REthink Wine Blog

These are my principles.  If you don’t like them, I have others.   Groucho Marx

As we’re all very much aware, shifting market trends have made it a tough time for wine sales.  Eric Asimov summed it up in a recent article for the New York Times when he stated “Cash may be trickling, but anxiety is gushing forth.”  And while uncertain economic times may make it tempting to pull back on marketing spend or concentrate resources on the latest and greatest trend, it’s worth remembering that huge benefits can often be gained by focusing on the basics.   The essence of marketing is to understand the needs of your customers and develop a plan for meeting those needs.  With that in mind, I believe that all marketing efforts should fall into one of four buckets:  1) Building Equity, 2) Generating Demand, 3) Garnering Loyalty, or 4) Enhancing Channel Sales and Profitability.  By compartmentalizing in this way, all promotional tactics are focused on specific goals and objectives, allowing you to more easily measure results and plan for the future.

Build Equity:  Put simply the focus here is on acquiring new customers.    This includes all efforts to gently guide potential customers through the relationship cycle: from awareness, to contemplation, to preference for your wines (and your brand) and finally to loyalty and word of mouth.  Several tactics fit into this bucket, including but not limited to the following:

• Focus on direct marketing and list building strategies.  Maintain and stick with a promotional calendar.
• Reach out to both traditional media and the wine blogging community.
• Social Networking is a great way to attract new customers of every age (most notably younger generations), to add a human touch, and to build good will.  Whether developing a Facebook page, joining the conversation in Twitter or utilizing YouTube, you will need a strategy for both participating in and monitoring conversations. 
• If you’re feeling adventuresome, consider developing an online video.  Video can be used for many purposes:  winemaker interviews, culinary productions, or telling your story in general.  It can add a whole new dimension to your marketing effort.
• Build traffic to your website using SEM and SEO.  SEM is an often overlooked method of paid advertising which if approached correctly can be very powerful both in building brands and in generating demand.  Use it to build awareness for your winery, as well as for short term promotional efforts.  Focus on niche keywords, your winemaker, your winery and other terms which are important to your brand.

Generate Demand:    This involves the use of promotional methods to generate sales and increase the average spend per customer.

• Focus on the tasting room:  invite people to events, sponsor other local events and work with neighboring wineries if feasible.  Capture information that will allow you to approach these visitors in the future:  incentivize them to sign up for your newsletter or mailing list, and always encourage wine club participation.
• Recognize that tourists are looking closer to home and reach out to locals.  For California wineries, this might mean anyone within a three hour radius.
• Build upon your eCommerce strategy.  Remember the adage that “Content is King” and revisit your web site.  Make sure that content is up to date and product images and descriptions are clean and well thought out.  Also be sure that your site is frequently updated, with news, events and other happenings.  Don’t allow it to get stale or give the appearance of nothing more than an online “brochure”.
• Consider different techniques for increasing average order value:  offer product bundles, case discounts, or shipping incentives on volume orders.

Engender Loyalty:  The use of creative methods to increase the lifetime value of customers and club members

• Attack email campaigns and club promotion strategies with renewed vigor (use geographic and other forms of segmentation to ensure promotions are focused).
• Examine ways in which you can add value to club memberships.  Acknowledge milestones such as birthdays, anniversaries, club longevity.  Offer “members only” events, tours, and tastings.  Include re-order materials with your club shipments.
• Focus on current club members and solicit updated credit card information when necessary.
• Revisit your customer service policies and customer relationship management strategy and ensure club members are treated accordingly.  In turn, this will allow you to rely on your customers to help with marketing - happy customers and the word of mouth they generate can be very positive.  And remember that social media is not just about acquiring new customers; it is also a great tool for generating customer satisfaction and loyalty.
• Be sure to utilize relevant metrics so that you always understand the value of your customers.

