tag:blogger.com,1999:blog-941731830705031230.post6038890483090601553..comments2024-03-11T03:24:58.582-07:00Comments on SVB on Wine: What Percent of Tasting Room Visitors Buy Nothing?Rob McMillan rmcmillan@svb.comhttp://www.blogger.com/profile/12396624790174552807noreply@blogger.comBlogger62125tag:blogger.com,1999:blog-941731830705031230.post-54868486892937632612016-03-16T18:42:09.270-07:002016-03-16T18:42:09.270-07:00Thanks for the cool history lesson!Thanks for the cool history lesson!Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-23798028300422152032016-03-16T03:27:03.455-07:002016-03-16T03:27:03.455-07:00At the end of the Napoleonic Wars the Russian Army...At the end of the Napoleonic Wars the Russian Army occupied the Champagne Region. Widow Clicquot saw this as a huge opportunity and invited all the officers to come to her cellar to "taste" her Champagne. Her assistant cried in alarm "Widow Clicquot, these Russians are drinking everything. "Today they drink, tomorrow they pay" she replied. The house of Veuve Clicquot was set up THE Champagne in Russia for the next 100 years. She did not charge a tasting fee.Anonymoushttps://www.blogger.com/profile/10887826668507398088noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-40311609791182287492014-03-21T07:59:29.217-07:002014-03-21T07:59:29.217-07:00I am curious...... How many customers did you get ...I am curious...... How many customers did you get per week on average when you were open to the public and how many are you getting now ? Anne-MarieAnonymoushttps://www.blogger.com/profile/17448925210632653712noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-30799073801429688342014-03-19T16:29:36.606-07:002014-03-19T16:29:36.606-07:00A free software was launched last year that is use...A free software was launched last year that is used by large companies like Pepsi Cola. The software employs a facial recognition program to identify age, sex, and race of people (but not "identity") in malls in front of digital bill boards. The billboards then serve an advertisement that is appropriate for that person. They will gladly provide the software that can do the same for a tasting room (it also eliminates counting staff as visitors).When I ask the cost they said it was free as long as they got to aggregate the data (ala Google). They would send you an email at the end of each day with the total visitor count with appropriate demo's. I am unaware of any tasting room using this or any other facial recognition software. All it requires a digital video camera and an internet connection. Many retailers and banks use similar software to measure and improve their business. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-48841160492135542132014-03-19T14:00:56.434-07:002014-03-19T14:00:56.434-07:00*sigh* You had me at "success rates".*sigh* You had me at "success rates".Anonymoushttps://www.blogger.com/profile/17528678243007993523noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-78147330448848121542014-03-19T13:58:16.823-07:002014-03-19T13:58:16.823-07:00Judging from the posts, I would assume quite a few...Judging from the posts, I would assume quite a few of these wineries are bit larger, this tasting staff, that tasting staff, headcounts, etc. I went to a small local winery this weekend. Husband and wife manned the tasting room and son was shovelling snow. They had a handle on what was going on, they did every pour. I'd say if you're small, without distribution, you want your tasting priced to make economic sense. A review of a wineries Yelp posts can tell a lot.Rusnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-82988365064472555152014-03-19T13:51:50.601-07:002014-03-19T13:51:50.601-07:00All I can say is .... a woman after my own nerdly ...All I can say is .... a woman after my own nerdly heart. Thanks for the comments Susan. I'm hopefull I'll be able to get round two of this out Sunday and show how style of a tasting room impacts success rates.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-92137764804403895972014-03-19T13:48:49.664-07:002014-03-19T13:48:49.664-07:00Great blog - I think you inspired me to write one ...Great blog - I think you inspired me to write one of my own next week in reaction. In working with dozens of wineries on this what I've seen is control, or metrics are the deciding factor. I would submit that the quality of traffic that you're seeing is only part of the problem.<br /><br />Metrics on profitable traffic channels are important. Agreed: It makes sense that those by appointment are doing the best as they're controlling the top of the funnel traffic and those with the Library Tasting signs are casting a larger net. Tasting rooms should be tracking online offers, partnerships, two for one tasting coupons or other things in the market place to ensure what is working and what is just causing them to pour wine for free.<br /><br />But, metrics and tracking success doesn't stop when people get in the door. Within the tasting experience is where you look at your conversion metrics, pour ratios and even break it down by tasting room employee. Some employees/offers/situations will do better at converting certain types of customers. It is your opportunity to refine and hone the experience to get the maximum returns in coordination with the types of traffic you're driving externally.