REthink Wine Blog

During uncertain economic times, management discipline becomes increasingly important. Following are a number of leadership Do’s and Don’ts quoted from Deborah Steinthal and Ellen Hunt of Scion Advisors that I think others may benefit from.

DO….

• Drive with your eyes up: Use scenario planning to narrow the gap between your plan and the realities of execution in today’s environment.
• Look for opportunity: You may be able to attract A-players who might not be available in a booming economy.
• Demand top performance: Instill more financial discipline, set specific measurable goals and hold your team more accountable.
• ID critical decisions that can result in biggest win or biggest pain. Leverage your trusted sounding board to drive a more thorough, robust problem-solving process.
• Ramp up branding: Focus spending on where you get the most returns.
• Increase visibility in your top markets. Offer top customers a relevant experience.
• Prune your portfolio: Jettison unprofitable wines and lines of business.

DON’T…

• “… be arbitrary in your decision making.” - Tom Klein, Rodney Strong
• “… postpone critical investments essential to long term goals.” – Bruce Cakebread, Cakebread Cellars
  
• “… take your key customers and supporters for granted.” - Larry Maguire, Far Niente
• “… cut back on anything that lessens your customer experience.” – Jean Arnold, Hanzell Vineyards

I was encouraged by how many of these exercises we are currently undergoing at Inertia: emphasizing planning, goal-setting and measurements; creating leapfrog opportunities; focused decision-making; attending to how we are seen in the market; and concentrating on delivering what our clients need.

As you evaluate whether you have these “do’s” and “don’ts” in action, there are a number of ways we (or the advisors at Scion) can help – annual planning, setting key metrics, serving as a sounding board for your direct sales and marketing efforts, and strategizing for how to effectively target your best customers.

And as we plan the next releases of our products, there is a significant way that you can help us. Please continue to let us know how we can enhance the REthink Engine and REthinkCompliance.com to help you with your management goals.

Everyone likes a good promotion. Wineries like them because they increase sales and consumer exposure. Customers, well, need I explain why customers like them? But, what is less clear is how wineries should make decisions about promotions: when should they run them? in which channels? using what promotion tactics (i.e., price cuts vs. shipping discounts vs. group discounts vs. general wine blasts, etc.)?

Well, like any other sound business decision, choices about promotions should be made based on the return on your investment, or “ROI” as we like to say in the biz. Meaning, the key to a successful promotion is getting the most bang for your buck—or, in marketing lingo, the most lift for your promotion costs.

And what is lift, you may ask? Well, “lift” is the incremental volume you achieve from running a promotion above the volume you would have sold without running the promotion, or “above your baseline”. Next, what are the promotion costs? Those are all the opportunity costs of the promotion: the cost of sending out a mailing or generating an email campaign; the cost of taking a per-bottle revenue hit when you offer a price discount, etc. Importantly, these costs generally apply to every bottle of wine you sell (i.e., baseline volume and lift volume), not just the lift volume.

So why is this ROI or “lift per cost” perspective so powerful? Because the key to promotions is that they generally do have big opportunity costs. In the case of a traditional sale, you have to sell all your wine at the lower cost, even that baseline volume of wine that customers would have purchased even without the sale price. So, the lift the promotion gains better be large enough to outweigh that opportunity cost, or you will lose money on the promotion. The ROI metric captures just that.

After you begin to measure ROI, you can use it to evaluate the performance of all your different promotions– across all your different channels and promotion tactics. Then you can run only the types of promotions that have the highest ROI. And that is the simple way to get the most bang for your buck.

As you’ve read here and in the press, we are about to launch our free compliance tool. The collective work of keen legal minds, astute developers, dedicated quality control engineers, and a visionary leader is about to come into your hands. Later next week, you can expect the unveiling!

Upon launch of our beta product, you will see a new interface at REthinkCompliance.com. This page will serve as the entry page to your personal version of the tool.

You can indicate your interest in participating in our beta program by sending an inquiry from the site. So not only is the tool free, you can help shape it! We will open up our beta next week with the express purpose of gaining feedback from the real world (no, not that one, although it might be more fun). We have plans to continually make improvements over the next several months and we’d love to hear from you. In fact, we need to hear from you. So please keep an eye out and join us soon!