Enhance Channel Profitability:  The pursuit of new growth opportunities and customer acquisition strategies via expansion into new and profitable sales channels

Direct to Consumer Opportunities:  As new marketplace opportunities become available, the landscape for direct to consumer sales will begin to change dramatically.  Participation in these marketplaces, whether Inertia’s new direct to consumer marketplace “CollectiveVine.com”, or via a Marketing Agent provides many benefits, namely:  1.) A captive audience and the ability to introduce your wines to an expanded customer base.   2.)  New opportunities for market research and testing without the traditional costs associated with them.  3.) Costs for participation are significantly lower than through traditional channels, resulting in better margins.  4.)  Customer acquisition: participation in winery direct programs means that customers are delivered to you for future marketing opportunities.  5.)  An opportunity to build brand equity:  today’s wine buyers are savvier and are accustomed to searching out preferred brands.  Online marketplaces provide an excellent opportunity for building awareness.
 
Direct to Trade Opportunities:  Wine REvolution, our direct to trade marketplace provides an opportunity to reach restaurant and retail buyers directly via an ecommerce platform, providing several benefits:  1) Access to new markets and trade accounts, 2) Control over your brand and 3) Increased profitability.  Make the most of your participation and aid trade partners by providing complete product data.  In short, make it easy for partners to sell your product.

Finally, as you reach out to new customers via channels which have not been available in the past, I think it’s important to remember that you are building a brand. With that in mind it is essential that you maintain a consistent customer experience across all sales outlets:  from sales collateral, product descriptions, prices, and the content and images provided to online marketplaces all the way through to the customer service experience.  Customers should know and respect your brand regardless of the touch point.

Over the last year, and particularly the last few months, Facebook Fan Pages have quickly risen in popularity. In fact, several of our winery clients have asked about putting Facebook Fan Pages on their websites.  Since Facebook provides an icon and code, the task is as simple as copying and pasting directly into the content editor or kicker on your website.  John from Olson Ogden Wines did this successfully on his own last week and is using his Facebook Fan Page to announce news and communicate promotions, events, pairing, etc.  Take a peek!

Some tips that make an effective Facebook Fan Page are listed below and were taken from several articles on the web including one written by Spencer Spellman.

• Make your fan page pop.  Many fan pages fail because they don’t grab the user’s attention.  Successful fan pages have at least some html or flash that is graphically appealing to users.

• Offer incentives.  Make your fan page a resource for people and they will return.  You might create regular promotions on your products and use the fan page to answer questions from your fans.

• Run contests for fans as they help build a loyal audience.  Some contest ideas might be to invite your customers to send in pictures of them enjoying your wine or food pairing ideas.

• Leverage your resources.  Your customers and friends may be using Facebook and be unaware that you have a fan page.  Use your website, email, instant messaging, printed material and other social networking sites to drive people to your fan page.  Rather than competing, consider collaborating with your neighboring wineries.  A group of Silverado Trail wineries joined together  to create a multi-branded product offering which they advertise to their expanded list of customers. In another example, Ackerman Family Vineyard described how they collaborate with other select wineries to host a Winemaker’s Dinner event  in which each winery represents a specific varietal to pair with one of the dinner courses. Combined efforts can oftentimes make a bigger impact than trying to do it all on your own.

• Interact and have fun with your fans which can help spread and promote your fan page virally. A fan page is a fun way to show your corporate personality.  For brands that want fan pages to have added value but don’t want to become a resource portal; consider offering consumers a reason to join by including Facebook only promotion codes.  There’s no way to make sure the promotion code is given to only Facebook fans, however you can require an email be sent to you and email back a promotion code.  If you are networking at an event and hand out take-aways that promote your Facebook page, the potential to reach new fans is exponential to the number of friends each of these new fans has on their list.

Creating a Facebook Fan Page is simple, though it will take some time, dedication and planning. Remember to build good content which is easily accessible, and let people know about it. While you may not have a huge following immediately, over time your community will begin to grow.

