A Five-year Historical Review of Performance Metrics
By: Susan DeMatei, Founder of WineGlass Marketing
Since 2018, WineGlass Marketing has monitored email responses to help plan and inform our campaigns. (You can find the 2022 report at wineglassmarketing.com/2022-email-benchmark-report.) For this year, we included a look back at five years of data because it is a fantastic opportunity to track the impact of COVID on our email responses. The behavior changes of planned campaigns by wineries and customers’ reactions during COVID and Shelter in Place should be evident by looking for anomalies. This article will review the historical data to compare to 2022 data and trends.
INCREASED FOCUS ON DATABASE GROWTH
A byproduct of COVID is that we learned that keeping in touch with our customers is essential to our business survival. When the steady stream of new customers off the freeway to our tasting rooms stopped, we found ways to talk to existing customers in our database. We remembered what we learned when that freeway opened again in 2021. We kept adding names and coveting that connection, swearing we would never leave ourselves that vulnerable again. Between 2020 and 2021, the average database size jumped 37% to over 6.5k.
But, we took our feet off the gas because, in 2022, we saw it fall to the lowest point since 2018. Let’s hope that in next year’s benchmark study, we see increased attention in this area and that our databases grow again.
THE AVERAGE MONTHLY CAMPAIGNS PER WINERY ALSO FLUCTUATED
We interpret this increase as wineries finally started segmenting during COVID because they had the time and resources to look at their data. So, when 2021 came along, it was game on with A/B splits, automated drip campaigns, and segmented offers.
We also noted a great deal more “resends” in the data from 2022, showing that more wineries are comfortable with reminding non-openers or non-responders that they’re missing out on a great deal. In 2022, the wineries surveyed reported an average of 5.27 campaigns per month – either completely new campaigns or resends or different segments.
SEASONALITY IS STARTING TO CHANGE
If we split out volume by month for these five years, we get an idea of the increase in campaigns in 2022 and the seasonal trends. Wineries cluster emails around club shipment times in March and fall harvest and load more holiday emails into the fourth quarter. This trend has been consistent throughout all five years.
However, in 2022 we saw more emails during the summer. Perhaps this is because of the increased adoption of summer “cold” shipping, or segmentation and testing are planned in the summer months to minimize the impact on crucial selling seasons. But we can say that going “dark” in the hot months is no longer a common practice.
OPEN RATE DECREASED, BUT CTR INCREASED
Open rates have been on a steady decline for the past three years. But don’t worry; this is consistent with any industry trends and has been this way year after year since somebody sent the first email in the early 1990s. Why? Two reasons. First, as consumers, we’re tired of emails. As any of you know, you work hard on that subject line and content to get attention. We must overcome considerable inbox clutter.
And secondly, there is an inverse relationship with volume. As marketers, emails are cheap, so the ROI is worth it to send a lot of them. When consumers don’t open them, we resend reminders. We get a few more opens, but typically these emails perform worse than the initial email launch, which brings down the overall campaign open rate.
Sadly, although they clicked to go to the website, the conversion went down (shown on the cart with the orange line and right-hand secondary axis.) This decline is the fault of the website page, not the email. Click-through rates have increased. The emails enticed potential customers to open, read and click, but something happened. Google Analytics provides this data from the website. If wineries are not looking at their visitors’ paths and creating custom landing pages for each email, the most compelling email in wine country may not end with a sale.
The common question is, “how frequently should we email our customers.” The answer is to send emails as often as possible as long as you can offer compelling content. Customers will tell you when they don’t value your email – they’ll leave.
Looking at the bounce rates, with all the campaign increases in the past five years, wineries did an excellent job of keeping the segmenting tight and the content on point, as evidenced by the decrease in bounce rate.
In sync with our tendency to send more emails in Q1 and Q4 – open rates by month show the inverse. Our customers are more likely to open our emails in Q1, Q2, and Q3 when there is less clutter in their inboxes. Open rates are the lowest in the fourth quarter when the email frequency is highest.
Click-through rates follow a similar seasonality to our frequency and show a higher CTR with more campaigns. Looking at wineries’ sales, we can confirm that Q1 and Q4 is the online buying season.
AOV AND AVERAGE ORDERS PER CAMPAIGN ARE BACK TO NORMAL
So, did all this convert to dollars? Sort of. This chart shows the Average Order Value in the blue bars, and the orange line is the average number of orders per campaign. It makes sense that during COVID, we saw a spike in orders (because there was no other way to order) yet a dive in AOV (due to discounts.)
If you combine the relatively equal AOV and average orders per campaign for the past two years with the previous chart that demonstrates a decrease in conversion rate for 2021 and 2022, we see more frequent campaigns and higher prices to counteract the lower conversion. That is one way to compensate but imagine the impact if that conversion rate went up.
The summary? Email is far from dead or a bad investment, but to combat lowering open and click-through rates, there is little to do about maturing channel fatigue except write the best subject lines you can and create compelling content your targets want to read. We say better content and not better offers because the click-through rate went down when everyone slashed prices and offered steep discounts in 2020. So if you focus on good content and segmentation, your emails will continue to bring you sales.
Susan DeMatei is the founder of WineGlass Marketing, a full-service direct marketing firm working within the wine industry in Napa, California. Now in its 10th year, the agency offers domestic and international clients assistance with strategy and execution. WineGlass Marketing is located in Napa, California at 707-927-3334 or wineglassmarketing.com