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Melting the Chocolate Market
Brief
Deliciously seductive and seriously decadent, Hotel Chocolat has been on a mission to bring high quality chocolate to the UK for over ten years. First by catalogue and tasting clubs, then with a cutting edge website and now with 33 high street shops. The company has seen tremendous growth over a short period of three years and is the nation’s fastest growing chocolate retailer. In late 2007 it also launched in the US with a fully functioning e-tail site.
Hotel Chocolat takes great pride in its chocolate. From the growth of cocoa at its St Lucia plantation, The Rabot Estate, to the clear and unwavering ethical work policies in Ghana, Hotel Chocolat ensures that only the best will do for its product and the end consumer. This passion to rejuvenate the cocoa growing industry through ethical practices, no nonsense chocolate production and a keen eye for originality and innovation has earned Hotel Chocolat the titles, number one in The Times ‘Fast Track 100’, Retail Week ‘Emerging Retailer of the Year’ and one of the UK’s prestigious ‘Cool Brands’ for 2007.
Ambergreen has worked in partnership with Hotel Chocolat for three years to help it open up its online market. The first two years of the strategy saw Hotel Chocolat’s revenue increase by 720%, while keeping customer acquisition costs 50% below target. Over these two years the campaign was successfully run on a campaign to campaign basis.
More so than in any other form of marketing the pace of change in online is swift. In 2008 Ambergreen had to assess the market and develop pay per click (PPC) and natural search strategies that were both relevant to the change in marketing and retail environments as well as achievable based on the targets set by Hotel Chocolat for revenue and ROI.
Strategy
The chocolate market is fiercely competitive, dominated by major brands like Thorntons and Godiva, and sharply focused on four key periods of intense activity around Christmas, Valentine’s Day, Mother’s Day and Easter.
One of the key challenges Ambergreen faced moving from 2007 into 2008 was the speed and strength at which the Hotel Chocolat campaign had to be implemented and sustained over the critical sales period across these key periods. In addition, the campaigns needed to be run concurrently to ensure that each had maximum exposure in the market place over a sustained period of time.
Working closely with Hotel Chocolat, Ambergreen had to develop the PPC and natural search campaigns in such a way that encompassed the core brand values of originality, innovation and ethics whilst complementing offline marketing activity such as direct mail. This was key to ensuring that the consumer received a coherent and relevant message at each touch point.
The overall objectives of the campaign were to increase sales year on year and maintain a high position on search engines despite seasonal fluctuations. This was to be achieved whilst keeping customer acquisition costs to a minimum and maintaining a strong return on investment of 7:1.
Matthew Keys, Commercial Development Executive Online at Hotel Chocolat comments:
“For 2008 we approached Ambergreen with the key objective to improve year on year sales performance via PPC and natural search. An additional requirement was for Ambergreen to enhance the existing ROI and to make our budget work harder for us. With their proven SEO expertise, and knowledge of our business and core brand values we were confident that Ambergreen would develop an innovative tailor-made strategy that would help us achieve our ambitious goals.”
Execution
In 2008 Ambergreen revitalised its PPC and natural search strategies for Hotel Chocolat to ensure that it was one step ahead of the competition. This was imperative if the year on year performance was to be achieved and the return on investment met.
Working closely with Hotel Chocolat, Ambergreen developed a cutting edge strategy for both PPC and natural search that complimented each other, the offline strategy and demonstrated the brand values.
Ambergreen’s strategy began with a focus on campaign re-structuring and building correlation between the seasonal campaigns. From here, both the PPC and natural search campaigns were developed to maximise opportunities in the market and be pro-active rather than reactive in the competitive marketplace.
With PPC, the strategy focused on creative and relevant adcopy development and timely implementation, making sure that the core brand values were reflected. With natural search, the focus of the strategy was to increase exposure through targeted keywords, internal and external linking and the use of new techniques including images and social media. Each of these elements demonstrated originality and innovation in their implementation.
Implementing all the recommendations made by Ambergreen, the Hotel Chocolat site was fully optimised to generate sales through as many routes as possible.
With Easter falling early in 2008, the timing of the four campaigns was even tighter than usual and speed and accuracy was critical. Ambergreen revised the campaign structure to fit with the seasonal timings and make sure that each campaign had sufficient time online to generate results higher than the set targets. This also meant running campaigns concurrently and ensuring that traffic did not dip.
Ambergreen Account Manager Nicola Flory comments: “The strategy development and good old fashioned hard work were key to the success of this year. The balancing act between campaign timings and improving performance was tough, but the results really prove that a sound strategy and demonstration of the core brand values makes such a difference! We’re delighted with the results and building on these going into 2009.”
Results
The power of the strategy was instant and collectively both PPC and natural search moved from nowhere to being number one on the first page for many key terms.
Unusually for natural search campaigns the speed with which each campaign showed results was exceptional. Both Valentine’s and Christmas campaigns saw growth within two weeks and overall the number of visits to the site for natural search increased by 53%.
With the PPC campaign, the key performance indicators saw an equally impressive increase. Impressions rose by 45%, clicks by 16% and this with a reduction in spend of 19.5% year on year, showing that the strategy really did make the budget work harder.
Overall both the natural search campaigns and PPC campaigns performed outstandingly. On average, revenue that was driven by natural search increased by 36% year on year, with PPC seeing a massive improvement of 24% year on year in terms of revenue generation.
Conversion rates were also very encouraging with a 27% increase for PPC and a 64% increase on natural search year on year.
The campaign maintained a high ROI averaging 7:1 throughout the year but during peak seasonal times such as Christmas, the ROI rose to 10:2. In a highly competitive market and in the current economic climate this is a significant achievement born out of continual daily optimisation and close working relations between Ambergreen and Hotel Chocolat.
Ian Duncan, Head of Search at Ambergreen comments: “Ambergreen’s commitment to search allowed us to create a cutting edge strategy that helped Hotel Chocolat’s online results grow year on year by a significant amount. We will be looking to build on this success in 2009 with a bespoke strategy that will meet the demands of a challenging market and continue to reflect the core brand values”.
Matthew Keys, Commercial Development Executive Online at Hotel Chocolat comments: “Having developed and implemented a highly efficient customised search strategy, Ambergreen exceeded all sales objectives and ROI goals in 2008. Ambergreen’s knowledge, expertise and proactive approach was instrumental in helping us meet our overall online objectives. Their ability to adapt quickly to changing market conditions and to recognize fresh new opportunities means that sales from our search channels continue to grow, in absolute and relative terms, whilst becoming increasingly efficient. We’re looking forward to continuing our partnership with Ambergreen and building on the success of last year despite the difficult forecasted conditions in 2009.”
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