Trouble in Paradise?

Across the wine country, there are whispers of trouble in Wine Club Paradise. Do any of these trends sound familiar?

• Average club tenure of shorter and shorter duration
• Increasing cancellations year over year
• Slowing customer sign-ups, especially at the higher volume clubs
• Unexpected spikes in credit card declines, with fewer re-instates
• Wine club shipment needs drive the number and kinds of wines made each year

For far too long, our industry has used the "Wine Club" as a proxy for true customer relationships. If a customer is in one of our wine clubs, then they are a top customer. If not, well then, we send them a blast email offer (if we even collected their contact information) ... and hope for the best.

Over the last several years, the proliferation of wine clubs (thousands across almost every winery, countless media organizations and many high end retailers) means that consumers are barraged with options for wine shipments. How is one winery, with only one or two brands expected to compete?

The answer is simple: wine clubs will continue to be of interest to consumers--but their main purpose can't be viewed in purely mercenary terms. A club is not there "just to increase sales volume" or get rid of extra inventory. They provide a great opportunity to stay connected with your customers, but will only work well if treated thoughtfully-one tool among many needed to build lasting customer relationships.

STANDING OUT FROM THE CROWD

Sell the wine AND the Experience.
Excellent, not just adequate, customer service

The hospitality industry knows that superb service is everything to the customer's brand perception; especially their first impression. In the wine industry, we need to remember that most of us are really in the hospitality business, even if we are lucky enough to be selling a scarce luxury wine. We must deliver a near flawless customer experience from the very first if we expect the customer to be "sold" for the long run.

Great Wines (OF COURSE!)

Quality is a given. Winemaking in this country and around the world has improved dramatically, at all price points. The consumer’s expectations have risen as well.

Be honest, are you offering visitors something more than great wine that stands out from the thousands of other wineries? Are you known for an "edutainment session" or some other offering that truly transcends the everyday?

(Please take note: Concierges at luxury wine country resorts tell me that barrel tastings, blending seminars and vineyard tours are a dime a dozen. Even hot air balloon rides with a wine tasting are offered widely. Please send them unique offerings, well executed, so they can refer their best customers with confidence.)

For examples of wineries stepping out of the mainstream, look at Raymond Vineyards very different tasting room options. In the digital world, simple edutainment examples include Ridge Winery's aerial vineyard tour and Buena Vista Winery's historical timeline. Find ways to stand out from the crowd while remaining true to your brand essence.

SUSTAIN THE RELATIONSHIP:

Give customers choice - especially higher end customers.

Consumers have choice in almost every other transaction in life, so why not in their wine shipments? The power of choice is important, even if the customer elects to never exercise this choice. Yes this increases complexity, but with a sound operational strategy and robust behind the scenes technology it is possible. At a minimum, be sure to offer customization to your very best, higher value customers.

Price wine fairly to longer term customers.

Of course we don't want to compete on price, especially if we have invested a lot in the wine experience. That said, consumers are digitally connected all the time. They know they are being gouged when wines in their shipment are easily available somewhere else for less. This destroys direct relationships quickly. Take the extra time in product planning each year to make sure that most of the wines sold direct are unique and that your pricing strategy is thoughtful across wholesale partners and every direct channel

Delight the customer, one shipment at a time.

Each shipment is an opportunity to connect with your customers tangibly-are you taking advantage of what goes in the box? Everyone sends wine and a newsletter; leverage this customer touch further by delighting your customers with some small surprise they can look forward to each time. Consider a food wine pairing wheel featuring your wines, over sized picture postcards portraying your vineyards in the current season, random "golden tickets" which, if found in the box by a customer, entitles them to a private dinner with the winemaker. The options are limitless-choose ideas that are core to your brand and differentiate you from all the other wine club offerings out there.

EXPAND CUSTOMER RELATIONSHIPS AND SALES BEYOND THE CLUB:

Know Your Customers

The customer list is one of a winery's most important financial assets; just as important as the vineyards or the wine inventory. Why then do most of us treat the customer list as a mere communication and contact tool? Why do we forget to ask the customer what THEY want?

• Collect and securely store customer information from interactions online, in the tasting room or at events-even those customers that don't join the club.
• Annually, do an RFM (Recency, Frequency and Monetary) analysis of the entire customer base.
• Once you know the present "value" of your customers, you can create basic value tiers and change your marketing investment and sales/service strategy accordingly.
• Consider investigating the potential value of your customers so that you can also put actions in place to discover and nurture these hidden relationships. Use this knowledge to find new customers that match the profile of your most valuable customers.
• Survey your customers to see what they want and don't want from the wine club. The answers might surprise you.

Build an integrated DTC & Marketing Action Plan across People, Process and Technology

Is your winery guilty of launching just in time OTC offers or last minute wine club shipment planning? Are customer communications always a fire drill? Are you always fighting with your technology systems to achieve your goals?

• Plan your OTC actions and offers across all channels for the year-make sure that product and pricing and offers are well aligned across every customer touch point. Customers are smart-they sense the chaos when the message and the wines delivered are not in harmony.

• Set goals for each channel and every program-then translate into goals for each of the people on your team. Measure their success. Use the results to help prioritize your efforts for the next year. When your initiatives and players are tied to both financial success and customer success (attracting, retaining and selling more to customers) - OTC is better aligned with the overall business of wine. This will ensure better support from your leadership----and additional investment when needed.

• Make sure your technology supports, but does not dictate, your customer strategy. Given the many technology players present in the wine industry today (and even within each winery) this can be challenging-but very possible. Start by better leveraging the current systems and adopting a plan to evolve your technology capabilities over time.

The wine club product is alive and well-if managed artfully. The real opportunity for our industry, however, lies well beyond the wine club. Differentiate your product and service offerings, coordinate people, processes and technology across channels and focus on your customer at all stages of the relationship. The sales will follow-both inside and outside the club.

MJ Dale, Founder