Much has been said about the importance of the content on your website, including here on the IBG blog. In fact, this will be a significant topic at our annual Symposium later this week. Personally, I am challenged by the notion of keeping up with the pace of the web and keeping content fresh enough. So I went looking for inspiration.

A terrific resource is A List Apart, a site focused on all things content. The particular article I’m referring to offers 10 tips to help you write for the “Living Web” (the part of the web that is always changing). Reading through it, I thought of a couple of winery websites that do a number of things quite well.

For instance, Green Truck Cellars is a terrific illustration of Tip #1, Write For A Reason. I was enthralled with Kent Fortner’s story and read the entire site the first time I visited.

Jeff Stai at Twisted Oak offers a great example of incorporating a blog onto the winery site and providing new content frequently, Tip #2.

I can even argue that Naughty Cellars presents an example of Tip #8, Be Sexy!

Curious now?

In Greece, two things are sacred - good wine and good olive oil. Okay, there are many more things sacred and there are situations where we don’t always care about the quality, but I’m sticking with the basic premise. Both go back to ancient times and the gods: Dionysus made quite a name for himself and Athena had a city named after her as a direct result of introducing the locals to the wonders of the olive tree.

In my family, we made both olive oil and wine. In true Greek fashion, we shared our bounty with all guests and visitors. My mom cooked for strangers and friends alike, while my step-dad poured freely. The things is, we kept the really good stuff to ourselves. You had to really rate in the family to merit the wine from the barrel in the back, or to get the particularly golden oil in your salad. It occurs to me that wine clubs and allocated wines work in much the same fashion.

I recently went to visit Arista Winery and tasted some wines that were not available for sale. I was instantly hooked and put my name on their mailing list so that I would eventually have the opportunity to buy some of their Pinot Noir. I had to be “in the family” to get the really good stuff. Similarly, most wineries will make special wines available only to wine club members. Not only do you get your regular shipments, but you learn about wines not generally available to the public.

If you are not a member of your favorite winery’s club, you might consider asking about it. You typically will get discounts, invitations to special events, great wine periodically shipped to your door without having to think about it, and “in crowd” status granting you access to the fantastic stuff in the back.

One more thing - Happy Birthday Mom! Thanks for the life lessons on the joys of sharing great food and wine with friends, preferably along with some good music by the beach!

I love and appreciate fine dining. I also enjoy a really good bottle of wine. Toss in terrific and engaging company plus a friendly, knowledgeable, and skilled server and I’m having a fantastic time!

I recently received my first Mamacork wine club shipment. This club sends wine from a different boutique winery each month so it’s a great way to learn about wines that are new to me. I chose one of the bottles and headed to a favorite restaurant in Berkeley.

Over dinner, I was having a wonderful time and was in a great mood so on a whim I invited our beautifully French-accented server over to the table. I asked him if he’d like to try some of our 2004 Dutcher Crossing Taylor Reserve Zinfandel. He eagerly accepted and poured himself a taste. I got so much enjoyment out of watching his eyes light up and hearing him say ”Ooh, that’s good! Do you mind if I have my manager try it?” Of course!

I jotted down the wine details on my business card, along with some information about how the restaurant can connect directly with the winery via our Direct to Trade initiative.

Then came the nice surprise – he brought over the bill and discreetly mentioned that he waived their rather hefty corkage fee. Excellent!

So in the spirit of spontaneity, goodwill, and sharing, at the very least I received an unexpected break on my bill and enjoyed a terrific and memorable exchange with a stranger. And who knows? Maybe Dutcher Crossing will get some additional business or recognition. I can’t wait for next month’s club shipment!

Last night we released a significant upgrade to our REthink Engine. This milestone had me thinking about a couple of things. First, I pondered the concept of teamwork, or lots of people contributing toward a common goal.

This particular release was a result of the combined effort of more people than ever for IBG. The team included our hardworking and talented technical group, our Account Managers serving as client advocates, our dedicated and thorough Client Support Services team who provided so much every step of the way, our new QA manager, executives, and especially important were our clients.

Thanks in particular to those who participated in our Wine Club symposium including clients from Russian Hill, Titus, Vino Con Brio, Bourassa, as well as the numerous clients who sent in ideas and requests. We all appreciate your investment in the strength of our products. Please keep the ideas flowing!