<br /><br />And, if this sounds daunting, in case after case I've seen that simply setting up tracking and monitoring it publicly increases conversions all the way down - visitor to taster to buyer. There is something about knowing you're being tracked that keeps everyone's eyes on the prize.<br /><br />As a data nerd I'm really looking forward to the report, and wish I was a winery that could have contributed to see the full report! Anonymoushttps://www.blogger.com/profile/17528678243007993523noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-46646070470409836702014-03-19T12:42:55.184-07:002014-03-19T12:42:55.184-07:00Thanks again for the comments Rus. When you are ta...Thanks again for the comments Rus. When you are tasting wine, consider the vast majority of wineries are small and family owned. They are forced to go direct to consumers because the distribution system in the US wont handle their needs, yet still lobbies hard to retain their constitutional choke-hold on wine. In most cases, you wont find the small producers wines out of state. But small wineries are also getting better managing the direct process. At this point, any tasting room with their head screwed on straight should be able to ship wines directly to your home so you don't have to take them on a plane or leave them in a car.<br /><br />To the point of profitability, the average winery makes about 7% profit before paying taxes. Its not much so clearly they don't worry about getting out every nickle from all their initiatives. What the industry does need to do, and there is movement - is come up with individualized metrics to measure their activities in the tasting room and determine the success rate (this blog post went with a failure rate but its the same thing inverted.). Retail strategies are improving slowly and thats a good thing for both the consumer and the winery.<br /><br />Thanks again for thoughtful comments.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-14600953830974871042014-03-19T12:23:59.485-07:002014-03-19T12:23:59.485-07:00Thanks for the comments Anon 12:06. You sound like...Thanks for the comments Anon 12:06. You sound like many of the consumer focused comments on the WineBerserkers thread who are debating the term coined and the value of tasting fees. Its actually a pretty good read with some very thoughtful posts.<br /><br />Relative to the term, it was used against a story for entertainment value. Some consumers might feel insulted by it, but the point of this post was to get a discussion going about metrics used in tasting rooms and activities and strategies used for improving the conversion rate of visitors to customers.<br /><br />Otherwise, I think everyone in the wine business agrees with your comment vis-a-vis hospitality instead of elitism. When a consumer comes into a tasting room, if they aren't welcomed the winery will fail. <br /><br />My belief here is that wineries have to do a better job of reaching their target consumers BEFORE they get in the car versus taking the salmon trap approach. With that targeting of consumers, you will end up with better conversion rates and happier customers.<br /><br />Your other point about overserved customers and my story using a fictional Uncle Ned really represents a minor but real subset of wine consumers. Some consumers decide they will use the hospitality of a tasting room as their own personal wine bar and bring their friends for a wine tasting party, but that is a minor but consistent problem for tasting room staffs.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-17404626998438381872014-03-19T12:08:03.681-07:002014-03-19T12:08:03.681-07:00Anon 7:37 - thanks for the comments. Appreciate yo...Anon 7:37 - thanks for the comments. Appreciate your perspectives and agree with you generally at a high level. That said, regarding your first comment - 90% etc ... that is factually wrong, but I think you are using the comment as generalized statement about the accuracy versus the real numbers of wineries that are collecting the data, because later in your post you come up with another guess that 100% of wineries collect the information either accurately or through some other means. I doubt you can back up that assertion with any facts as I don't believe there has been a concerted effort or study to measure changes in the trends of customer counts in tasting rooms Its probably a good question to ask in the next survey though.<br /><br />What is true - and where I agree with your high level comment, is there is no universal way to measure visitor counts. That said, by our observations most wineries now are getting better at finding ways to measure many things including visitor counts. Some wineries use sample data from clicker counts against sales information to come to an estimate, some use floor mat counts and infrared beam counters, salon style operations have easy access to good information with tasting fees as you mention, and some of the larger tasting rooms are able to use a feed from security cameras combind with embedded counter software that can intrepret the signal. The selection of any device and protocol depends on the size and type of retail room, and accuracy ranges from pretty good guess to nearly perfect which is again consistent with your generalized comments.