REthink Wine Blog

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

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

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

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

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

When a Wine Club member’s credit card is declined when you are processing a Club shipment. Do you

A.) Immediately alert your customer and invite them to log into the website to update their information.
B.) Set it aside to (hopefully) deal with it later when you have the time.
C.) Cower in fear at the possibility of actually having to interact with a customer who might decide to quit buying wine from you.
D.) Wait, you mean I’m actually supposed to do something about declined credit cards?

A recent workshop at IBG helped me to refocus my strategy for how I handle declined credit cards in my wine club. As a result of a sloppy approach, I realized I was wasting time, losing Titus Vineyards Wine Club members, and forfeiting wine sales. I was already emailing the declines at the time of processing, but after that my follow up was haphazard. It was time to create and employ a consistent strategy. I decided to reframe the yucky situation of declined credit cards as another opportunity to reconnect an existing customer with Titus Vineyards. Instead of assuming that a Wine Club member’s declined credit card meant “Goodbye”, I decided it was a precursor to a friendly “Hello, My New Best Friend”.

I started with an email. Rethink makes it really easy to email declines after batching your club. Be sure to warn club members not to include their credit card information in a reply email but to instead log in and update their account. Create a sense of urgency in these emails. Try the following:

“I need updated information so I can get your wine out to you right away before (insert one or more of the following as needed)
a.) the reorder discount ends.
b.) the weather gets too warm to ship.
c.) we run out of this wine.
d.) your Club membership is jeopardized.

“I would hate for you to miss out on this … (insert one of the following options)
a.) unique,
b.) winery only
c.) Wine Club only
d.) proprietary
e.) exciting
…wine while all your fellow Club members are telling me how much they are enjoying it.”

Next, re-batch our club on a specified date to charge those declines that have immediately responded. If you still have a few declines, follow up with a postcard or phone call. Again, choose your words and create a sense of urgency.

The next step was to tighten the bad credit card cancellation policy. Decide how many club shipments a club member can skip due to a declined credit card before you cancel their membership. If they hit that number then send them a polite letter alerting that you are going to cancel their wine club membership. Explain that their credit card was declined and that you didn’t receive any response to your prior communications. Encourage them to rejoin the club at any point and thank them for their past support of your brand.

One Club member, who received a cancellation letter at his billing address, was horrified to learn that his overworked assistant hadn’t updated his Club membership. I got back on the assistant’s radar in a big way when I told her I still had the wines available to send from his missed Club shipments. After perusing her bosses purchasing history, I made a few personalized suggestions. The boss bit and purchased nearly 6 cases of wine, including large formats and 2 cases of missed Club wine.

Another club member realized his spam filter was preventing my emails from getting to him. He updated his information, increased his Wine Club membership level, asked to receive the missed Club shipments and filled me on his eminent job change which opened the doors for corporate gifting conversations.

In experimenting with this approach, all of the Wine Club members who received cancellation letters immediately telephoned to re-enroll in the Wine Club. Not one of the Wine Club members I spoke with was rude or angry or put out. In fact, they were thrilled to be talking with silly old me in my jeans and flip flops at my desk in the funky old Titus Vineyards farmhouse. It was a valuable lesson. By tightening my strategy I decreased my overall number of declined credit cards, wasted less time, strengthened customer connections and sold more wine. Hello indeed.

Jennie Haug
Titus Vineyards - www.titusvineyards.com
jhaug@titusvineyards.com

I have a job that is specifically measured on how well my clients are doing. I am measured according to my clients’ progress, and for that reason, I am challenged with trying to help my clients help their winery increase their DIRECT online sales. Now, this may seem easier said than done, but at the end of the day, it all comes down to time management and planning. 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. In addition, the ecommerce tends to be delegated to the back seat of a winery’s DIRECT sales plan which often falls under hospitality. 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. It requires a different mentality to gain sales and customers in this arena. So how do I do my job — help wineries to do their job effectively and more efficiently — based on these challenges?

