REthink Wine Blog

Yesterday Inertia hosted another successful seminar at Copia. The topic of the day was ”How to Build and manage a Successful Allocation Program“. The attendance, content, and reception by the audience, exceeded our expectations.

Over 30 wineries were represented in the audience, nearly all were not current clients of ours. This is the first open workshop which we have hosted specifically for non-clients. We regularly host workshops and webinars for our client base, but have recently begun to open the doors to the broader wine industry.  We plan top hold more of these open workshops on a regular basis (topics may include Web Site Sales Strategies, Wine Club Program Management, Selling Direct to Trade and Compliance Management, among others). Stay tuned.

The seminar started with Dan Chapin from Inertia reviewing the “3 Principles of a Successful Release Model“. Dan reviewed the need for any winery considering an allocation program to focus on Exclusivity, Creating a Perception of Scarcity and Conditioning of Purchase Behavior. For more information, or to receive a copy of his presentation, email us at sales@inertiabev.com.

Susan Moore from Aptalent, then spoke on “The Care and Feeding of your Mailing List“. Susan discussed ways to reach key consumers, how to grow your customer list, and how to maintain your engagement with those new customers to help build loyalty and longevity in their engagement with your winery. For more information, email susan@aptalent.com.

The next speaker was Jennie Haug from Revana Family Vineyards.  Jenny is an enthusiastic and engaging speaker. She brought a great case study of how Revana switched from a simple mailing list model, to an allocation model this past spring; they ran their very first allocation release this April.  Jenny told of the learnings Revana
gained from managing their first release, and provided the audience with some of the implications she’s now bringing to their next planned release. For more information, email jennie@revanawine.com.

After Jenny, Barry Waite and Steve Gant from Vintrust led an engaging discussion on the importance of the packaging and presentation of any fine wine at the final stage in their path to the consumer. Most specifically, they addressed the different packaging options for shipping wine direct to the consumer, and how those packaging options are a part of the entire brand building process for any winery. The discussion generated several questions, and initiated good conversation.

 

The final speaker was Harry Parsley, owner of Silver Stag winery.  Harry has deep experience in the wine industry, starting with being the wine buyer for Lucky Stores, then President of Buena Vista, and now owning his own winery.  Harry gave great information to the group on how to manage your trade relations. He engaged the audience with his entertaining and informal discussion style - bringing years of experience in both buying and selling wines to the audience.

We look forward to bringing more of these seminars to the industry - and hope to see you there in the future!

Let us show you how to maximize this opportunity with reduced costs and higher margins.

The most successful wineries maintain three basic principles that make for a successful direct sales strategy and successful allocation; Inertia is hosting your personal introduction to  cutting edge technology that includes a best of breed allocation platform and NO CHARGE for compliance.  We will share with you how we can improve your current level of service to your clientele,  save you valuable time and improve efficiency.

We cordially invite you to be our guest, June 10th, 2008 at Copia in Napa. We’ve brought in top talent to give you best practices and tips of the trade that you can implement immediately.

  

Looking forward to seeing you on June 10th!

RSVP to angela.duerr@inertiabev.com

 

It’s that time again - time for our Annual Consumer Direct Symposium which will be held on Friday, JULY 11th at COPIA. The symposium will be held in the theater at COPIA during the day; we’ll adjourn to the gardens in the evening for our Client Appreciation Party and enjoy some music, food, wine, and fun – all in the name of appreciation!

Our Annual Golf Scramble will be held at Chardonnay Golf Course on Saturday, July 12th. Even if you don’t golf, it’s sure to be a fun time. So, save the date for two days of learning and fun. More details to come. Hope to see you there!

If you haven’t already heard (or already RSVP’d), we’ve holding another workshop! This quarterly workshop at COPIA is on Wednesday, April 9th on wine clubs and allocation. We’ve divided the workshop into two, two-hour sessions.

The first session, Wine Club Basics, is from 10am to noon and will cover a variety of topics on planning, building and measuring the success of your wine club.

The second session, from 1:30pm to 3:30pm, is called Growing Your Wine Club and will focus on member acquisition strategies, maximizing your re-purchase program and considering an allocation program for one or more SKUs.

The Client Development Team who will be putting on the workshop need your RSVP by Tuesday, April 1st to clientdev@inertiabev.com. Space is limited.

We hope that the different tools, such as these workshops, monthly newsletters, planning tools, etc. have been useful to help our clients to grow their direct business. We’re working hard to ensure all the information provided is relevant and useful to their needs. If you have any suggestions or want to learn more about our workshop or other helpful tools, please reach out to the Client Development Team.