No one doubts that when it comes to electronic commerce and e-marketing in the wine industry, wineries with a tasting room have a significant advantage. The visitors that walk into the tasting room immediately become customers or well-qualified prospects that can be added to a winery’s “contact list” for future outreach. But if you don’t have a tasting room, building a contact/customer list is a much more daunting task. But if e-mail marketing and online sales is part of your direct sales strategy, then it’s a task you must take up and address.

Here are some creative strategies for building customer and contact lists that have been successful for other wineries without tasting rooms. 

1. Business Teaser Cards: A few wineries, when printing business cards for all their employees, have used the back of the card to offer the holder a 10% or even 20% discount on their first purchase. Often each card has a code on it that buyers can use to assure their online discount and to track who’s business card led to the sale. It’s a creative way to invite new acquaintances to the website when without the discount/invite you’d only be handing out a business card with no call-to-action.

2. Event Giveaways: One Sonoma winery with no tasting room but with a guest house on their property always brought a sign to the tastings they attended announcing that following the tasting a drawing would take place for a weekend getaway at the winery’s guest house. The sign carried beautiful pictures of the guest house and the property. All the attendees had to do was drop their business card in a fishbowl or fill out a simple slip of paper with name, state and email. Within a day of the tasting the winery did their drawing, contacted the winner and set up when they would visit. But more importantly, the winery would also contact via email every single person who entered the drawing with a “thank you” message and an offer of 15% on their first purchase. Their list continues to grow.

3. Contests: A number of wineries without tasting rooms have found that contests are a fantastic way to draw prospective customers to their website. The best contests should be easy to enter, but also give the entrants a feeling of participation or connect with the winery, winemaker or brand. One winery has used its back label as a canvas for the contest by inviting entrants to design their own 100-word back label on a specific subject. The winner had their entry published on the label when the wine was bottled! The contest was announced with a press release and an ad, and the winner was announced on the website and in a press release. They received hundreds of people visiting their site to participate, all providing their entry of back label copy along with their e-mail address. The winery grew their mailing list and customers were able to engage with the brand. Win-Win.

Prospecting and building your email contact list must be an ongoing project if increasing online sales is part of your marketing strategy. If you don’t have a tasting room, you’ll need to think creatively. The time and effort that goes into a very creative customer prospecting program will pay off in an enhanced email list, and ultimately increased sales.

Did you know that search engine spiders may only crawl your site every month or so? Sometimes it’s even longer! If you want to make your products “searchable” come holiday season, it pays to start thinking about it now. Determine when your first promotions are scheduled and count back, you’ll need to update both product descriptions and keywords way before the holiday shoppers hit your store. When updating your information, make product descriptions relevant to holiday buying. Add enticing verbiage to your teaser and descriptions. “Staff favorite”, “Great gift idea”, and “Ships in a separate box” help the buyer picture your wine as a gift. An appealing description that is optimized for search can make the difference between a sale and a missed opportunity.

Are you planning to do corporate gifting? Determining what product(s) you’ll offer, your decorative packaging, and gift pricing are all factors to start thinking about early. But, coming up with your gift presentation is only half the battle. You also need to consider your targets: companies you already have relationships with, a purchased target list, your own DTC customers that own/operate businesses, etc. How are you reaching out to them? A nice printed piece, a personal visit? Companies often look for corporate gifting options far before the holiday arrives, so have your prep done early and be ready to sell, sell, sell.

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!

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.

