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Case Study: The success of The Vinyl Room online store
The Vinyl Room was established in 2009 to provide stylish designer wall decals that are a simple and effective way to decorate almost any interior space at home, in the office or at the bach. Since then the online shop that uses the Spinning Planet E-Commerce system has grown to be very successful so we asked it's owner Michaela James the secrets to her success.
Where did you get the idea for your online business?
The Vinyl Room began through researching overseas online businesses and found a niche in the market that was needed here in New Zealand. The Vinyl Room's main target market is females, home owners, then corporates.
What type of marketing do you use?
Michaela chose to use a media agency to promote The Vinyl Room because it works out as a more cost effective way to spend money. A media agency knows which media are best suited for your target market and can spend your advertising dollar more wisely. Though The Vinyl Room uses Internet marketing such as SEO and Google AdWords it reaches much of it's target market through print media such as magazines. To reach females and home owners Michala uses Home and Garden magazine which has been very successful. For the corporate market Michaela uses Kia Ora magazine that can be found on Air New Zealand flights. This strategy has worked because Kia Ora is read by regular travellers which are often corporate workers.The Vinyl Room also gains publicity through PR, feature articles and write-ups. Click here to see the articles.
What sales/promotion techniques do you use?
Print media is purely used for brand recognition and to entice readers to visit the website. For promotions like "give-aways", "buy one get one free", "Christmas Gift Ideas", "Birthday Sales", etc. Michala uses online marketing such as Facebook, E-Newsletters and promotions on the website.
How many marketing campaigns do you have running at the same time?
No promotion is run at the same time. This gives Michaela a good indication of how successful the campaign is and how successful the advertising channel was.
How did you initially get people to the site?
Extensive marketing was used pushing people to the website. All sales earned in the first year were spent on marketing building the brand recognition amongst the target markets. Of course many businesses can't afford to spend that much on advertising but what it shows is that marketing for an online store shouldn't be an after thought; it's essential. Marketing is crucial to your online shop's success.
How much should you spend on marketing?
Though we can't reveal how much Michaela spends on advertising it's pretty easy to work out that it's considerable because The Vinyl Room is in prestigeous magazines and allocates a large amout of profit to marketing such as magazines, website, adwords, e-newsletters, etc. Here's a couple of good ways to work out how much budget you should allocate to marketing:
- If you're looking to sell your business or grow as quickly as possible spend as much as you can on advertising because your business worth and growth is directly related to sales and marketing.
- If you want to know how much to spend annually for a business you want to keep then a common budget is at least 5% of sales. So for every $100,000 of sales you should be allocating at least $5,000 for marketing.
- At the very least you should optimise your website for Search Engines.
Do you measure your marketing?
When consumers purchase online there is a "drop-box" that asks customers how they heard about The Vinyl Room. This makes it really easy for Michaela to determine which advertising media are most successful. Michaela is also able to measure by increase in sales after easch advertising campaign.
What is your most successful marketing channel?
Your Home and Garden magazine has been the most successful marketing channel for the Vinyl Room largely because it's a widely read magazine by home owners and women. This mirrors Spinning Planet's market research. Some businesses do very well with offline advertising such as magazines, radio, flyers, etc. whilst others do better through online media such as e-newsletters or Google adwords or business networking such as jopining local Chamber of COmmerce and other groups.
Conclusion
As can be shown by the The Vinyl Room online shop experience:
- Start with a good business idea for your online shop.
- Marketing is essential to your online business success.
- Seek professional marketing advice because it can save you time and thousands of dollars.
- If you can measure your marketing you can spend your marketing dollar more wisely.
- Allocate a budget for marketing.
A big thankyou to Michaela. We know that many of our readers will learn a lot from The Vinyl Room experience.
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Brynn