REthink Wine Blog

With hundreds of wine blogs, websites and social networking sites now concentrating on wine, one could spend an infinite amount of time trying to soak up all the wine information and intelligence needed to give you a head start and a foot up on the competition. It’s important to have a manageable collection of websites that can keep you informed and keep you learning about wine the industry without getting buried in information.

Here are a few of the resources we recommend to stay in touch with what’s happening in wine, while not getting buried:

Wine Business Monthly

This is a great site that is updated daily with articles, links to important news items, and links to blogs that focus on the wine industry. You just might want to make it your first stop on the Net on a daily basis. You can also sign up for their daily email of top news items here

Wines and Vines

Wines & Vines is America’s old trade publication for the wine industry, but nothing about it is old fashioned. The site is constantly updated with new articles and resources.

Wine and Spirits Daily

Daily Reporting on the wine and spirits market is this organization’s forte and they do it well - often breaking stories, offering analysis of important stories, conducting interviews with key industry figures and alerting readers to new research. You can go to their site daily or sign up for their daily email and have the info sent right to your inbox.

Wine News at Topix

This is an interesting aggregation site for both consumer and trade-oriented wine news. You are likely to find constantly changing articles culled from wine blogs, major wine websites, recently issued press releases and articles in major newspapers and magazines.

Inertia News

Of course, you can always keep up with the latest Inertia news by heading to our press page. There you’ll find links to recent announcements and press coverage of Inertia.

It has often been argued that the true value of social networking, whether in blogging, Facebook, consumer generated content, Twitter, or otherwise, lies in the transparency it brings between you and your audience.  That is especially true if your ultimate goal is in building long term relationships with your customers, partners, vendors, or employees.

As technologies that are now considered cutting-edge become main stream, and as Millennials, with their reputation for being fully connected and passionate, begin to overtake Baby Boomers and Gen X’ers in numbers, a tremendous opportunity presents itself in the form of Social Media.  Exactly how are Millennials staying connected?  Are they reading newspapers or are they reading blogs and other forms of Social Media?

For employees, partners, and customers alike, transparency provides clarity behind the direction of your company and your brand.  For employees, it’s a constant reminder of why they come to work each day.  For customers, it answers the all important question “Why should I stay”?

Web 2.0 has provided a fundamental shift in the way we communicate.  It allows for real people to connect with others – in vibrant and open discussions about what interests them most.  Gone are the days of hiding behind the corporate brand.  With transparency comes trust.  It is your opportunity to display your company’s human side and begin building a direct dialog with customers.

Developing a Social Media strategy means adapting to change and understanding that your brand is now in the hands of forces outside of your control, meaning it’s in the hands of your consumers.

As you begin to develop a Social Media strategy, there are several important principals to keep in mind:

• Know your audience:  Are they customers, employees, industry veterans, or colleagues?
• Give more than you receive:  Blogging is about the sharing of information.
• Always place the needs of your customers first.
• Admit when you’ve a mistake:  Your customers will respect you for it.
• Work with customers to improve your product and your brand.
• Don’t be afraid to show your weaknesses as well as your strengths.
• Reveal your true corporate identity: in the form of your product, your services, and your employees.

Social Media is a whole new ballgame.  If the goal is to display authenticity, you can’t address your audience through a corporate filter.  They want to know the real you.  This is your chance to talk openly and honestly with them.  It is the perfect opportunity to expose the people and the vision behind your name.

So, whether you’re just getting your feet wet by posting comments on blogs or on Facebook, or are diving right in and starting a blog of your own, the easiest places to start are in answering some of the following questions:

• What makes you proud to be sitting where you are today? 
• What is your story? 
• How about your winery’s story?
• Who are your customers and what motivates them?

Social media presents a tremendous opportunity to learn, both from the good news and the bad. 

From Jonathan Schwartz’s (CEO of Sun Microsystems) blog:   “Sunlight’s not just a great disinfectant, it’s a wonderful safety net, too - you can’t fix the problems you don’t know about. But once you know about a problem, even small attempts to help, multiplied over the long tail of the internet, can make an extraordinary difference.”

I’m relatively new to Inertia, having been here for about five months now.  My role is in fostering relationships with the many different types of vendors who share this space with us, with the ultimate goal of building a “partnership ecosphere” so to speak, one which will provide the most value to our clients.  And while I’m anxious to write about our plans regarding these operational partnerships, I thought I would write about a different sort of partnership today – the partnerships we’ve formed with our winery clients.