The answer surprisingly came to me during a personal conversation I had with a friend at Starbucks. We were discussing what she would ideally like to do when she ‘grew up’. She described her short-term and long-term goals, but to my surprise, it wasn’t just her goals in some abstract, vague way, but her step-by-step plans to attain to her goals. As a wise person once told me, “If you don’t know where you’re going, any bus will take you there.” We often tend to get so caught up in our day-to-day lives, that planning goals, moving towards those goals, and continually reassessing them gets lost. The same can be said for business goals.

Getting the right people on the right track with our winery partners seems to be the main challenge — we need winery owners to see the huge potential for DIRECT sales via the internet. Once we have their attention, the wineries will need to translate their understanding of their business into attainable goals and then build the DIRECT sales channel from there. The key to this is in the planning and goal setting. (To reference a smart coworker, see Stephen Mutch’s blog on “The Six Steps to Goal Setting”.)

Once you know where the bus is going, you can help navigate the best way to get there. The first step to achieve your winery DIRECT sales goals is to focus on these five key areas:

1. Effectively build your 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 Return On Investment

So, help me do my job well. Let me help you help your bottom line — get on the bus that is going where you want to be.

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

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

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

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

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

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

In an effort to educate myself (and stimulate online sales), I decided to implement one of the tactics that we promote to our clients - call your top customers. As a representative of one of our favorite wineries (with their permission of course), I pulled a list of their top 25 customers. I sorted them by total spent in the past year, then distinguished club members from e-commerce customers. Next, I developed my “spin” on the purpose of the call which went a little something like this:

“Since you are one of our best customers, I wanted to call and thank you. I also wanted to remind you that in two weeks we will stop shipments until mid-August due to the summer heat. If you are interested in stocking up on our wines for the summer, I can recommend a couple of great bottles and take the order for you over the phone or you can order from the website and use promo code LOYALTY to receive an x% discount…”

Some observations/lessons learned that would have saved me some time:

• Keep their customer record open during the call and intelligently refer to their order history, i.e. she buys a ton of Merlot!
• Fill out incomplete information in their customer record. For example, many phone numbers were not in general info, but I pasted them from the credit card info. Seems minor, but this helps in the customer reports that you run.
• If you have a lapsed wine club member, i.e. the past 6 wine club runs were canceled, remove them from the wine club to streamline your current loyalists.
• Make sure that you club exclusive products are up to date and visible to your club members when logged in.
• And finally, remember that the purpose of the call is to thank them and give them special attention, information, and an offer, just for being a loyal customer.

The results:

• 25 calls placed during a two day period - morning was best.
• 3 phone numbers were wrong
• 16 voicemails were left with the gist of the message
• 6 people talked to live
• 2 said thanks but they are stocked up
• 1 said thanks and that he was heading to the winery this weekend
• 3 people gave me orders

In 1 hour of prep work and 3 hours of calls…drum roll please….I sold 2.5 cases of wine resulting in about $1000 over the phone. Hopefully there are some residual online sales as well.

Dialing for dollars is one thing, but the real take home for me is that each person I talked to felt as if I knew them and I was looking out for their best interests over the summer.

Happy customer; happy winery; and happy IBG.

There are thousands of wine clubs out there, how will you set yours apart?

For those that think the wine industry is over-saturated with clubs, you are absolutely right. So how do you differentiate your wine club from all the others? How do you turn your new or stagnant wine club into a flourishing community from which a brand or winery can gain recognition, incremental sales, and a multitude of new and loyal customers? To build a wine club, you must start at the beginning, and you must have a plan.

What is a wine club?

We have defined it as: “An organization that offers its customers exclusive benefits, such as discounts, bonuses, or interest, in return for regular purchases of wine.”