<br /><br />My own experience is that the overwhelming majority of wineries with tasting rooms are now counting visitors one way or another, but clearly like many other metrics in tasting room analytics there is significant room for improvemnt.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-82521934003510418462014-03-19T12:06:59.720-07:002014-03-19T12:06:59.720-07:00Are the "by appointment" wineries consid...Are the "by appointment" wineries considering 1 bottle sold to a group appointment as 100% sales? I agree with a previous poster that to marginalize those that do not buy on every visit and even to label these folks as mellon squeezers is offensive and not good business. They have taken the time to visit your business, so unless they are clearly intoxicated and unruly (in which case they would not be served anyway), then they must all be treated as potential purchasers of your product. Customers can tell if your attitude is elitist. But I guess the business model of some wineries is to be elitist. I thought wine was an inclusive thing, not an exclusive club..Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-71320466589005593682014-03-19T12:01:18.280-07:002014-03-19T12:01:18.280-07:00One thing that does not get nearly enough attentio...One thing that does not get nearly enough attention is that people that are not "day tripping" very likely don't want to cart around wine for the rest of their trip. If the wine is stored in the back seat, it is subject to theft. If left in the trunk (if room), it can be cooked in one summer afternoon. I rarely buy, when not "day tripping". I'll note the wine and maybe ask who is distributing in my home state. The sale may show up a thousand miles away, but it's there.<br />The question to ask is, is the whole winery operation working for you (profitable)? You can't worry about every little thing turning a profit. Most restaurants don't make much, if anything, from Monday to Thursday. If the weekends are busy, they are happy.<br /><br />RUS/Rus initials and nick name, big with parents for a few years in the 50sRusnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-57705464114768483602014-03-19T11:42:39.424-07:002014-03-19T11:42:39.424-07:00Nomad - I don't think wineries will focus sole...Nomad - I don't think wineries will focus soley on improving success rates. There are a bunch of other metrics like sales/visitor which hopefully they are spending time tracking. Your last point is what is important for me: Measure outcomes and understand how initiatives in the tasting room and marketing DtC are impacting changes in those metrics.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-88453345875885906902014-03-19T08:58:03.079-07:002014-03-19T08:58:03.079-07:00I agree Rob but I just fear that wineries run out ...I agree Rob but I just fear that wineries run out to solve this one problem - i.e. they think that decreasing the % of melon squeezers will have a major impact on their business. <br /><br />If I am a winery on Napa's Highway 23, I am less worried about this than if I am a winery high on Spring Mountain. The wineries on the main drags need to customize their experience for the fact they will have a lot of drive-by non-shoppers. Think about what V Sattui has done to make their tasting room effective. If I am Honig, high on Spring Mountain, I don't want a high % of melon squeezers because that indicates I either have the wrong customers or am delivering a bad experience since they clearly sought me out.<br /><br />It's a question of context for me. I would not immediately worry about 50% melon squeezers though I would definitely want to understand why that is the case.nomadfromcincyhttps://www.blogger.com/profile/05542083634429685982noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-1431432897544757692014-03-19T08:10:10.843-07:002014-03-19T08:10:10.843-07:00Our small brand does not have a tasting room but I...Our small brand does not have a tasting room but I am very tuned in to the DTC model and make a point to observe the process when I visit wineries in my area. Samples are the most effective, but also the most expensive sales tool. A few observations.<br />1. I was surprised to see the staff at one winery hit folks up for T Fee immediately upon stepping up to the tasting bar. I found that once folks pre-paid the tasting they were less inclined to pull their wallet out again and buy before they left. Did they feel they had already met their obligation or did the 'hassle factor" lead them to pass on a purchase. I am led to wonder but think the former. In any case, it most definitely reduced the number of purchases made that day at that particular winery. <br />2. When VERBALLY told up front there was a tasting fee of XX which would be waived upon purchase, even prior to tasting a wine, I noticed discussion began over what they were going to buy. So that simple comment was all it took set the sales expectation from the start. <br />3. In busy tasting rooms when there are many people at the bar and milling around the retail center I see people 'sneak out' time and time again without buying OR paying the T Fee. Not having enough staff to manage the flow is a clear detriment to sales in a busy tasting room.