Can You Succeed in the Wine Business Without CRM & SM?

You are a with-it kind of person so you probably recognize the acronyms in the title stand for Social Media and Customer Relationship Management. You are so together, you probably have your Facebook and LinkedIn accounts with more than 500 of your closest friends and colleagues connected. You have a Klout score. You have a smart phone and check in with Foursquare at every occasion. You’ve even started tweeting twice a day about such fascinating things as, "Happy #FF" and "Isn't it a beautiful #DAY all my peeps." And the result of your social dalliance with SM on growing your sales is?..... Absolutely Nothing. Nada. Zip. Zilch. Zero. What is going on? Where are all those Millennials who are supposed to be Tweeting up a storm and rushing to your door. If you do Social Media, they will come! ...... won't they?

Social Media

As far as the Millennials are concerned as you may have read from some of my other writings, they aren't beating a path to your cellar door. Why? Because while they are the future consumer, today they can't afford your wine if your shelf price is over $20.  You could have the coolest, edgiest and most current tasting room experience in the world today; even play Techno in the background but the best you will hope to do is attract a young wine tasting crowd. You aren't attracting wine buyers in Millennials.

Millennials are wine drinkers but not really fine wine consumers. That's an urban myth as you can tell from the chart at left using Nielsen data showing total wine consumption sorted by cohort. Even if you were perfectly executing your digital strategy aimed at wooing Millennials, you will fail in growing sales because you set the wrong objective. Millennials will be a huge consumer group starting in about 2020, but not today. Does that mean you should dump your Social Media strategy? Absolutely not! But you need to better understand who your real customers are and how they communicate, then target consumers who will buy your wine today.

Customer Relationship Management

 

If you use CRM and study your consumers, you might be surprised to find they all are into Facebook and smartphones - but still have the money and desire to buy your wine. If you don’t know their tastes, how are you going to sell them what they want? If you don't know how to reach them - email, text, phone, IM, etc., how will they know what you have to sell?

In this market, the wineries that will do best will be those that devote time and resources to developing customer level preference information and embed curiosity into their culture. Some questions you might want your customers to ask might include:

• How do you prefer to be contacted by our staff?
• Why did a club members leave?
• How old are my customers?
• Do younger buyers purchase different SKU’s or prefer different style wines?
• Do they like to come to consumer events, or do they really prefer entertain at home with my wines?
• How often do they buy? 
• Are older buyers purchasing more than younger buyers?

What’s at stake? Figure 16 from Silicon Valley Bank's Annual State of the Wine Industry report displays the adoption of technology specifically in the smartphone segment. (Click on the figure to get a better view.) Looking at the chart you can tell more than half of smartphone users are in the target wine producers prime demographic; above age 35. But when income is added to the mix, the result is more dramatic as older subscribers with higher incomes are more likely to have a smartphone. Those 55-64 making over 100K a year are almost as likely to have a smartphone as those in the 35-44 age bracket making $35-75K per year. That is the wine producer’s prime demographic audience. Are you as a wine producer reaching that audience?

M.J. Dale - Unnamed CRM Expert

CRM and information management on the other hand is a must when dealing with your sales and marketing plan. There are many ways to collect data, including asking the sales force to collect information from their drive-arounds, asking tasting room staff to do verbal interviews, using highly-evolved CRM tools, and taking advantage of inexpensive or free online survey tools that wineries can employ. It’s somewhat ironic that as we push deeper into a digital existence, it only emphasizes the need to return to the fundamentals of knowing your customer. Fortunately, tools are finally emerging that help us understand and properly scale client experiences so we can deliver seemingly individualized experiences in groups of communications. I've asked an unnamed CRM expert to come and guest blog in the next few weeks to give a deeper dive into the topic.

The Dominant Competitive Issue

The dominant competitive issue in the fine wine business isn't making wine. It's not getting the best price for your grapes. The most important issue that defines a winery's success is sales and marketing. CRM and Social Media have a large part of any effective plan today. But specifically with respect to Social Media, my recommendation is to get in the game and experiment. Don’t over-commit scarce resources, but do develop a thoughtful approach to what you want to do, how much time you can afford to spend, what good measurements for success are, and develop a feedback loop to evaluate your successes and failures on some schedule. Are those who buy my wine using social media? What is the most a given age group paid for a bottle of wine in the last six months? The list of useful questions is endless and each drives at actions that can be taken to improve sales and marketing.


Today with the convergence of technologies, every serious wine producer has to begin to understand and employ digital tools and consider integrating those with other platforms to improve the direct-to-consumer business.

What are your experiences with CRM and Social Media adoption?