Step 1: No Excuses.
No tasting room? No problem! If your winery does not have a tasting room, this should not prevent you from having a successful wine club. You will need to build your list of contacts and turn them into customers, then club members, and eventually into brand ambassadors. Try to keep your list of contacts and customers to include only those who are truly interested in receiving your regular wine shipments.

What if I am a small production winery? This does not exclude you from having a successful wine club. The best way to build your brand and wine club is to allocate some of your limited release wine. A small percentage of wine that you have set aside for your direct sales channel can be set-up as a “mailing list only” distribution. Create a sense of exclusivity – those on your mailing list each get an ‘allocation’ of a certain amount of wine each release, until you are sold out. If they do not buy, they are taken off the list, and the next person on your waiting list now becomes your new allocated customer. A waitinglist/allocation method allows you to control the growth of your club, maintain stability with completely satisfied customers, and provide members with the exclusive benefit of enjoying your wine. What if I am a brand new winery? First, focus on building name recognition. The quality of your wine will draw customers to your brand. Build a mailing list for those who are truly interested in your brand, and begin laying the foundation for a wine club in the future.

Step 2: Building on what you already have…
What if I already have a wine club, but it isn’t growing? Take a look at your club from the inside out. How much do you know about your wine club members? Are you keeping in contact often enough? Are you shipping too frequently or not enough? Most importantly, what do you have to offer? Make sure the benefits you make available to your customers keep them wanting more. What if I have too many clubs? The key to a successful wine club is consolidation. Keep the number of
club members limited, and for larger wineries, keep tiers. The highest tier level should receive the most exclusive benefits, and moving up a tier is a benefit to customers at lower tier levels. With a large club size, you should have money set aside for your club-member marketing plan: email campaigns, a calendar of events, winemaker dinners, celebrating great reviews, and publicizing low inventory, etc. should all be key in maintaining happy club members.

Step 3: Where do I go from here?
Once you have a successful wine club, don’t neglect it. Clubs are a good source of revenue stream, but don’t treat your members as credit card numbers. Those customers are loyal for a reason and the moment they don’t feel appreciated they will look for another alternative. Continually monitor your club’s benefits to ensure your club differentiates you from all the others. Use past vintages as exclusive benefits available only to your wine club member; call your top club spenders
or frequent club purchasers; know what your members want and deliver it!

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

We believe in wineries and direct.  That has always our mantra.  As an extension of that, we have started asking some of our wineries to become regular guest authors to tell their stories about the trials, tribulations, and success of running a direct wine program.  The first in this series is Jennie Haug.  Jennie is a twelve year veteran of the Napa Valley wine industry. As Sales Manager for Titus Vineyards she created and continues to run the largely off-premise driven Direct To Consumer Sales Program and Wine Club, as well as providing wholesale, marketing and accounting support.  We truly love working with her and her counterpart Emily Barouch.  If you don’t know it, they are two people to watch in the wine industry and what we internally call “rockstars.”  Jennie’s great blog to follow.

Though we’re still experiencing some rain here in the valley, as I look out my window I’m seeing signs of spring all around. Personally, I’m looking forward to the warmer weather and longer days since my triathlon training starts this weekend (which I’m sure will end up in my blog at some point)!

With this change in the seasons, I inevitably end up feeling like I need to “clean house” and get organized. What about you and your business? Feeling like to you need to do some cleaning and organizing as well? Things will only get more hectic as your club shipments start going out and your tasting room gets busier, so why not take advantage of this “slower” time and start with your most important asset - your customer and contact lists!

Now I know this might sound daunting, but believe me, you’ll save yourself some valuable time in the long run! The first thing to do is prioritize - I’m sure you’ve figured out that your club member lists are the place to start. This should be an easy exercise as you probably know many of them by name. Just check to make sure you’ve got all their information - shipping address, billing address, credit card (is it getting ready to expire?) and a current phone number. Not sure if it’s current - call them (I highly recommend this personal touch whenever possible) or send them an email asking them to update their information online, or contact you if anything has changed. When you get ready to process your clubs you’ll be glad you did, and so will they! I’ve worked with many winery clients who have thanked me time and again for this advice because they learned the hard way how long it can take to process a club shipment if addresses are wrong or credit cards have changed or expired!

