REthink Wine Blog

This is the time of year when our need to make the sale is ever pressing.  How do I convert all the traffic in my tasting room to become club members?  How do I get my distributor to feature my latest vintage? How do I get the restaurant to add me to their list?  You might be surprised to know that the steps to making the sale is the same in all of these scenarios.

Step 1 - Curiosity

To make a sale you must have the customer’s attention.  To get their attention, they need to be curious.  How do you build curiosity?  It can be as simple as asking a tasting room visitor if they would like to have access to select wines.  Or you could ask the distributor if he was aware of the great press your new vintage has gotten, or even if he has tasted it.  All you are trying to accomplish here is to get the customer’s ear.

Step 2 - Trust

They are now ready to listen, but are they ready to believe.  This is the most important, and hardest step in the process.  You must build trust quickly.  If you are dealing with a long term relationship, trust has already been built.  But if you are standing in front of a trade account for the first time, you need to do something on the spot.  One technique I use is to show an authoritative grasp of pertinent information.  As an example, you are calling on a restaurant, hoping they will buy your 2005 Howell Mountain Cabernet.  You might say something like “You might have heard that 2005 was a difficult year, especially in Northern Napa (I’m not saying it was, just an example).  In our vineyard we decided to drop 50% of the fruit….”.  You then go on to explain how these actions created this exemplary product.

Step 3 - Need Assessment

Their listening, they trust you, but what do they want/need.  This is where the questions come in.  If you are talking to a tasting room visitor, questions like; where do you live, are you able to get a good selection of wine there, what is your favorite wines, do you like to entertain, do you like to try new wines, what influences the wines you generally buy, etc.  Only ask questions that you have a solution for.  “Do you like to entertain” “yes I do” “one benefit of belonging to our club is that you get great wines that aren’t available in your market, which makes for a real conversation starter. We also send food pairings and recipes with every wine”.

Step 4 - Need Addressing

I touched on this at the end of the previous section.  Here is where you make a recommendation to the customer.  You’ve uncovered through your questions that the distributor is feeling a lot of pressure from his big suppliers.  So you recommend a fun program, designed at  getting a small goal achieved, say placements in five high end restaurants, and offer to do a wine maker’s dinner.  You’ve addressed his need to not let your objectives get in the way of his corporate goals, and presented a win win solution.

Step 5 - Agreement

You’re feeling good.  You’ve developed rapport, you listened to what the customer needed, you offered a solution.  Now comes the dreaded close, ask for the order.  The trade account has tasted the wine, they love it.  You’ve established that the wine is a nice complement to the list.  Now you have to ask, “Can I send you a case to be here next Tuesday”.  If you don’t ask for the order, you won’t get it.  Do not expect the customer to offer one up, i.e. “this wine is great, send me some”.  It happens sometimes, but not often.  There are a number of closing techniques, and next month I will blog on some of them.

Remember and practice these steps, and I’m confident they will lead you to greater sales.

Inertia’s 5th Annual Direct Symposium will take place on July 11th, from 9-3:30pm at COPIA in Napa. This year, we’ve expanded our agenda to include interactive sessions on topics chosen by attendees. Last month, we released a survey on what we were hearing from our clients and industry partners as the ‘hottest’ topics in the direct industry. Topics included:

• Website Design
• Website Merchandising
• Selling Direct to Trade 
• Direct Shipping Compliance
• Allocation Program Management 
• Wine Club Management
• Wine Blogging
• Online Social Networks

We asked attendees to ‘vote’ on their topics of choice for breakout sessions at our July Symposium. The results were tallied, and we have our winners… 

• Selling Direct to Trade: Access. Control. Sales. 
• Direct Shipping Compliance: A Dynamic Marketplace. Your Options.
• Wine Blogging: Brand Building, Customer Loyalty and Sales
• Online Social Networks: Consumer- to-Consumer, Peer-to-Peer Engagement
• Website Design: Designing for Best User Experience & Greatest Sales
• Website Merchandising:  Sell More Online 

Our Symposium agenda will allow attendees to participate in two breakout sessions of their choice: One in the morning, one in the early afternoon. During each of these sessions, panelists will lead an interactive discussion with the audience around a designated topic. Based on several workshops which we led earlier in the year, we know our clients are eager to engage and look forward to some good interaction.