I’ve been involved in direct-to-consumer sales for many years now, and from what I’ve witnessed there are basically two different business models in use by winery direct sales platforms such as ours. 

The Investor Dictionary defines a business model as “the mechanism by which a business intends to generate revenue and profits.  It is a summary of how a company plans to serve its customers…….”  The way I see it, there are basically two models in use in this space:  1) a “Perpetual License” model, and 2) a “Value Creation” model.   The former involves a flat fee, while the latter involves a small share of revenue.  In looking at the rev share model, the provider or business partner doesn’t have a viable business UNLESS its clients grow direct revenues.   So while both models satisfy the first half of the definition above, in making that commitment to its clients, the rev share partner has gone much further in defining the latter half of the definition – developing a plan to serve its customers.

Let’s look first at the subscription or flat fee model.  In some instances they may build a website for you, in others they might simply host your shopping cart, charging a flat monthly fee in return.  Typically your contract will show different fees for services such as basic support.    Under this model, the focus is naturally on maximizing the number of websites which are turned out each month.  The model itself doesn’t provide incentive for the provider to work with existing clients to help them maximize revenue potential.

With a revenue share model, the focus by definition is on creating value.  I believe that this leads to the strongest possible relationship, one which is mutually rewarding and delivers an increase in creativity and high priority response times.   Since I’ve been with Inertia, I’ve had the opportunity to view the many ways in which we view our roles and responsibilities in terms of creating value for our winery partners, both in our current business model and in terms of our overall corporate vision.  While I won’t go into all in detail today, a few prime examples are:

Focus on quality not quantity:  We study best practices, usability, and conversion rates.  Each and every site is designed with one purpose in mind – selling wine.   Most importantly, as we develop the next generation of our platform, our focus is entirely on the ways in which we can leverage technology to connect our clients with demand, providing access to new markets and the opportunity for our winery partners to connect directly with both consumers and the trade, forging lasting relationships.

A passion for selling wine:  A perfect example of this is the Inertia blog and the enthusiasm with which our bloggers share their thoughts and tips for maximizing direct sales.  In addition to the blog, we offer quarterly workshops which focus on current trends in wine marketing, monthly newsletters loaded with useful tips, and a set of excellent training sessions.  In addition, our client development group is devoted to working with our existing client base to help maximize direct sales.

REthink Compliance:  Our free compliance tool is another great example of our overall vision at work.  By helping to remove the remaining barriers to direct sales and providing winery partners with access to an even broader marketplace, we enable them to tap into demand channels that were not available to them in the past.

As the web has matured, this is a problem that has become evident in many industries. And I believe it is especially relevant in the wine industry. Wine marketers are increasingly finding themselves in the position of working with fragmented pieces of information from several different technology vendors in developing and executing their marketing strategies. Consumers, on the other hand, are becoming more and more accustomed to the targeted and personalized attention they receive from some of the big box retailers who have made it their mission over the past several years to understand and master the art of multi-channel marketing. And so for wineries, the issue of reconciling several separate silos of information (POS, ecommerce, and wine club) has intensified at precisely the time consumers are raising the bar in terms of heightened expectations.

As a wine marketer, there are several factors which are of vital importance to you in developing a multi-channel marketing strategy:

• A clear understanding of your customer’s purchasing habits and wine preferences, regardless of channel
• An understanding of customer loyalty as it relates to club membership and longevity, order history and VIP status
• The ability to reach customers when and where they want to be reached, with information that is personal and relevant

The solution lies in your ability to capture all information regarding customer behavior in a format which is “actionable” for you as a marketer. I think Forrester Research has coined it best in explaining that the answer lies in the development of an “Online Marketing Suite”. And while the Forrester research involves primarily “interactive marketing” as it relates to a marketer’s ability to integrate the myriad of online marketing technologies available today (email, search marketing, analytics, and Web 2.0 technologies), there are two aspects of the “Online Marketing Suite” that are especially relevant for the wine industry. As Forrester explains, the “Suite” requires two core components:

