by
Courtney Eckerle, Manager of Editorial Content
THE CUSTOMER
Around for almost five years, Diamond Candles is succinctly named after its inaugural product line, the Ring Candle.
"[The Ring Candle] is a ring inside of a candle worth at least $10. It could be worth up to $100, $1000, as much as $5000. And you don't know what it's going to be until you burn the candle down," Justin Winter, Co-founder and CEO, Diamond Candles, said.
The idea came about over 20 years ago when Winter’s business partner was searching for an anniversary gift for his wife.
"He didn't end up doing anything with it, but a little over four and a half years ago, I had randomly met David and [his wife] Brenda through random circumstances, and we decided to test this thing out. And we launched on Facebook, and then that first year did over a million dollars in revenue worth of candles," he said.
Since then, he said, the brand is continuing to evolve to become "the next generation home fragrance brand spanning the product line, moving beyond just the online channel, and really a home fragrance made fun and modern."
For the majority of the year, he said, Diamond Candles customers are essentially "90%-plus female … but then around more popular male-to-female gifting seasons, that will be more split 50/50," he said.
25- to 35-year-old women are the largest age range group, he added, particularly women who enjoy entertaining.
"There's definitely a year-round strong gifting nature to the product as well, so whether that's just a birthday for a friend or a cheer-me-up gift or certainly something like that. Christmas or the holiday season ... for gifting occasions, as well as obviously just people buying personally for themselves," he said.
CHALLENGE
Diamond Candles was rapidly adding 20,000 to 30,000 email addresses a month to their database, Winter said. The company knew it needed to evolve email marketing to meet expectations.
Because the brand began on Facebook, social media had always been its main focus, but with the growth of its email database, Diamond Candles wanted to prioritize email marketing over social this year.
"We knew we were ready for the big time, just to start really developing our programs and thinking much more intentionally about our retention programs, and certainly email is a cornerstone to that," he said.
The team knew, he said, that email would be a great way not only to meet new subscribers but also to reactivate current customers "in a way that's protected from the alternative of some type of site-wide offer that everyone sees, irrespective of their pricing or discounting sensitivities."
At this point, Diamond Candles began working with a vendor in an effort to make its sends more intelligent and personalized.
"We could do more one-to-one with things, so we could continue to have email a major part of just our revenue," he said.
From this effort, the major question became how to take on customer lifetime value on a regular basis as programs become more mature and advanced. As its customer base grew larger, Diamond Candles needed to get more granular and targeted, he said.
CAMPAIGN
The Diamond Candles team leveraged its real-time customer behavioral data, pulled from the website, alongside historical data to translate this data into specific recommendations for when customers should receive
emails.
Click here to see the full version of this creative sample
By analyzing this information, they wanted to understand which offers and what content to send to customers as well as when it would be best received by first purchasers, repeat purchasers or simply to engage with the brand.
For example, someone with a rich buying history based in a major city may receive a 10% off coupon, whereas someone in a more rural area who has never made a purchase but has visited the site multiple times might receive a $20 off of a first purchase offer. This data was then merged with vendor demographic trends.
Step #1. Work within current resources
This new effort didn’t require any additional content creation by the Diamond Candles team, Winter said, and is functionally more of a matter of balancing the email marketing calendar.
"For example, if we're having a sale or a particular offer, we'll just work with our [vendor’s] system to create multiple different variations of creatives that communicate those different offer levels and sync that up with [our email service provider] to queue up a campaign," he said.
He added that if Diamond Candles is having a sale, which would be a coupon code between 10% and 40% off, the team would use a collection of behavioral data to determine who on the email list should get that offer.
Click here to see the full version of this creative sample
"We can set that algorithm to determine … if someone is likely to convert with a 10% off coupon code, well let's not give them a
30% off code. And we can kind of maximize our margin there, personalize that offer," he said.
Setting this effort up required some adjustments to the work flow, Winter added, as well as determining how to best utilize the vendor alongside Diamond Candle’s primary ESP.