Because of limited space in each of our breakout sessions, we request that attendees reserve their spot in the session of their choice as soon as possible. Signups will be taken the day of the Symposium, at check in, but to ensure you get a seat in the topic of your choice, send your request through today (along with your RSVP if you haven’t already!) to rsvp@inertiabev.com.

See you in July!

I recently had quite a serendipitous episode that drove home the idea that we must approach Direct-to-Consumer e-mail marketing much different than we approach Direct-to-Trade e-mail marketing. While eating at one of my favorite spots Cesar trying to choose a bottle of Albarino, our waiter saw me struggling with the menu. He approached our table and asked if he could help and soon started going into the generic, descriptive words that typify all Albarinos; crisp, citric, and somewhat high in acid… Being in the industry these descriptions weren’t very helpful and after explaining I had a bit of background he then started describing one of his favorites. He went into the details of the vineyard location, the soil at the site, age of the vines and even the wine maker, I was sold. The key is that that once we find our audience we have to modify our message appropriately.

We’ve nearly mastered the art of wine focused DTC marketing, crafting messages that paint beautiful pictures of family, hard work and the individual journeys that lead each of us to the Napa Valley (or whatever valley or peak you claim as home) where we could fulfill a lifelong passion of wine making. Now that we enter the realm of DTT e-mail marketing we must reassess our message as we’re speaking to a different audience. As Direct-to-Trade sales increase every month , one of the many tools used to sell wine through this channel has been e-mail campaigns. Some of the most successful campaigns focused on messaging that included:

*The value of the channel. Direct from the winery to you! Currently unavailable in your market. The exclusivity of your product in their market is one of the biggest selling points!

*These are wine savvy people who taste through piles of wine on a weekly basis; the black cherry and cocoa descriptions are useful but let’s get into the meat and potatoes of what makes your wine stand out from the rest.

*Who’s your Wine Maker?

*Where is your vineyard? What kind of sun exposure do you receive? Does it sit in a unique micro climate that lends itself well to your particular varietal?

To break it down even further, when marketing Direct-to-Trade, there are essentially two groups to focus on; on-premise and off-premise which denotes the location of which the wine is consumed namely restaurants or retailers. What information is pertinent to off premise accounts?

*Scores. Shelf talkers are an effective selling tools in wine shops and highlighting scores on shelf talkers help sell wine. If you doubt the validity of this, take a look at the holes on any shelf in any wine shop and 9 times out of 10 you’ll find a shelf talker.

*Quantity discounts. More applicable with off premise accounts as they are more apt to purchase quantity.

*Currently unavailable in your market!

And for on-premise accounts?

*The availability to purchase in quantities of six. Cellar space is precious in any restaurant.

*The cuisine at your target restaurant; a big, bold Napa Cab won’t fare well on a menu featuring summer salads.

*Currently unavailable in your market!

Thoughts?

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!

Found an interesting chart today on marketingcharts.com defining the top online retailers by conversion rate.  This chart shows the total percentage of visitors to a website who completed a transaction during their visit in the critical December timeperiod. All I can say is “Wow”.

Check this out:

To refresh any memories, a website conversion rate is the percentage of visitors to a website who took a desired action – in this case, placed an order. So, from this info, it appears that nearly 30% of all visitors to thepopcornfactory.com placed an order in December! It should also be noted that retailers only qualified for evaluation in this list if they had a minimum of 500k page views in a month. That’s a lot of popcorn transacting across the web. 

Again, wow.

I’ve been in the direct, online business for many years now. I have certainly spent my share of time obsessing over my own conversion rates, and how to increase them. I’ve hired agencies to help. I’ve tested different variables to help encourage purchase. I’ve implemented multiple promotional strategies (Free Shipping! 50% off! Buy this NOW!). All paid off in different ways, and I’ve felt relatively successful with my efforts, but never to the tune of 30%!

I have a new personal goal.

So how do you improve your conversion rate?  And what is it that’s driving such high numbers for these sites? I think it’s a number of factors – all of which must play together truly move the needle. Here are my 5 suggestions to start you along the path of improving your conversion rate:

1) Know where you come from.
Do you know your own conversion rate? You better, if you want to improve it. Use Google Analytics or other analysis tools to define your conversion rate.

2) Grab a friend
Grab a friend who may be unfamiliar with the nuances of your website and ask them to help you ‘experience’ your website. I suggest you ask them to do two exercises. And don’t forget to watch the entire process. Literally, stand over them – and DO NOT coach them along!