This was a tremendous display of classic team principles – sliding over for weak-side help (yes, I’m caught up in the NBA playoffs), or more simply pitching in anywhere help was needed; making everyone on your team better as the great players do; focusing on the good of the team and on achieving the end-goal. I’m very proud to be a member of this team.

That end-goal was the other thing I’ve been mulling over. I was thinking about tools. On Wikipedia, a tool is defined as: “… a piece of equipment which typically provides a mechanical advantage in accomplishing a physical task. The most basic tools are simple machines.”

Essentially, we set out to build a killer tool. Our clients can get their work done manually (or “physically”), but we want to provide them with a tool/machine that really gives them an advantage. A huge advantage! That’s our goal in everything we do. This team intends to continually provide software and services that put our clients ahead of the game in all things Direct.

Since my very first interview with Inertia Beverage Group, I understood that decision-making here is based on some very simple yet powerful principles: Will it make our clients money? Will it save them time?

Of course saving time also saves money, I’m mostly talking about creating efficiencies. This can lead to basic cost-savings, room for new or expanded projects, increased creativity, peace of mind, or however else the client wishes to capitalize on streamlined processes. Many forms of measurement are possible.

Certainly other factors come into play as we make our plans, yet those two questions arise again and again. Most prominently, when evaluating enhancements for our software upgrades, those are the primary considerations. We are currently developing our next release, largely made up of enhancement requests gathered from clients directly or by way of roundtable discussions, our support team or account managers.

The following chart illustrates how the dozens of items that made it into the upgrade fall into the 2 significant categories, plus some administrative tasks:

I’ve found it extremely helpful to have a few significant principles to measure against, at work and at home. For us at IBG in pursuit of our mission to create powerful and effective customer-centric software, we’ve chosen our business values. What are yours?

At IBG we use the word ‘partnership’ frequently. The most obvious occurrence of the word comes from our business development team which has a host of partnerships in place or in the works in an effort to bring more opportunities for our clients to increase their direct sales channel.

A more unique application of the word comes when we refer to our winery partners. We talk about our clients in such a way since we do consider our relationship to be a partnership in selling direct and in building and enhancing our own offering.

I recently got to see this dynamic at work with some terrific results. Michael Coffey, one of our Account Managers, hosted a wine club symposium. He invited several of our wine club clients from different types of wineries to get together and talk about the challenges of running their clubs and how our tools help, as well as where they can be improved. Ideas were shared and we gained invaluable insights which will inform our next significant software upgrade.

Additionally, as one particular idea was tossed out and discussed during the session, those of us participating from IBG all took note and immediately determined that we wanted to address the enhancement sooner rather than later. Our technical team worked hard to sneak in the item into the release that we had coming out in just a few days. We hope that the feature makes the next club runs for many of our winery partners just a little bit smoother.

I want to thank those who attended and generously gave their time and shared their experiences in the spirit of cooperation and true partnership: Ed Gomez from Russian Hill, Emily Barouch at Titus Vineyards, Anne Matson from Vino Con Brio, and Tristan Fairbanks of Bourassa Vineyards.

Also, my thanks go out to the many clients who were unable to join us but who took the time to send in their thoughts and requests ahead of time. I appreciate all our partners’ on-going participation and sense of ownership of what we are creating together. Please keep the ideas coming!

In the past few months, we’ve done quite a bit of growing here at IBG and there’s more coming. In turn, our technical and product development teams have been planning extensively and our company as a whole has been concentrating a lot of energy on our internal communications and systems to learn how to work effectively as we expand. Now it’s time to take a cue from our account management and support teams to refocus our attention on who got us here – our winery partners.

We will be announcing various tools and methods geared at collecting our client’s feedback, but in the meantime we’ll go old-school. I’ll simply ask you: For users of our ReThink Engine, what do you like; what would you like to see improved; what do you want added? For those of you seeking a system to help you sell direct, what specifically are you looking for?

This year we will make significant enhancements to our suite of tools. Each improvement is aimed at helping our clients sell more and save more. I believe that the best way to accomplish that is to solicit the opinion of those closest to the challenges inherent in meeting those goals and collaborate with them to devise solutions that address real needs.

For our winery partners, there are several ways to make your needs known. You can talk to me, to your account manager, or to our Client Support Services team. I will also be reaching out to many of you over the couple of weeks as we plan for our next set of enhancements. I look forward to the opportunity to brainstorm with you!