"The great thing is you would have no idea that something is going on, I guess. For you, as the customer, ideally what this would look like is just the emails are magically ... more interesting than everyone else's emails. The content is better, and the offer is more relevant," he said.
The whole point, he added, is that from a customer’s perspective, the Diamond Candles team only wants to provide relevant messaging that you would care about.
Irrelevant email messaging is "not valuable, and kind of a waste of time," for both customer and company, he said.
"Certainly that's tied to our objectives and fiduciary duties, to increase our business KPIs. But at the end of the day, if we can make things more relevant and more interesting — and the offers more pertinent to your situation and what you prefer — then you're going to take action … And that aligns with our objectives to get more of our products in the hands of people who love them," he said.
Step #2. Scale frequency with behavior
This effort doesn’t "move the needle hugely one way or the other," Winter said. The point wasn’t to make a dramatic change in frequency, but the team wanted to make a big enough change to maintain the value in both relevancy and meeting important touchpoints.
"If we can see that someone has taken action on an email — decided to use an offer that we provided them on a Thursday, well on a Friday — we don't want to send them another email talking about that same offer," he said.
However, if the team has a customer who purchased two months ago, they know that person is not likely to purchase again before the three-month mark.
"We don't want to interrupt them with messaging that isn't pertinent to them right now because maybe they're just naturally not going to be ready to buy another candle because the one they have, they're not done using it yet," he said.
Not having to send out offers as frequently also helps Diamond Candles. If the team knows, based on a customer’s purchasing history, the customer is interested in purchasing specialty candles, they focus on that, maybe only adding the smallest level of coupon code as an incentive.
"Obviously for us, we would most often rather not have to resort to discounting to get you to do something. If we can just talk about our new pumpkin spice latte candle, and you're excited about that and want to buy, then we might talk about that," he said.
It depends on the customer, he added, but "we can definitely use several different mechanisms, depending on your sensitivity and the likelihood that you would react to that messaging to be able to do that."
The team sends emails based on a multitude of factors, site visit data being among them. Winter gave the example of sending a coupon code to someone who has visited the site and has browsed products in the fall category versus someone who has not been on the site at all.
In that situation, he said, they can postulate that the customer is simply on the fence about purchasing and needs a small nudge into action.
Step #3. Review business goals
This effort has gone fairly smoothly, Winter said, as they continue to work with the system and new capabilities.
The team has even developed control over aspects such as optimizing for offer selection strategy in a review of this process for their business goals.
He said the team tries to determine, "do we want to optimize for kind of like a net profit scenario or kind of a gross revenue type situation?"
"The longer it goes between when someone has purchased and they've not purchased, maybe the discounts get more aggressive versus maybe the inverse of that, which, depending upon our business objectives, that could really change how we … decide which offers to give what people in what scenarios and how to optimize against that," Winter said.
That is something the team is revisiting on occasion to ensure business goals are in line with the email personalization.
RESULTS
The most important aspect as this effort continues to evolve, though, is reaching customers intelligently and with value. Finding the best messaging for a customer is a constant combination of discounting versus brand messaging, Winter said.
To date, Diamond Candles has grown its email list from 50K to over 500K and has seen:
- A 160% increase in revenue in the first eight months of this campaign
- An 18% rise in average order size by repeat buyers between 2013 and 2014
- A 75% decrease in user purchase time
"At the end of the day, we want to take as many existing customers as we have … And take that one-year lifetime value and help them increase that by another 10 or 20% by better getting in front of people with stuff they care about, with offers that are valuable to them and keeping them connected with us and purchasing," he said.
Creative Samples
- Diamond Candles email
- Email with promo code
Sources
Diamond Candles Retention Science — Diamond Candles’ data vendor
Bronto — Diamond Candles’ ESP
Related Resources
MarketingSherpa Summit 2016 — At the Bellagio in Las Vegas, February 22-24
Email Marketing: Last-minute holiday deals preview wins with customer-centric approachEmail Marketing: Ecommerce retailer increases email revenue 71% with personalized content layout