Exercise A) Ask them to visit your homepage and experience your site. Don’t tell them to shop. Don’t tell them to read. Just see what they do. We’ve talked a lot with our clients about the importance of having an easy and intuitive navigational path for our clients (see an earlier post by Ben Chinn, our Director of Web Design & Development: http://blog.inertiabev.com/index.php/2006/10/09/site-structure-and-navigation/), as well as the importance of asking for what you want with headlines and ‘Calls-to-Action’ on the part of the visitor. Both of these efforts can have the desired effect of leading your visitor through your website – ideally to YOUR desired end. Did your friend follow your desired path throughout your website? Did they ‘see’ and act on the things you intend your visitors to? Or did they miss key messages entirely?

Exercise B) Ask your friend to visit your website now with the goal of purchasing a specific product. Start them at your homepage, and watch the path to purchase. Did they get lost? Struggle to find the right page that the product would be on? Did they find the product and the ‘buy now’ button with the minimal number of clicks? Ask them what information they would want to see in order to make that purchase (price, label, tasting notes, reviews). Did they find what they needed? Did it take a few minutes or many minutes, and a lot of ‘back button’ usage?

3) Resolve to Test and Measure
It’s ok to fail. Seriously. That’s what testing and optimizing is all about. Set a plan for what you want to achieve (in this case, higher conversion rates), list all of the potential tactics for reaching that goal, and get started. There are a number of things you can test: headlines, promotions, graphics/images, positioning of information on a webpage, the order of your navigational links, etc. For each tactic tested, watch “before and after” results. Did things improve or get worse? If they got worse, great! You learned what doesn’t resonate with your visitor. Another item off your list…

4) Take Baby Steps
Don’t throw out the baby with the bathwater. Just because your conversion rates may be lower than you like, and the shopping experience of your ‘friend’ was clunky, doesn’t mean your entire site needs to be overhauled. Commit to taking baby steps to learning about improvements in your conversion rates. Implement small changes at a time, and measure their impact. Learn what helps your visitor along to purchase and what doesn’t. And give yourself some time to learn. Commit to testing something over at least a week, if your visitor traffic is significant enough to give you ‘usable’ data. If it takes a month to get a real read on results, then give it a month.

5) Be Relevant and Meaningful
Your visitor is going to engage with you, and continue to engage with you if you provide something relevant and meaningful to their needs. Think about your own online shopping experience. When you need something and a site has it, that’s relevance. But when you make that relevant product or information entirely MEANINGFUL to them, you’ve now started a relationship. How do you make things meaningful?

•  Watch how visitors move through your site. Which pages do they spend the most time on? This can give you an idea of the type of content your visitors are most interested in. Finding a lot of activity on your Recipe’s page? Put it up front! Make it easier to find your Recipe pages, add a link to this page from relevant product pages.
•  Watch what visitors are purchasing. Likely the bulk of your sales are on products you’re well known for, have greatest distribution on, and/or highlight the most on your website. But if a sleepy Zin that’s getting no play on your homepage is actually selling fairly well, it’s telling you to give it some presence. Try it out. Suggest to visitors that this is a “Customer Favorite”, and post any reviews that you can get from your customers on that product.
•  Don’t forget about your follow up marketing, as well: Email. Once you know what people are purchasing, and where they are going on your website, send emails that demonstrate this. I buy a lot of products on Amazon.com. And, at least once a month I receive an email suggesting other relevant products. This makes my experience with Amazon more meaningful to me. I buy. They suggest. I like that. 

What are you doing to stimulate conversion rates? Have you ‘experienced’ your website? Are you bringing something meaningful and relevant to your customers? Think of it this way: if your website was achieving a 15% conversion rate, what kind of sales would that translate to?

Again. Wow.

Recently my wife and I went to dinner with another couple.  I had purchased a wine on line that I wanted my friend to try.  I called the restaurant and asked if they had a corkage policy.  They did.  They charged $10 per bottle.  Of course this is a great deal because we usually spend $70 - $80 on a bottle at a restaurant.  The wine I brought cost me $30, but it was much better than what we most often get at the restaurant.

When I told my sister about our experience at the restaurant, including the fact that we had brought our own wine, she said that she thought it was bad taste to bring wine.  She used to work in a restaurant, and felt that the restaurant owner spends much time in selecting wines for their list that compliment their food, and that choosing to bring another wine is an insult to the owner/manager.  She also pointed out that restaurants depend on the revenue they get from their wine sales to remain profitable.