1. “The central hub – the molten core of the suite that enables marketers to manage and integrate online data.” At Inertia, our philosophy is that all customer data should be available to you in the cloud for purposes of segmentation and targeted marketing, because this is precisely where the superior tools you need in order to reach your best customers are available. In developing a customer centric marketing strategy, we believe that you need a true 360 degree view of the customer in combination with advanced list management and email marketing capabilities. And from the customer perspective, a wine club member or customer making a purchase in the tasting room should be able to visit your website, login and view tracking information and complete order history, regardless of whether purchases were made in the tasting room, online, or as part of a club shipment. This is the approach we’ve taken with respect to point-of-sale integration and it is the reason we’ve worked hard to perfect our club and allocation packages. Of course, we believe in making the data available to your tasting room personnel as well, as this is a must in delivering exemplary customer service.
2. “The network – a thriving community of technology and service partners”. Again, I think Forrester is right on the mark here. All customers win when complimentary technology companies work in harmony, and to that end we’ve made it our mission to develop a vibrant partner ecosystem, one which we believe will significantly enhance value for our winery partners. By devoting resources to an expanded partner program, involving partners who are experts in their respective fields, we can continue to focus on our own core competencies, driving opportunity in terms of demand generation, CRM, and increased lifetime value of the customer.

We know that the ability to manage data from several different sources is a major challenge facing everyone in the industry. By partnering with companies whose business models share important synergies with our own, we hope to change all of that.

On Friday the wine industry lost an American icon.  Robert Mondavi is largely credited with putting California wines on the world’s radar screen as he worked tirelessly to educate a generation of Baby Boomers about the benefits of wine as part of a healthy lifestyle.  He believed in the marriage of food and wine and traveled extensively to feed his quest for knowledge on the subject.  “Wine to me is passion.  It’s family and friends.  It’s warmth of heart and generosity of spirit” he wrote in “Harvests of Joy:  How the Good Life Became Great Business.”

And that message found its way not only to the Baby Boomer and Gen X generations, but I think it continues to resonate with Millennials – today’s 21 to 30 year olds.  According to Nielsen Research, Millennials, also known as “The Next Great Generation,” are approaching Baby Boomers in sheer numbers (70 million compared to the 77 million Baby Boomers) and they outnumber Gen X’ers by nearly 25 million.  What I found interesting about the Nielsen Research study, which was published in November of 2007, is that this group perceives wine to be “relaxing” and “sophisticated”, opting for wine over other alcoholic beverages for more formal nights out.

Perhaps even more interesting is the fact that, probably largely due to the influence Robert Mondavi had on previous generations, this is the first generation in US history to have grown up with wine at the family dinner table.  And the resulting shift in preferences is evident in the numbers:  ten years ago beer accounted for 59% of this age group’s purchases in the alcoholic beverage category.  Today that number is twelve percentage points lower, while wine and spirits have increased in relative proportion.

As they are just now shaping their tastes, Millennials represent an enormous opportunity for wineries. 

The tasting room:
Remember that this group is just beginning to form opinions and that those opinions will be largely based on experience, experiences they are very likely to share with like-minded peers.   The tasting room is a perfect opportunity to begin building long-term relationships with the next generation by creating memorable visits through friendly conversation and enthusiastic sharing of knowledge.  And don’t forget to capture email addresses – Millennials are a “connected” group, far more so than any generation before them.

Online:
This is the generation of social media, and while it may be difficult to justify venturing into social networking simply because it doesn’t lend itself easily to results that are “measurable”, social media can be a great opportunity for branding and for engaging a whole new generation of wine consumers.  It may be a longer term endeavor, but it will ultimately translate into sales, and more importantly, into longer term relationships. 

As a whole, the 21 to 30 age group is unpretentious and hungry for knowledge, knowledge that they’re much more likely to seek out via Internet search and social networks than through wine books or ratings.  This is our opportunity to pay it forward and continue the education that Robert Mondavi started.

As it appears we’re moving closer and closer to a recession, one interesting fact has come to light:  the Internet continues to be one of the few areas where many multi-channel retailers are experiencing sales growth.   According to an article by Internet Retailer this month, the web currently accounts for only 10% of The Talbots Inc’s sales but accounted for 68% of sales growth in 2007.  Likewise for many other merchants – Staples, Circuit City and the Gap are three examples cited in the article.  Another interesting statistic mentioned – online spending by households with higher incomes grew more rapidly than households with lower income (this is according to comScore, Inc.).  Year over year growth in the over $100,000 category was 28%, while those in the $50,000 to $100,000 category spent 17% more than the previous year.  This is a statistic which is not lost on the wine industry.  And given the fact that margins are clearly higher for direct sales, I think this year, more than ever before, is a perfect year to concentrate on increasing direct sales.  With a down economy facing us, a secondary goal of course, is to protect against margin erosion as much as possible - which leads to the title of this post.  There are two free tools available today to help you increase online sales and protect against margin erosion.