For more about our upcoming workshop, go to: www.inertiabev.com/inertiabev/page/workshop.jsp

In our continuing effort to provide opportunities for our winery partners to increase their online sales the Client Development team has scheduled a Wine Club & Allocation Workshop at our Napa office Wednesday, August 8th at 12pm.

Workshop Goals:

1. Recognize building blocks of a solid wine club
2. Learn how to set your wine club apart
3. REthink your Allocation Program
4. View the new Allocation tool

Since space is limited at our Napa offices, and some of you are located too far to attend, we will also be offering this Workshop by Webinar (View the workshop by computer and listen via your office phone).

RSVP by emailing clientdev@inertiabev.com. Please be sure to indicate whether you will be attending in person or by webinar.

Many of your are in the middle of preparation for the release of your wines this Fall. For those of you who intend to send out a release/offer letter to your mailing lists at the end of summer, you will be happy to know that we are releasing our new “Allocation Wizard” for allocating product to your mailing list at the end of this month (end of shameless plug). In order to add value to your business between now and then, I wanted to revisit the ‘3 principles of a Successful Allocation Program’ which were included in a blog I posted last year around this time. By following these simple guidelines, you will set yourself up for a successful release of your wines this coming offering season and for years to come.

In analyzing the business practices of some of the more successful “Mailing List” wineries, I have come to understand 3 basic principles that make for a successful DIRECT sales strategy. The first two principles below are commonly used across wineries of all shapes and sizes; the third, I have found, is common only to a select few in our industry. These principles rely on the assumption that wine quality is NOT the primary point of differentiation (if you intend to adopt this approach to sell your product, you better be on par with the upper tier wine brands in your varietal category, appellation, etc.) The three basic principles are:

1. Exclusivity & Limited Availability
2. Relationship with your Customer
3. Conditioning of Purchase Behavior

The first principle above, Exclusivity & Limited Availability is obviously a combination of two important, but inter-related concepts. A ‘Mailing List’ customer is primarily interested in being part of a small sub-set of wine consumers that have ACCESS to your wine, which is in short supply and therefore limited to a “small” group of people (every winery has their own definition of a “small” mailing list).

The second principle, Customer Relationship, is key to ANY strategy for delivering your product DIRECT to consumer. The most successful wineries carry on a relationship with their mailing list customers throughout the year. Often times, rewarding your mailing list customers with private events or special gift packs/bottle formats in a supplemental offering can be the best way to cement share-of-mind for your wine brand. If you only reach out to your customers once a year to announce the release of your wine, then you better have one hell of a value proposition in the bottle, because more often than not they will become tired and move on to the next new thing. At the very least, a simply email/letter saying hello will remind your customer why they belong to your mailing list community.

The third principle applies to how you position your offering and more importantly, how you establish the “rules of engagement”. Many wineries will have the same questions when starting out: How much wine should I allocate to each person on my list? When is it appropriate to drop them off of my mailing list? These questions need to be addressed in your DIRECT strategy and specifically how you intend to condition the purchase behavior of your customers. While there are various approaches to this principle, the most important element to this strategy is to allocate accordingly so that you retain the “Limited Availability” of your wine. Specifically, a ‘Waiting List’ is as important as a ‘Mailing List’. Simply put, healthy demand is generated by creating the perception that your wine is just out of reach. Another key component to this strategy is to establish a reward (and penalty) program for customers who purchase (or don’t purchase) your wine. Again, while there are several ways to tackle this, I recommend rewarding customers who continue to purchase their FULL allocation each year, by graduating them to a higher tier/customer segment in your ‘Mailing List. The top tiers, of course, we receive access to exclusive, small production wines and a larger allocation. This process will inherently establish the rules of engagement, without having to specifically communicate this concept to them.

Most importantly, for those customers who do not stay active and continue to purchase your wine each release/year, it is VERY important to communicate the behavior that will allow them to stay off of the ‘Waiting List’. Wineries do this in many ways, but at a minimum, you should expect your active customers to purchase wine at least once a year. Of course, it is up to you to decide if customers who simply satisfy the requirements to stay on the list by purchasing one bottle per year will warrant the same allocation each year.

I personally signed up for many, many mailing lists (and waiting lists) this past year and will choose which value proposition is the most appealing (no surprise - 90% of the mailing lists are Pinot Noir producers). I personally have loyalties to certain wineries that are particularly good at maintaining good relations. After all, there is no substitute for good, old-fashioned customer service.

“For any new technology to take root, it must successfully leverage existing legacy”. Thats a big statement. Take that in, I’ll wait. We at IBG understand this and our software is the result to show for it.

