time. That’s also integrated with Ad Studio, so we can integrate those journeys with Facebook as well. That is driving a lot of additional response and success.”
Hickory Farms has also started to customise and specialise. “We have one base welcome journey that branches depending on customer responses to that; now we’re looking to say we could have multiple journeys depending on how someone came to us, such as website opt-in versus a Facebook lead ad,” Ransford added. “If someone is more interested in business gifting, we could then give them different content.”
Priorisation and ROI wins
Like most marketers, the to-do list at Hickory Farms is much longer than the resources at hand. Having one marketing and ecommerce platform and one partner across the group has at least helped improve efficiency and removed integration issues, Ransford said.
To help ensure teams are working towards aligned goals, Ransford said the key metrics for success around commerce are the trade-offs between driving conversion, traffic and AOV. On the marketing front, Hickory Farms has seen consistent growth in direct response overall, a lot of which can be tied back to email. A core metric here is last-touch attribution for revenue.
“That grew significantly year-over-year, up about $500,000, which is a big percentage increase,” Ransford said. “In terms of sources of traffic to the website, email went from number four to our number two source in the first season.
“This year in our off-season, email is performing off the charts. Last year we were still on the upward hill on deliverability; right now we’re in Father’s Day selling season, and we’ve been seeing 2x revenue from email on last-touch basis in this last two-week period. We’re about 30 per cent up for first half of the year versus last year and email is the biggest delta of that. This is combined with conversion on the website, which has also improved. A lot of that has to do with site speed.”
A key commerce priority is to lift the mobile experience for Hickory Farm customers, a move that should also help it expand out from an older demographic skew, Ransford said. Another focus is on streamlining customer experiences digitally to remove any friction points.
“Things like easy access to stored address, easy to use multi-cart shipment – those are things we’ve had to make some customisations on the Commerce Cloud base. We’re continuing to work and evolve those,” she said. “We’ve seen good success with some of those, along with messages around shipping restrictions.
“I love that the things you do to create a wonderful customer experience and ease the journey tend to be the same things that drive conversion.”
- Nadia Cameron travelled to Salesforce Connections in Chicago as a guest of Salesforce.
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