Now that your club members are taken care of, time to tackle your customers. Here again, prioritize! If you’re lucky enough to have a very large customer list, and not nearly enough time to contact them all personally, then segment your list - call your top 50 or 100 customers, or your most frequent purchasers and thank them for their business and let them know you’re just checking to make sure their information is up to date. If you’re really on top of your game, you’ll have checked their purchase history and offer to send them more of their favorite wine, or let them know you’ve got a club shipment coming up and you’d love to sign them up so they’ll be sure to receive it!

For the rest of your customer list, send them an email and let them know you’re doing your “spring cleaning” and want to verify their information. Let them know you’d be happy to send them more wine as well, or sign them up for your club.

Most wineries will stop here - and I can understand that. With all you have to do in a day, it’s hard to find the time to reach out beyond wine club members and customers, but taking the time to reach out to your contact list (you might just have an email address, or a snail mail address) can reap some nice rewards. Though there isn’t much “cleaning” to do here in terms of their information, taking the time to reach out to these contacts a few times a year can help you know when to “clean” them out of your database. And again, you’ll want to prioritize - start with your email contacts since they’ll be the least expensive to reach out to!

For those you have an email address for, send them a note letting them know you’re doing some “spring cleaning” (sensing a theme here??) and would like to keep them on your list, but need a response back to know they’re still interested. Keep those you hear from in a week or two, and delete the rest! Reward those that respond with an incentive to make that first purchase so you can convert them from being a contact to a customer - email them a promo code, or offer an extra gift with their first wine purchase - something simple and small that you can include in their shipment. And for those that do make that first purchase, I highly recommend contacting them a few weeks after they receive their shipment to thank them - it will go a long way to building their loyalty, securing additional purchases, and possibly converting them to wine club members!

For those you have a snail mail address for, consider doing a simple postcard, or if you have the budget, a letter with a contact/order form. Explain to them that you’re moving to an electronic form of communication and would love to get their email address and other contact information. And again, the same rules and rewards would apply - keep those you hear from in a month or so, delete the rest and reward those who respond!

If you can perform these exercises even twice a year, you’ll have much cleaner information, a better sense of who your customers are and a list of customers and contacts that you know are responsive!

File this blog dispatch under, “General, Marketing” and “I didn’t know you could do that.”

Here at Inertia we’re on record as continually emphasizing the basics of building direct sales and customer management, executing a wine club thoughtfully, segmenting high value customers, providing differentiated value and skillfully managing all of the small day-to-day nuts and bolts that build customer loyalty and allow any small business to run crisply.

We do not typically advocate flights of marketing fancy; quite the contrary, actually. Just the same, it is kind of cool and as Internet experts ourselves, it’s interesting to highlight other pioneers doing interesting things via the Internet.

Spot Runner is an Internet-based ad agency that makes it easy (read: relatively inexpensive) for local companies to advertise on television, nationally even.

Did you know that a Napa winery could run an ad during Fox News in Naples, FLA for $150 bucks? Or, advertise on the History Channel in Ft. Wayne, IN for $53 or on MSNBC in Utica, NY for $14?

Everybody has seen the local commercials in our market—usually it’s car dealerships or hot tub superstores, local jewelers and the like … local spokespeople that become minor celebrities with some notoriety based on their omnipresent presence on television commercials. But, what about taking some of that local charm into other markets?

This local and regionalized phenomenon is being coupled with the explosion of video on the Internet and in particular the pro-amateur movement of using YouTube, Yahoo! Video and others as a launching ground for real user-generated commercials.

Recently, Doritos snack chips ran a consumer commercial contest and the winning commercial was featured during the Super Bowl.

