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Author:
Ransom of Agui
published
August 30, 2024
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. We wanted to help people drink great wine at an affordable price.
We were a small group of friends trying apparel company database to build careers while living in California. We had young children, new mortgages, and the expense of trying to make it in California. 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 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 - we won a bunch of awards for it
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. We did this mostly with our time, because, well, we didn't really have any money.
We included a handwritten note in each box.
We include tasting notes with each wine, including recommendations for food to serve with each wine.
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 coming 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. We were the same way.
We knew we were getting some sales from SEO. We knew we were getting some referral traffic. We also knew we were getting a few affiliates promoting us. 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 spent 60 days really digging into our email marketing efforts and email campaigns. We looked at our open rates and our click-through rates. We compared them to others. We tested sending one email a week versus multiple emails a week. We tried different copies. We learned all about email deliverability and how to avoid spam filters.
We experimented with each topic and looked at other e-commerce companies' subject lines to see what we could. We tested days of the week and times of day for sending our email campaigns.
We learned everything about what others were doing to succeed in email marketing for e-commerce. We iterated and iterated on our email marketing strategy. 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.
We had all this data. We knew our open rates, our click rates, and our purchase rates. We knew how many people were on our lists, how many people were unsubscribing, and how many people were being added.
We knew so much about email marketing, but we couldn't answer one question: "How much is an email subscriber worth to us?"
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.