Last week I got this call from a younger relative expressing all their plans for the summer. It quickly brought back that feeling we have all experienced. You remember how you felt when you walked out the door after taking that last test of the year. That first breathe of fresh air after 9 long months of schedules, tests, long days and sometimes long nights. I then quickly realized that I will not have that feeling again for at least another 30 years! Now I’m not here to be a Debbie downer but the true take away is the understanding of what TIME means to us. TIME is the currency that can’t be earned, it can’t be given back, it’s all in how you use the TIME that you have been given. So instead of saying that I will give you back the time used to read this blog, I will hopefully provide you a couple quick tips to help you Re-prioritize your time so that you will have a better return in the time you do spend at your job. (These tips are meant specifically for wineries)

Customer Appreciation
During slow times in the tasting room, call your top customers and thank them for their loyalty to your brand

Communication
Instead of being over-whelmed with sending a mailer, send a email to a specific audience providing them a specific incentive to purchase

Support your key supporters
Keep track of your top customers and keep them on the list to call when certain “limited” wines come up. Instead of taking the time to move it through your tasting room, simply make a couple calls to your key customers. This will not only sell through the wine but also bring those customers closer to your inner circle.

Don’t recreate the wheel
Instead of racking your brain to come up with new ideas in your office, take a day to visit other wineries. Enjoy the day, keep your eyes open and you will not only be refreshed but I guarantee you will walk away with ideas to build upon.

Support your staff
Don’t get so caught up in the busyness that you forget to make the time enjoyable for your staff. This will make everyone enjoy the time they are working. Once you get them to enjoy their time, their time will be more productive.

Listen
Take time to listen to your customers and staff before trying to change your customer experience, tasting room tours, wine club, or events. This will not only increase the efficiency of the transition but will keep you from having to go back to the drawing boards.

Although most of us will not have our summers back for a while, we should make the most of the time we do have so that we can more efficiently do our jobs. Always remember that the goal is to work so that we can live, not live so that we can work.
Enjoy the day!

Email ideas and tips seem to be ever-changing. Below you’ll find a website link
so that you can keep up on these changes, along with a few important tips.

Watch your subject line. Don’t over use upper case letters or punctuation. Make
your subject line identifiable with your company and/or product. Avoid use of
words like  “FREE” or “CLICK HERE HERE NOW!” Instead use the word
‘complilmentary’ in place of ‘free,’ and ‘follow this link’ instead of ‘click here.’

Ensure your FROM email address is an email address that’s checked often. Even
if you state in your email not to reply to this email address, it can happen. You want
to help potential customers replying to this email address with any questions or
issues they may have so they become return customers.

Personalize your emails when possible. Many email modules now have tags you
can use to insert your customer first or last name. We all like to see our names in
print, so take advantage of this option.

Add a note in your email that reads like this: Please add info@yourcompanyname.com
to your address book to ensure our emails are delivered to your inbox.
This will help avoid your email being sent to spam or junk folders.

You’ll find additional information here:
http://emailexperience.org

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.

Many online marketers struggle to continuously increase their email conversion rate. In order to make sure your time and effort are well spent, focus your conversion efforts on products that will produce higher average orders and products your customers buy, and buy repeatedly. If the average percent conversion is 1% you want to be sure that your email marketing techniques offers your customers what they want. We’ve provided some ideas to get you started below. There are many ways to increase your conversion rate. Here are some suggestions

1. Segment your list to offer something specific to your customers’ needs
   1. Offer Cabernet to Cab lovers only
   2. Offer to club members only
   3. Offer to X State only
2. Provide incentives to purchase
   1. Shipping included in price
   2. % off Shipping
   3. % off Wine
   4. No Tax
3. Let the world know what you have accomplished
   1. a. Awards you have received should be highlighted
   2. When you get a great score, flaunt it
4. Be proactive when sending
   1. Don’t wait until the last minute to write your email. Think through your offer to avoid making simple mistakes.
   2. Use the best practice examples that Inertia has provided:
      1. i. Keep it short and sweet
      2. Have call outs to specific wines and link them to the product
      3. Tell them where you want them to go and show them how to get there
5. Always provide several links from your email to your site

The merchandising of your online store - for example product merchandising and streamlining of the purchase path - can be measured through promotional results. Google Analytics can be used for a more in depth analysis of how customers are getting through checkout, and where they may be dropping off. At the end of any campaign, the number of orders placed and the average dollar per order will provide you the information necessary to determine the effectiveness of your promotion and provide guidance for your future campaigns.