I disagree with her.  The restaurant made $10 on the wine, with no investment.  Yes, they usually make $30 or more on the $50 bottle we purchase, but maybe that is part of the problem.  Most wine lists are pretty pedestrian, offering the same assortment of wines that are popular in the retail stores, or offering wines that they can buy for a great price, and markup three to four times over their cost.  Additionally, if they did not want us to bring a bottle with us, they could simply have a policy against doing so.

The best way to try a new wine is when it is served with an excellent meal.  I go to a restaurant for the food, and of course, I choose a wine from the list that matches that meal.  If I can enhance my dining experience by bringing a new wine with me, why shouldn’t I?  I’m not talking about going to the local retailer and buying a bottle of Kendall Jackson Chardonnay to try.  I’m talking about bringing wines that I haven’t had before, and that most likely are not available in the local market.

One provisio however.  When determining the tip for the waitstaff, assume that you had purchased a bottle of wine from the list, and then tip accordingly.  Your wait person shouldn’t be penalized because you chose to bring in your own wine.

Preparing Your Business for 2008

What is Your Plan?
It’s that time of year again; time to look back at where you have been, but more importantly, time to look ahead to the new year. While making resolutions is often part of your New Year’s activities, when it comes to running a winery business, setting business resolutions are equally important. Planning ahead by calendaring your marketing campaigns and anticipating the outcomes are key factors in measuring and optimizing your Return on Investment (ROI).

Where are Your Plans Taking You?
If you don’t know where you’re going, any bus will take you there. First, know your business then translate your understanding of your business into attainable goals. Second, what are your sales goals for each channel? Think by and for individual channels – ecommerce, tasting room, wine club, and telephone – and leverage the nuances of each. Create goals and plans to reach those goals for each DIRECT sales channel. Third, plan, monitor, and reassess your goals as necessary.

The first step to setting and achieving your winery DIRECT sales goals is to get on the right bus. What are the key goals to have? Wineries who can execute strategies which achieve all of the following five goals within each of the sales channels have the greatest success.

1. Effectively build your unified database
2. Increase online orders month over month
3. Build loyalty among customers
4. Build your Wine Club membership
5. Reprioritize your time to maximize ROI

How are You Getting There?
Once you know where the bus is going, you can help navigate the best way to get there. Take these five goals and translate them into strategies for each sales channel. Here are some examples that can be utilized in different sales channels:
1. Build your database by collecting 50 new contacts in a month. For your strategy, try putting a ‘fish bowl’ in your tasting room to collect business cards.
2. To increase online orders month over month, set a goal of an increase of 3 additional orders each month. To increase orders, try a promotion for free shipping or a telemarketing campaign.
3. Build loyalty among customers by offering pre-release specials.
4. Build your wine club membership by allocating select SKU’s to reward club members and utilize a club-exclusive area.
5. Reprioritize your time to maximize ROI: Instead of stuffing envelopes and lickings stamps for a mailer, send out a targeted email blast to subsets of your database.

Whatever strategies you decide to implement, calendar your marketing plans in advance to leverage against these goals. Whether it’s email blasts, customer loyalty programs, or winery events, have a plan in place on a monthly basis for the entire year, but continue to reassess and reschedule.

Who is Driving?
Now that you know what bus you’re on and where it’s going, assign a competent driver to ensure your bus arrives where you need it to go. Most wineries are so busy with the overall business management that the person who is in charge of ecommerce is also in charge of fifty other things, the same can be said of the Tasting Room Manager. The romancing of a hospitality employee up-selling in a tasting room is much different than Internet commerce. Their expertise in face-to-face interaction and salesmanship does not translate the same way to a customer behind a computer screen. Both require a different mentality to gain sales and customers in each arena, so ensure your driver is the best for that roadmap.

Save yourself time and energy by being proactive – plan in advance and be organized. Use helpful tools to keep your business goals on track with reminders and a calendar. Make sure everyone on the bus agrees with the destination; then, get down to business.

Remember, DIRECT is the best way to Communicate with, Acquire, and Retain your customers.

In a recent conversation with one of our small, boutique winery clients, some interesting information came to light. When they analyzed their Sales across all channels, the sales through traditional wholesale channels represented nearly 70% of their sales volume, but only 40% of their revenue. On the flipside, their Direct Sales represented roughly 30% of their sales volume, but nearly 60% of their revenue. Upon further exploration, their wine club and online sales represented over 60% of their Direct Sales…which begs the question, ‘Why do I employ the least amount of resources to this channel?’