<br />4. People do not want to hear about quince, currant and shoe leather they want to feel welcome, be acknowledged and simply not ignored. Start the conversation with what wine do you typically like to drink or ask what will they be having for lunch then lead them to share with YOU what their favorite is from your winery. <br />5. Finally, as I am in the business I am quite often compe'd the T Fee (which I appreciate) and unless I absolutely don't like the wine, I typically buy a least a bottle of wine. When you live in wine country everyone you have ever known wants to visit and go tasting. I am offended by my own friends who simply want to visit every winery, make it a party and hope their fee will be waived as well. It frustrates me when the tasting room personal doesn't ask for the sale. The customers need to be reminded that the wineries are a place of business not a bar. A simple " which wine would you like to take with you to share" or "may I stock your cellar with your favorite taste today?" may be all it takes to close a sale. ASK FOR THE SALE, don't make me do it for you. In the case of my visiting moochers I make a point to remind them to please support the wineries who welcome us by buying a bottle or two when they find one they like.<br />5. Visit the mall and hire the best cosmetic sales person you can find. Anyone who can make someone feel great about dropping $75 on an ounce of clear liquid can sell wine. You can teach the technical stuff, hire the confidence sales person who can engage a perfect stranger as they walk by. <br />6. Finally, I know they take up space but I encourage you to keep a few wine shippers on hand. (I love WineCheck.com) Many folks don't want to ship one or two (or their states prohibit it) or join every wine club but if you can sell them a shipper- they will buy more wine if they have a way to get it home. Stephaniehttp://www.arataswine.comnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-40481118208710757752014-03-19T07:37:36.147-07:002014-03-19T07:37:36.147-07:00Given 90% of wine tasting rooms that are open with...Given 90% of wine tasting rooms that are open without appointment, make no attempt at having an actual accurate visitor count the base numbers are at best suspect. If you are appointment only you have better data because you have fewer visitors who prior to arrival provide at least how many are visiting. Compared to other retail operators wine tasting room metrics are not really metrics but at best estimates. If DTC is that important to winery success (and it is) then at some point accurate baseline data will be used. At the moment the "Metrics" are about 1/3 conjecture, 1/3 accurate but non detailed data and 1/3 estimates based on cash register rings or WAG.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-92218901700445475622014-03-18T23:54:21.012-07:002014-03-18T23:54:21.012-07:00Nomad -
Thanks so much for weighing in and as impo...Nomad -<br />Thanks so much for weighing in and as important, for logging in.<br /><br />You are discussing the lifetime value of a customer and the value of building a brand through word of mouth PR. Both of those are higher level goals versus what we are talking about here which is a subset of those goals.<br /><br />Let me offer a story as a guide. One year my favorite relatives came to visit me. I grew up with them but hadn't seen them since high school. Anxious to show them a good time, I asked what kind of wine they liked. I was bummed to hear them say the loved pink wine, because I had no pink wine in my cellar. I quickly ran out the back door to Safeway and brought back a mag of Sutter Home White Zinfandel and served that with Asian sweet and sour apps.<br /><br />Relating that to wineries, if I were making expensive Bordeaux, my favorite relatives wouldn't have liked what I made. In the same way, if wineries don't discover to attract the right people to their wineries, they will end up with negative consumer comments on multiple digital platforms.<br /><br />I think attracting the right prospects to a winery will in fact build a brand and they will recommend the winery to their friends. I believe that kind of marketing will increase the lifetime value of a client.<br /><br />As a final comment, Direct to Consumer efforts have improved the ability of wineries to ship directly to most states now. There are vendors like ShipCompliant who can help with keeping shipments legal. Visitors to a winery should be able to have the wine they enjoy shipped back to their home now. They don't have to carry it on a plane. Of course its not a universal comment because there are still dry states, but wineries should at this point invested in solving that situation for their customers.<br /><br />Thanks again for some great perspectives and with that, its time for me to go offline and look at the back of my eyelids for a time. Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-51760522242080197182014-03-18T22:15:08.859-07:002014-03-18T22:15:08.859-07:00Rob, while I think your overall message that winer...Rob, while I think your overall message that wineries should focus more energy on targeting is a great point, I think you are using a statistic that has low correlation. How do you know melon squeezers are bad for business? Isn't word-of-mouth still one of the key means of driving awareness in wine? How do you know melon squeezers aren't sending more customers to the winery? Are you looking at lifetime value of customers are just their likeliness of buying anything on that visit?