The wine industry has always been steeped in tradition, and tradition is usually hard to let go off. This extends to the software that wineries and wine companies use too. There are a lot of legacy systems out there - AMS, FileMaker Pro, MS Access (I hope not), etc. No doubt that these systems were state-of-the-art when they were first introduced and they proved their worth by being efficient and reliable tools for the trade. But a lot has changed since then. Those tools have been left behind by better newer technologies that are receptive to changes, malleable to business needs and extensible to non-core functionality. This is the new generation of software - an evolutionary step almost synonymous to the homo sapien evolving an opposable thumb.

But then, that’s all and good, you say, how do you reckon I move a million customers and their purchase history (tasting room and other sources) to these new technologies? Do you know how much its going to cost me to transition? No thanks, I’m good with my monolith software and my 21 inch 1000 pound CRT monitor.

Really, well, I’m sorry to hear you say that, especially since IBG greatly reduces the cost of transition. We’ve developed our software from the ground up, keeping in mind that wineries should be able to migrate easily and effortlessly from their existing legacy systems. Providing ‘backward compability’, meeting existing business needs and coupling them with the latest software advancements, we’re leveraging your existing tools with our next-generation software.

Here are some of the cases you must consider:

• Data - By far, this is the most important aspect of your existing business. Customer data, purchase history data, marketing data, etc. are all integral and this is where our software excels. We provide simple, yet versatile importers to migrate all our data into our system. We’ve successfully imported data from AMS, FileMaker Pro, Wine Direct, etc. Imagine a BYOB - only thats its a BYOD (Bring Your Own Data for the uninitiated)
• Wine Clubs - For some wineries, this the most lucrative aspect of their business. That’s why we constructed one of the most advanced club processing tools in the industry. I’ve seen a lot of wineries process their clubs through Wine Direct, but I ask them, if you’re making the jump to the Direct Consumer channel, why not migrate your Club Processing channel too? After all, a system that integrates all core aspects of your business is going to succeed and cost you less than having yourself spread thin between three or four different systems.
• Marketing - Online marketing companies - I’m sorry, but I find their core business of shot-in-the-dark marketing strategies ineffective and over-valued. How does IBG help? We’re not replicating the shot-in-the-dark strategy, we’re helping you communicate with your customers and contacts. We’re helping you talk to them on a personal level, develop a relationship through communication, and not have them feel like they’re just dollar signs for you. By consolidating all your data under one roof, you have access to better metrics for targeted communication with your customer base.
• Point of Sale - Coming pretty soon to an IBG account near you - full integration with a POS system. So the next time Mr. Bob comes to the cashier desk at your tasting room, you casually ask how he enjoyed that Pinot Noir that he bought from your online store last month? Instant credibility and personal connection — you’ve just created a dedicated repeat customer.
• Allocation Offerings - Now, I must admit that we’re a late entry into this high-stakes game. But lateness doesn’t constitute weakness. This is probably the fastest development area of our software and we’re helping many wineries migrate from their existing (albeit manual) processes. We’ve translated the (mostly manual) traditional processes involved in the complete life-cycle of the allocation offering season. We’ve married the power of marketing, ability for repeat offerings, and the importance of a historical relationship with the customers into one usable tool.

I agree that IBG has the advantage of many core tools in its software suite, but I feel the crucial importance is the compatibility with your existing software, the ease of leveraging them while you make the transition and then turning into power users of the tool to maximize your business.
Pras Sarkar
Lead Project Engineer
pras at inertiabev dot com

]]>

Our Allocation tool has been a great success for our wineries. It has become a feature-rich and comprehensible tool, while providing the ease-of-use that you’ve come to expect from the REthink Engine. In some cases, wineries have seen almost a million dollars in sales as a direct result of the use of the tool.

The Allocation model allows wineries to offer pre-releases, increase exclusivity and generate considerable consumer interest in the availability, ownership and prestige of their wines. Fortunately, the only one thing missing from this tool - the ability to grant additional quantities that users requested with their original order - is now available. We offer the ability to ‘clump’ the original Allocation order with the latter Additional Requests, thus rewarding the customer for ordering more than their Allocation quantity with shipping discounts and single-shipment fulfillment options. This in turn provides better customer-retention and generates a healthy amount of positive publicity.

As an added feature, we’re also looking to provide other wineries with an offspring of the Allocation tool called the “New Release” tool. The features are almost identical to the Allocation tool. Additionally, we have tailored it for smaller exclusive wineries whose main goals are to build a growing “List” of serious consumers and collectors of their wines. It focuses on gaining and collecting new user information and helps the winery judge the ‘popularity’ of a certain wine — even to the extent of forecasting production for the upcoming season.

We’re working on big things at IBG, but at the same time, we place value in not forgetting our existing features and making them rock solid before we venture into the beyond. Please contact your Account Manager for more details on how to use the Allocation tool for your winery.

Pras Sarkar
Lead Project Engineer
pras at inertiabev dot com