Google Analytics

I know many people are intimidated by the mere thought of analytics, especially if math was not a favorite subject in school.  And if you’re one of those people, I would suggest taking a look at Google Analytics from a slightly different perspective.  When you get right down to it, all of the numbers and graphs you see are really designed for one purpose:  to give you a glimpse into human behavior.  To further simplify, there are really two things you are looking for in all of the numbers:  1) how are people arriving at your site, and 2) what are they doing once they get there?   Remember that each click you see in your Google Analytics statistics represents an actual human being.
How are people arriving at your site?  Look at specific keywords and search engines consumers are using to find you.  Then take a look at the pages they are landing on.  Are they finding what they’re looking for on those pages?  If not, what can you do to improve your landing pages and increase conversion rates?

What are they doing once they get there?  This is where the funnels available to you in Google Analytics become extremely interesting.  Where are customers leaving in the sales process?  After looking at your Google Analytics numbers, I always feel it is important to go back to the website and look at it through the eyes of your visitors.  Follow the same path you are seeing your own customers taking.  Why are they leaving when they do?  What changes can you make to those pages to encourage them to proceed to the next step?

Even the slightest change in conversion rates can be significant in terms of your top-line revenues.

Rethink Compliance™

As many of you know already, our REthink Compliance™ tool was released this past week to all US wineries, fulfillment houses, and compliance services.  And the response has been amazing.  As the tool is free to all, I can’t think of a better way to protect against margin erosion.  REthink Compliance™ greatly simplifies your direct shipment reporting for each state, meaning you have more time to devote to increasing those conversion rates.  So if you haven’t already done so, I would strongly encourage you to register and to sign up for a webinar to see exactly what the tool has to offer.

One of the primary effects of Web 2.0 on the wine industry and direct-to-consumer in general has been a gradual shift in the marketing mix from one that was more focused on traditional push marketing methods to one that places more of the emphasis on pull marketing.  If you think of push marketing as involving the more traditional methods of targeting the right demographic through paid advertising and email, pull marketing is aimed more at encouraging consumers to actively seek you out.  By nature, the focus with pull marketing is more on building your brand through blogs, user-generated reviews and syndication of your content.    It only goes to follow that consumers who have arrived at your site by way of positive reviews on an influential wine blog or after discovering your content on a favorite foodie site, will be more receptive to your push marketing efforts (permission based marketing as an example). 

But the sheer number of wine blogs, forums, and social media sites in and of itself presents a whole new challenge.  How do you monitor what is being said about your winery?   There are many benefits to be gained by listening to the conversation:  1) if you have a tasting room, you already understand the benefits of interacting with your customers on a daily basis.  Social media presents an opportunity for online interaction.  2) You’ll gain insights which can be used to increase the effectiveness of your traditional marketing methods, and 3) those same insights will allow you to improve your customer service.

One of the wine industry’s most effective marketing tools has always been recommendations – by friends and acquaintances, sommeliers, waiters, and more recently extending into the realm of wine bloggers.  Positive word of mouth, especially when coming from more influential sources, can have a tremendous impact on sales.  So how do you monitor 1) what’s being said, 2) who’s saying it, and 3) who’s listening to the conversation?  Depending on exactly what you’re looking for, there are a number of resources available.

• Google and Yahoo! Alerts provide real time email updates of relevant search results based on keywords you choose.
• Search blogs for mention of your company and set up an RSS feed via Google Blog Search.
• In a similar vein, track comments that are posted on blogs via co.mments.
• BlogPulse Conversation Tracker helps you to follow the entire conversation, showing not only the original post, but other bloggers referencing it in their own posts. And BlogPulse trends helps you monitor whether a specific keyword is experiencing an increase in mentions or not.
• Technorati is probably one of the best tools available for tracking social media sites. Set up an RSS feed for blog posts mentioning your company name.
• See if anyone is using your company name as a tag by using Keotag.
• Track posts on forums using Boardtracker.
• For a complete picture of brand perception and awareness, you might consider a paid subscription service that monitors all channels and presents the information in an easily actionable format such as Andiamo Systems.

Finally, what should you monitor?  Everything related to your wines, your winery, your winemaker and owners, and possibly the industry in general.  You may also want to watch select competitors to get a feeling for how they’re navigating the social media waters.