Case History: Celestial Seasonings Brews An E-Zine

Can an e-newsletter be viewed as a detriment by loyal customers? That was the question Celestial Seasonings struggled with when it considered launching an e-zine for its popular tea.

The firm, which has always had a conservative communications policy, wondered whether its customers would be receptive to receiving e-mails, says Eric Anderson, director of agency services for White Horse, the vendor in charge of the effort.

But White Horse presented Celestial Seasonings with case studies and tea drinker behavior data suggesting that the newsletter could be a viable selling tool. Once the green light was given, the company asked customers for their ideas.

“We suggested making the newsletter sign-up a two-way street,” Anderson explains. “When a subscriber opts in, we have them tell us what they want from the newsletter, what they’d like to read about and how frequently they’d like to receive it.”

The result was that Celestial Seasonings had a product with what its customers requested via the survey process. And the company felt comfortable that the e-zine, which was launched in December 2003, would not hurt the brand.

The surveys and online communications did lead to some changes in the original blueprint for the newsletter, including shifts in the types of products featured.

“We learned that online customers were interested in more variety,” Anderson says. “There are behavioral differences between those who go to a tea Web site and those who go to the store and pick up tea. The individual who goes to a store will pick up the same kind of tea all the time. The online customer is a great prospect for new teas and will buy those teas online.”

And, although it was never a goal of Celestial Seasonings to sell teas online, the e-zine has spurred brisk sales.

“It turned out to be a revenue channel that was never intended to be one,” Anderson continues. “What evolved was that we started using the e-newsletter as a test market for rolling out new teas and to feature harder to find teas – those specialized brands that aren’t carried everywhere.”

The Celestial Seasonings Newsletter is sent between eight and times a year to 60,000 subscribers (up from the initial list of 12,000). Approximately 8,000 to 12,000 names are added each time a sweepstake is run. Subscribers from the Web site average a few hundred monthly.

Open rates average 38% with click throughs at 22.8%. Unsubscribes average at .13%. No conversion data has been collected.

Initially, Celestial Seasonings had concerns over the amount and type of content, but no more. The newsletter includes health-related articles and recipes, and also highlights teas new products and seasonal teas.

“We dovetail the health benefit with the tea highlighted in that newsletter,” Anderson says. “We learned through our surveys that customers were interested in using the newsletter as a first-to-know vehicle.”

Additionally, the rich Celestial Seasoning artwork found on tea packages is used on the newsletter, creating a more attractive newsletter and a bond between the tea packages and the newsletter.

New subscribers are added by online sweepstakes run on the Celestial Seasonings Web site once or twice a year. Although tea packages do have the Web URL, there are no promotions for the e-newsletter on tea packages.

“If you have a sufficient number of new users on the site, you’ll get increased signup,” Anderson says.

There has also been some experimentation with list rentals that send sweepstake invitations to a third party if it fits their profile.

The company also uses co-promotions that yield access to subscriber lists “On a cost-per-subscription basis, the co-promotion tends to work best because you’re accessing a list without the cost and sharing promotion costs,” says Anderson. In the future he hopes to reach outside the brand in terms of co-promotions to take advantage of affinities.

“Tea drinkers also tend to use spas,” he says. “So you can do a co-promotion with a high-end spa company. Those are good ways of extending the brand and getting the word out.”

Anderson admits that there have been no “concrete” measurements of the e-newsletter’s success since no hard data has been accumulated. But he feels that the core objective of increasing and supporting brand loyalty has been met. “The company is receiving good brand recognition and low unsubscribe rates,” he says. And while brand may be hard to qualify, “high click-through rates, sales and happy customers are an indication of success,” he adds.