Why you should focus on email marketing in 2022 (not Facebook)
By: Caleb Simpson
Tags: Online Marketing, Direct To Consumer, Email Marketing, Ecommerce, Facebook Marketing

The secret to growth is retention

Photo by Solen Feyissa on Unsplash

If you own a CPG or direct-to-consumer brand (D2C), chances are you are plenty obsessed with how to increase your online sales. If you aren’t, you should be! If 2020 taught brand owners one thing, it’s that you need to be omnichannel, which includes focusing on your online sales.

Here are some compelling stats/reasons that will hopefully help you realize why you need to focus on email marketing.

In 2021 the average click-through rate for Facebook Ads across all industries was 1.11%. Note, this is not conversions. That only accounts for the number of people who click on your ad, not those who buy!

Due to iOs14 updates, those numbers will only decline. People might debate how serious Apple is about privacy. Still, one thing is for sure, third-party apps such as Facebook can no longer track users as they used to, which means their reliability to reach custom audiences will continue to decline.

Now compare that to an average email open rate of 18% with a click-through rate of 2.6%. And those numbers are very moderate, in my opinion. With a bit of effort, brands can easily see 30–40%+ open rates.

I’ve had conversations with brands recently that are pivoting to a focus on retention rather than acquisition because of how unreliable the ad platforms are becoming. Sure, acquisition still has to be a part of your strategy, but it shouldn’t be your primary focus.

It’s cheaper to retain a customer than to gain a new one.

When I ran Hemp Daddy’s, a direct-to-consumer CBD brand, I grew it to a solid six figures annually. 70% of my customers were repeat customers, and 40% were long-term loyal customers.

Another reason to email for focusing on your direct-to-consumer channel is that the margins are better than selling in retail, which requires expensive distributors, brokers, sales reps, and trade spend.

When I ran Hemp Daddy’s, I had a 60% gross profit margin before factoring in marketing. After marketing spend and discounts, I averaged a 50% gross profit margin, allowing me to set aside another 10% to fund growth and still have 40% leftover to support payroll and operations.

Focusing on your D2C channel can provide your business with the extra cash it needs to grow its retail footprint or simply stay a lean and profitable D2C brand.

The bottom line is this. Selling online, when done right, is very profitable, and email marketing can be a significant part of that equation.

Another essential factor to consider when thinking about implementing email marketing is that you own your customer list. You are not relying on a larger company to create a favorable algorithm.

If Facebook or Instagram shut down tomorrow (or simply change their algorithm), your ability to reach your audience is gone. But when you own a list of email addresses, you will always have a group of people to market to.

Email Marketing Builds Relationships

This is an opportunity that shouldn’t be ignored.

Perhaps you have heard the phrase, “people buy from people they know, like, and trust.” But what does that mean?

Here is how I like to think about it. Customers are friends, not a statistic to be measured (although that is important).

Email is a great tool to build a real relationship with your customers. When I ran Hemp Daddy’s Therapeutics, I would email my list a few times a week and almost always share a story about something that actually happened to me, but I would tie it into how CBD can help in that situation.

For example. I frequently told the story about how I sold my previous business, how stressful it was, and how it impacted my sleep. I then transitioned into how CBD helped with the stress and getting good sleep.

I’m sure if you put in a bit of effort, you can think of similar stories to tell and then share how your product could benefit them in the same situation.

You should use email to tell stories and educate more than you sell. This strategy will keep customers opening your emails, excited to read them, and feeling like they know you personally.

I would frequently have friends (customers) email me saying how much they loved my emails, and some even expressed how they chose to buy from me because they felt like they knew me even though they could find similar products cheaper elsewhere.

Focus on Retention

I’ve mentioned this already, but focusing on retention is super important because ad costs will only rise, and algorithms will get more complex. One day Facebook will be gone, only to be replaced by another platform that you will have to learn.

When you focus on retention, you keep your existing customers.

Why spend money on ads only to break even? If you don’t have a retention plan to keep those customers coming back, you are doomed for failure. You can only spend so much money on ads before breaking even isn’t sustainable.

Effective email marketing is the absolute most effective way to increase the lifetime value of a customer.

The Quality of Your Emails Matter

Don’t bore or overly sell to your friends.

The average unsubscribe rate from an email list is 56% in the first 12 months of joining an email list.

Maybe you’ve heard the famous entrepreneur Gary Vaynerchuk say that every brand's responsibility is to be a media company. I used to think that meant you need to shoot videos like GoPro and RedBull, which is entirely unrealistic for a small brand.

The biggest takeaway you can get from that is, don’t be boring.

Entertain your friends. Share valuable information, educate about your product and industry, and be authentic. Every message you send shouldn’t be a promotion (which is what most brands do).

If you want to succeed in email marketing, don’t do what everybody else does. It would help if you were different, and being different means not being boring… entertain your new friends.

How often to send emails

Many people have the limiting belief that you should only email once a week at most. But that is a false and limiting view.

If somebody gave you their email, that means they want to hear from you.

Email marketer and copywriter Ben Settle emails his list EVERY DAY. Sometimes two or three times a day. I never unsubscribe though, because his emails are funny, engaging, and entertaining.

I experimented with daily email sends with my CBD brand, resulting in a 23% increase in revenue and loads of new loyal customers.