This simple analysis is not complex by any means, but points to a problem that we find more and more with our winery partners. It seems these days that everyone is excited to exploit the DTC channel opportunities, but they do not invest enough to make it happen. A successful DTC program cannot be implemented without 3 simple things…

1. Mind share for DIRECT TO CONSUMER that starts at the top (CEO, owner, etc.)
2. Dedicated person/team to the Direct Sales Channel (Wine Club and Ecommerce)
3. Common goals across all departments incentivizing employees to drive customers to the winery website

So often we find that the various channels within a winery compete against each other rather than drive toward one common goal -> driving Sales. By funneling all Direct Sales through one person/team, they can share the same goal for building sales and making sure that everyone works in the same direction. Next steps…hang up the FOR HIRE sign in your front window and add someone to your team to manage the most profitable area f your business.

I was reading an interesting article about the increase in tasting room sales nationally.  It was sharing statistical data regarding tasting room purchases and charges for tastings.  The article stated that 50 percent of wineries charge for tastings, and only about half apply the fee to purchases made in the same visit.  I started thinking how much opportunity is lost there.  If you are charging someone to taste and they do not purchase at that time, offer them an incentive to come back and purchase later online.  Pass them a promo code listed on a business card and offer them a discount amount equal to their tasting room charges if they purchase online within a two week period.  This is a simple way of maximizing your chances at converting that tasting room patron to a full fledge customer.

Some people like to know what time it is. Others want to know how and why the watch works. If you want to know how the watch works in regards to the Internet and the use of technology for your DIRECT sales, read on.

Last week many readers of this blog went to the Wine Industry and Technology Symposium (WITS) and received a cathartic, technology-centric kick in the pants. Gary Vaynerchuk, a keynote speaker, noted in his remarks, (highlighted from the Santa Rosa Press-Democrat):

The wine industry is missing a huge opportunity to forge deeper relationships with consumers using new technologies such as Web videos and wine blogs.

That was the blunt message delivered to wine industry executives in Napa on Tuesday by a young, outspoken New Jersey wine retailer who said the industry needs to embrace change or die.

“Ninety-nine percent of the people in the wine business are really blowing it,” said Gary Vaynerchuk, director of operations for the WineLibrary, a Springfield, N.J. wine store with a popular interactive Web site.

Citing blogs specifically as a customer acquisition tool, Gary Vaynerchuk, as noted in a recent Inertia blog post, is something of an Internet sensation with his video blog and Josh Hermsmeyer, owner of Capozzi Family Winery and the blog Pinotblogger.com is building his wine business before releasing a single bottle of vino. Hermsmeyer gave a presentation on the power of blogging for wineries at WITS. His presentation is posted at his site, found here.

The best $2.10 you can buy if you’re interested in getting a high-level understanding of all of this Internet/community/blogging stuff is a series of 95 theses written in 1999 and posted on the Internet before being born in book form in 2000. The Seminal book, “The Cluetrain Manifesto” is as good of a primer as any that I can think of to help somebody make sense of some of the large, seismic dynamics that are taking place in the Internet space, a space you are presumably participating in or considering by developing, executing and continuing to enhance your DIRECT business. The preface of the books is:

The Cluetrain Manifesto is a set of 95 theses organised and put forward as a manifesto, or call to action, for all businesses operating within what is suggested to be a newly-connected marketplace. The ideas put forward within the manifesto aim to examine the impact of the Internet on both markets (consumers) and organisations. In addition, as both consumers and organisations are able to utilise the Internet and Intranets to establish a previously unavailable level of communication both within and between these two groups, the manifesto suggests that the changes that will be required from organisations as they respond to the new marketplace environment.

Some of the “theses” of the book are downright Nostradamus-like. When the book first came out, it was heralded and then dismissed as a part of the collateral damage that occurred with the downturn in the economy. Now, these simple maxims, some seven years later, couldn’t be more on target, correct and downright visionary, especially since they were released in the pre-blog era. A couple of examples:

* The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.

* Companies that don’t realize their markets are now networked person-to-person, getting smarter as a result and deeply joined in conversation are missing their best opportunity.

* Companies can now communicate with their markets directly. If they blow it, it could be their last chance.

Go to Amazon.com, search for “Cluetrain Manifesto” and buy the book used for a couple of bucks. For $2.10 you can barely buy a cup of coffee and I guarantee this book will have a more lasting impact than a Venti with cream and four sugars.