DIRECT WINE SALES: It’s time to RETHINK Loyalty Programs!
Sandra Hess, founder, DTC Wine Workshops Consulting Agency
June 26, 2018
There are two BIG CHALLENGES in direct to consumer wine sales today that I hear about in almost every wine region when presenting workshops and working with clients. Challenge #1 declining club conversion and challenge #2 problems collecting consumer data to attach to tasting room transactions. On average, 8-15% of tasting room visitors convert to club membership and only 30-40% to mailing lists. There has been a decline in club conversion and retention rates for the past 3-5 years, so what gives? Today’s wine consumer has more membership options than ever inside and outside of the wine industry with less time than ever to re-engage (think Blue Apron, Winc, Stitch Fix and on and on). As an industry, winery teams have continued to focus on club membership conversion as the number one direct customer acquisition path and its time to rethink this sales strategy. Avid club members will self-identify if they connect well with a wine brand and the conversion process is typically based on access verses deep discounts. So let the “clubbers” convert by offering plenty of visual cues in the tasting room and within printed materials about those access points. Provide loyal members more opportunities to refer new members as an ongoing membership acquisition strategy. Tasting room teams know how to close memberships but have they been given effective tools and training around how to convert repeat customers to the mailing list?
Chief marketing officers now have more budget than chief technology offers. Why? Because customer engagement is the key business differentiator in the US 2018 and onward. Returning customers spend on average 67% more than first-time customers according to a study conducted by Bain in 2017.
When analyzing client data sets from wineries across the nation, the “Repeat Customer” segment is the largest customer portion irrespective of region or price-points. Repeat customers refer new visitors, bring friends to parties, post selfies to social outlets at the winery property and love to brag about time spent with wine brands in social media. So why not cater to this very important customer segment? Now is the time to build a direct wine sales conversion strategy focused on the repeat customer segment.
- First, define your wine brands unique list of “access points” to establish meaningful re-engagement invitations. As we have learned, not every brand loyalist will convert to membership. If a repeat customer is already in your order management system, your tasting room team should be able to view lifetime value information at a glance when pulling up the record in the point of sale. How can this important customer be invited back in a more elevated way? I have visited almost every wine region across the US presenting workshops and staff training. This allows me to remain current with the type of visitor spaces, events and access points wine brands can offer their loyalists. When defining your unique list of access points, get creative and leverage what you already own whether it be access to seated tastings, library wines, large formats, VIP seating at the summer concert series, face time with the winemaking team in a morning hike or barrel tasting. This is not a “one-size-fits-all” exercise.
- Second, re-train your frontline staff on how to best position 2-3 new invitations based on “qualifiers” at time of purchase. Your qualifier might be a case or more purchase at first visit for others it may be $500+. What sounds more meaningful at time of checkout? Option A): “Would you like to join our newsletter list”? OR Option B) “Let’s get you in our system as our returning customers get VIP seated tastings whenever they visit the tasting room”. If you have a lot of out-of-state visitors, perhaps the $1 flat rat shipping on any reorder is a more effective invitation. Get together with your management team and develop more meaningful invitations to re-engage. When rolling out new invitations and tools, be sure to update the web store as well. Test the new strategy and revisit each quarter to ensure your team is meeting the business goals. Don’t forget to report successes back to your frontline staff from week to week to keep them motivated. Consider launch of a summer contest to get the frontline team excited about the new initiative. Can your management team provide gift cards, restaurant or lodging gift certificates, credits to purchase merchandise, etc.? Think your opt-in mailing list conversion rates will get closer to 70% by building a more effective consumer data collection strategy? Do the right thing with customer data once its collected. Don’t add repeat customers to a drip email marketing list and blast them with deals and discounts every month. DO send personal invitations to reengage in advance of upcoming events and educational updates from the winemaking team.
- Third, map out new visitor spaces to maximize conversion success for your frontline staff. Take the pressure off of your tasting room team by doing the right thing with visitor spaces. If space allows, dedicate the tasting room bar to walk-in’s/first time customers, seated tasting spaces reserved for repeat customers and club lounge areas available to members. Not only will your staff have a better chance of converting non-members but DTC managers will be able to compare apples to apples when running weekly tracking reports. For example, if you had 1000 tasting room visitors in May and 400 were club members, your tasting room team had a baseline of 600 prospective visitors to convert to cases, mailing list and club. Dedicated tasting spaces with associated POS Profiles will make conversion reporting by visitor space much more accurate and efficient.
At DTC Wine Workshops, we have built our success providing winery teams with the ideal blends of technology, talent and tools to grow direct wine sales and retain loyal customers. We hope that you find these tips helpful as you work through the top two challenges in direct to consumer wine sales today. We invite you to schedule a complimentary half-hour DTC Sales Audit of your wine brand. Mention “Customer Love” when contacting us at (707) 681-5120 or firstname.lastname@example.org. New customers only and offer active through August 31, 2018.