Learn the basics and best practices of databasing, including how your database functions as a valuable tool to help you communicate directly with customers and drive sales growth.

Social media. You know that’s the hot trend. You’ve got videos. You’ve got a decent following. You may even have a college kid from some stellar agency making posts to your Facebook, Twitter, and Snapchat profiles. That’s great! Engagement numbers are through the roof! Now where are those darned online sales?

As a generally accepted rule, for the most part, social media does not drive direct sales. Instead, it serves as a necessary brand and image builder, sometimes even considered a third-tier advertising vehicle. Similar to social media, but even more valuable, as we’ll talk about, databasing must also be recognized as a requirement for any product on the market.

How are you doing in your databasing department? If your answer was “Meh.” or even worse, “We’re supposed to have a database?” then we definitely need to talk.

Why Email Marketing?

Email marketing acts as the essential bridge between your social media activity and your online sales. Think of it as your own broadcast channel. It behaves as an outlet for you to get your message across.

In contrast to social media, which is like yelling into a megaphone, email allows you to communicate directly, one-on-one, with an audience that sincerely wants to hear your message. They’ve opted-in to receive your newsletters because they care about your product and trust it. They spend their free time opening your email and interacting with it, as opposed to social media where your brand’s posts are one of many items that flash by their eyes with the flick of a thumb scroll.

But don’t take our word for it, check out what Mailchimp, one of the oldest and largest marketing providers for small businesses, says about email marketing. 

Return on Investment

The first question to think about when building a database is “What is the price point to gain a member”? This varies from product to product based on your customer volume and price point. Do you sell widgets for $2 apiece or do you sell sprockets for $12,000 each? Knowing what you want to invest up front will help set up your expectations. For most retail grocery CPG brands, opt-ins will cost on average, about one dollar.

Okay, we’ve spent $1 on a subscriber. Now how much will you make on each subscriber per month? There are MANY different factors that can influence your revenue, including (but definitely not limited to): time of year, quality of content, and frequency of emails. It definitely depends on how much your product sells for but we estimate that you can expect somewhere between $.50-.80 per member in revenue per month for a small-medium sized CPG business. Get enough members and you’re looking at a new revenue stream.

How to Get Started

Let’s face facts: it can be really hard to get an email audience, especially if you’re starting from scratch. There needs to be an incentive to your subscribers.

When approached by clients we usually have a few different methods for gaining subscribers. First and foremost is contesting. Contesting is exciting, especially if the prize is something money can’t buy or really fits your audience. Another method is an offer like free shipping or an extra discount on their first order.

Download our FREE Guide: Contest Marketing Strategy

Quality Over Quantity

Next, think about the quality of your list, never the quantity. We recently inherited a list that came from a client that had over 4,000 contacts. For a small business, that’s great! But as we combed through the list after sending a few newsletters, we noticed that the open rate was terrible, the click-through-rate was worse, and online sales post-newsletter were atrocious. After analyzing the list, we found most of the email addresses were “no-reply”. We quickly realized that 1.) the client never asked for permission to email these people and 2.) we needed to think of a solution. Fast!

We used a combination of Facebook posts and ads, website pop-ups, and digital POS opt-in opportunities to rebuild the list into something that made all of the effort worth it. After the rebuild, we saw the database audience decrease by 75%, but the open rate went up by 339% and click through rate jumped to over 1,000%! That’s a huge success for us, the marketing team, but how did it impact online sales? In months that we sent a newsletter, sales were up a whopping 98% on average. Done right, databasing can mean big gains for your brand.

To learn more about impactful database-building and contest marketing strategies, get started with some free advice from the shopper marketing experts at Cliffedge Marketing.
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