Dove body wash is doing the same thing and premiering customer created commercial during the Oscars later this month.

The Super Bowl and the Oscars? These are hardly shrinking violet exposure opportunities, even if these are campaigns run by large consumer brands.

Spot Runner is a bit different than the YouTube phenomena in that they won’t run *any* created ad—they in fact have created the ads that can be customized to your business, a winery for example.

I did a search for “wine” and they have four or five commercials that can be customized with winery specific voiceovers, logos, etc.

After the stock customization, anybody using the Spot Runner services would define their criteria for where they want to run the ad, their budget and their desired reach by demographics and Spot Runner puts together a campaign within the requested budget.

If you have a wine club with a density of members in Naples, FLA you could do television advertising to capitalize on what might be a robust market for your wines, driving sales to your web site.

And, other business development opportunities presumably exist, as well, if especially if you’re using our Direct-to-Trade initiative to cultivate placement in a specific market.

I suspect that Spot Runner recognizes the clear trend in user-generated content and is readying a means to exercise quality control in line with FTC standards and their own benchmarks for quality so that they can offer a winery, or any customer the opportunity to buy media inventory with a more customizable commercial solution.

While we’re not advocating this approach for our winery customers just yet, and legally some state-by-state vetting may have to be done for a regulated industry like wine, it’s hard not to be interested in the potential future possibilities to enhance customer and prospect mindshare inexpensively in melding an online and offline marketing plan that can ultimately drive more wine sales for your business.

Like I said, file this one under the “I didn’t know you could do that.”

I read an article recently from Food and Wine Magazine about starting a wine club (monthly wine party) with your friends. I would like to share some of the points that stood out and also include some ideas that we kick around here at Inertia. Our philosophy of work hard, play hard in the wine industry usually involves a bottle (or two) of the purple stuff.

The Invite: Your choice in participants should reflect the goals that you have for the club. For example, if your goal is to expand upon your existing knowledge of wines and wine regions around the world, it is important to invite people into your new wine club who have a similar level of knowledge/appreciation for wine. If this is purely a social gathering with your close friends, which can sometimes be more fun, then the more diverse the knowledge and appreciation of wine, the better.

Theme: Wine Club themes can be based on specific varietals, wine appellations/regions, and even price points (most bang for your buck for under $20). This last category is my favorite, and usually impacts your wallet the least, as it is a good idea to keep the target price relatively low to allow everyone to participate. A great place to find great wines at affordable prices is the Top 100 Best Buys section of the Wine Enthusiast. I also recommend selecting wine regions from around the world which makes the selection for dinner easy as well. Establishing the theme for the wine club gathering is critical to furthering everyone’s knowledge of wines and helps to keep things on a level playing field.

Tasting Notes: Another great idea is to have the guests email the name of the wine they are bringing ahead of time so you can provide tasting notes for each wine. Allow some room for your guests to write down comments on each wine - this will also help everyone to remember which wines they like after drinking 5-6 glasses (or more) throughout the night. One of our strategic partners, SmartsCo (recently featured in an AMEX commercial) makes a game called Wine Party that provides all of the components to make your event a success…just add wine.

Venue: Wine Clubs do not have to be confined to someone’s home. In fact, taking the party on the road keeps the event centralized and makes it easier to hail a cab. A restaurant I went to recently would make the perfect venue for your next Wine Club gathering - the restaurant is called The Kitchen and is located in Sacramento. As the name suggests, the dinner is conducted around a kitchen setting in which everyone gets to directly participate in the preparation of the food. Bring your own wine (corkage is $25 per bottle) and you’ll be able to enjoy the wines with some of the best food in Northern California. Seating is limited to the 5 or 6 tables that they have in the restaurant, and with only one seating per night, it makes for an intimate experience.

We will be hosting a few wine club parties of our own this year and hopefully our winery partners will join in the fun. What could be more fun than Computer geeks coming together with Wine geeks?