<br /><br />Marketing and converting direct customers is really, really important. But if I was running a tasting room, this is just one dozens of data points I would look at. <br /><br />Just as an illustrative example, what if you are a winery that attracts more out of town visitors? I.e. people who don't want to lug wine on airplanes or pay for shipping? <br /><br />Also, as mentioned above, the quality of the tasting room staff varies a lot. How do you know that isn't what causes the 35% drop rate?<br /><br />I think wineries need to do some deeper dives including qualitative interviews of visitors, that determine a realistic conversion rate for visitors. This should vary based on the tasting fee, the proximity to major traffic flows, the time of year, the number of staff on hand, the discounts available, the % of club members... then should to use targeting and staff training to beat that goal. <br /><br />Otherwise, you can find another statistic that tells a different story.nomadfromcincyhttps://www.blogger.com/profile/05542083634429685982noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-84225916726662047852014-03-18T17:03:07.859-07:002014-03-18T17:03:07.859-07:00TAV.com - The answer is people shouldn't buy w...TAV.com - The answer is people shouldn't buy wine (or anything) they don't like. It's the proverbial selling ice cubes to Eskimos. The point I think being made here is the sales person wasn't really a sales person and never uncovered what the prospective customer DID like and so perhaps convert a skeptic/non-fan into a happy customer.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-23096879832183352142014-03-18T16:37:07.541-07:002014-03-18T16:37:07.541-07:00Actually, this is a very interesting question - wh...Actually, this is a very interesting question - why should people buy the wine they don't like? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-28803406818906161262014-03-18T13:59:05.043-07:002014-03-18T13:59:05.043-07:00Peter - thanks for the world view and for logging ...Peter - thanks for the world view and for logging in. Really appreciate the industry colleagues from around the globe weighing in with their own thoughts. I'm guessing a University setting could prove problematic for a tasting room and even a $10 tasting fee might be a better use of money for a college student if that means they get a full flight tasting, a place to hang out with their chums, and especially if there are picnic tables - perhaps a place to continue the party. I'd be curious about the impact of texting on that phenomenon as over on this side, parties spring up seemingly out of nowhere with a group text. Interesting thoughts. Appreciate the login.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-80255070628308968062014-03-18T13:53:55.921-07:002014-03-18T13:53:55.921-07:00Some needlessly critical points about the author, ...Some needlessly critical points about the author, and counter-arguments consumer focused comments about the the post can be found on the Wine Berserkers Forum: http://www.wineberserkers.com/forum/viewtopic.php?f=1&t=97312Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-5532700365901982122014-03-18T13:18:19.895-07:002014-03-18T13:18:19.895-07:00Thanks Penny - The etymology of your name is inter...Thanks Penny - The etymology of your name is interesting .... one who brings enlightenment. Another of my many interests is genealogy so names and their meanings are always a curiosity for me. You probably have very interesting ancestors! The McMillan;s I can assure you weren't so interesting when that name was coined.<br /><br />The fix for improving the success rate in tasting rooms is all the above and that includes the comments from all the posters here. We have a long way to go to merge the growing freedom with direct sales with business practices that include an evolving digital world. It is a lot of fun to be here for the ride and I hope the conversations here put a little light on the subject.Rob McMillan rmcmillan@svb.comhttps://www.blogger.com/profile/12396624790174552807noreply@blogger.comtag:blogger.com,1999:blog-941731830705031230.post-58908417572668949972014-03-18T13:16:46.621-07:002014-03-18T13:16:46.621-07:00Hi Rob
Interesting article as always. As you know...Hi Rob<br /><br />Interesting article as always. As you know, we do similar benchmarking of direct to customer sales in Australia, New Zealand and South Africa. A bigger issue is Australasia is groups of people who actively plan to use tasting rooms as a free booze stop. Hen’s parties are the worst. In South Africa, because many wineries are close to Stellenbosch University, you can figure what happens there.<br />What we have found through our research is that winemakers who take visitors by appointment only and who hand sell their wines themselves can be up to 10 times as effective as the old style belly to the bar, bottles on a bench walk up tasting room experience. And they have no overhead.<br />Peter McAtamneyhttp://winebusiesssolutions.com.aunoreply@blogger.com