Email Marketing is Your Friend

Finding success in email marketing as a small business

We live in a society of over-stimulation. Where screens, signs, and sounds attack our senses at every turn. In fact, the average person gets bombarded with about 6,000 – 10,000 ads per day. It’s no wonder that promoting your brand can feel overwhelming and, at times, not worth the energy. However, there is a major reason why the tech giants and major corporations of the world continue to play this daily gamble in the world of algorithms—it works. 

So how does a small business gain a leg up on the competition and compete in the vast and oversaturated market? Email marketing. The potential to make a major return on your investment, excellent direct to consumer (DTC) margins, and the opportunity to establish unbeatable customer loyalty are all reasons why as a small business owner you should be making email marketing your best friend.

RETURN ON INVESTMENT

Email marketing has proven to be a money maker for brands of all sizes since the dawn of the Internet. Decades into the creation of the ARPANET (soon to become the Internet), computer scientists Lawrence Roberts and Leonard Kleinrock discovered how to make two computers “talk” to each other and proceeded to send the first computer message from UCLA to Stanford in 1965. Fascinating, I know. Bear with me.

A few years and a few brilliant computer scientists later, electronic mail is beginning to fly across the interweavings of cyberspace. Fast-forward to 1978, and we meet Gary Thuerk, then the Marketing Manager at Digital Equipment Corp., a major American company in the computer industry from the 1960s to the 1990s. Gary sent the first mass email marketing campaign. His goal was to rally attention around the company’s new T-series VAX systems. The campaign sent to 400 recipients and resulted in over 13 million dollars in revenue! And thus the gates of email marketing and all its revenue potential flung open for all future marketers to revel in all its digital glory. Way to go, Gary, and thank you.   

In today’s digital era, when a brand invests one dollar into email promotion, they are likely to see a 36 dollar return on their investment, making email marketing one of the most successful marketing channels your brand can (and should) invest in. If you need more convincing… In 2020, email marketing revenue worldwide topped the charts at 7.5 billion dollars, and there is no stopping there. Email marketing revenue is projected to reach a whopping 17.9 billion by 2027—talk about growth potential with major return! 

DIRECT TO CONSUMER MARGINS

As a small business, you have a major advantage through the opportunity to sell direct. In direct to consumer sales, DTC for short, companies beat the middleman by, you guessed it, selling directly to the consumer. They skip the step where they are forced to sell their product to a wholesaler and/or retailer who in turn will sell the product in a storefront location. The disadvantage of this method is that prices are forced to change, payments must go to the wholesaler and retailer, and often times more taxes are involved. On the other hand, the advantage of selling DTC is that you can price your product slightly above the average wholesale price and slightly below the retail price, yet it is still far above cost. This leaves you with a happy customer and even better margins. In fact, successful DTC companies aim for a gross margin of at least 50%, while some can reach as high as 85%.

FOR MY FRIENDS IN THE WINE INDUSTRY

In 2021, DTC sales represented about 10% of total wine industry sales in the US and about 65% of the average winery’s total revenue. In 2020, it’s no secret that online sales were growing at a higher rate than normal due to the pandemic and mandated lockdowns. Data analysts and experts expected to see sales in this channel decrease with the re-opening of the economy, however online sales for wineries only moved down from 9.8 percent of total sales in 2020 to 9.1 percent of sales in 2021, and overall wine e-commerce sales remain 146% higher than pre-pandemic numbers. This resilience proves a much stronger shift in consumer buying preferences toward e-commerce sales.

CUSTOMER LOYALTY

In addition to increasing your revenue and margins, email marketing also allows you the opportunity to connect with your customer base, establish a rapport with them, and even draw new consumers to the brand. Email marketing allows you the flexibility to not only alert  potential customers about upcoming promotions, but also remind them of past products that they have enjoyed, suggest similar products, and answer any questions they might have. It becomes a means of communication allowing you to be in several places at once, reaching new potential customers all over the world.

Thanks to the continued improvement of e-commerce platforms, we now have the ability to personalize each email to make it look and feel exactly the way you envision it. Colors, fonts, photos, and videos are captivating and will help tell a story to your audience. The longer you continue to send more consistent messaging, you will establish a strong brand identity that your customers believe in and will want to follow, share with their friends, and most importantly feel good while enjoying the product! 

Now that you understand why email marketing is imperative to your overall marketing plan, the fun begins! Together we can create the perfect plan for your brand and your audience so you can capitalize on email marketing ROI, DTC margins, and most importantly create long-lasting customer relationships. Are you ready?