Laithwaites is the UK’s largest mail order and online wine merchant. Established in 1973 they have several million customers. Historically they have recruited new customers using a mix of direct mail, partnerships and press advertising.
In 2005 they partnered with UKTV channels with an intention of adding television to their customer recruitment activity.
During 2005 and 2006 the partnership experimented with advertiser funded programming, long and short form DRTV, and with integrated online activity using the UKTV web presence and email database.
None of this activity matched the cost efficiencies of direct mail or press.
In 2007 Laithwaites appointed MC&C and Reynolds Busby Lee (RBL) with a brief to reduce cost per new customer from TV, and to create a new high volume recruitment channel for them.
MC&C audited and benchmarked previous results, and recommended changing target audience, channel mix and daypart/programme selection
RBL audited call handling process, and created a bespoke TV only customer service experience.
Jointly the agencies recommended an initial test using a long form (15 minute commercial) editing material from the previously created advertiser funded programming. This allowed us to minimise risk in terms of capital investment.
A first test ran with a budget of less than £25,000 in September 2007. Response was directed to a dedicated call centre team and to a campaign microsite.
This was an instant success, with costs per new customer below that achieved in press for the first time, and reduced by more than 90% from previous TV activity
Long form form only solved 50% of the brief however.
Whilst it generated very efficient costs per new customer the volume that the channel could produce is limited. But success gave us the confidence to test short form
January 2008 saw us test a 120” second commercial on a range of multichannel stations, again with a very limited budget. Again we saw instant success, and this time with the added benefit of huge potential volume.
However before rolling out the test we waited two months to monitor the subsequent purchase behaviour of the new customers. This is a vital metric as, like all mail order/etail companies Laithwaites make all their profit selling second and subsequent cases of wine to customers.
After two months analysis we found that whilst television gave us cost effective new customers, they didn’t buy as much subsequently as those from other media
Again, back to the drawing board. This time to re-craft the consumer offer within the commercial and subsequently in the script that the call handlers and web site use.
A third test in June 2008 was again an instant success, and this time on all three metrics: cost per new customer, volume, and subsequent purchase.
This time we moved from test to roll out. Within six months television has become the second largest channel by volume for new customers for Laithwaites, and the second most cost efficient, both at recruitment and for subsequent profitability.
Television is now a core element of Laithwaites marketing mix.
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