Do you really understand the Value of your Club?
Most wineries fall into a trap of thinking their wine club revenue is simply the number of members multiplied by the cost of the shipment. If that’s all you are looking at, you’re letting money slip through your fingers!
There are four things to think about when you are putting a value on your club:
- View your club shipment as a sample program and get your club members to repurchase the wines you’ve just given them the opportunity to taste.
- Know your average decline rate (for club runs) and keep it under 10%. Clubs that are managed well have lower decline rates. If you find that your club’s decline rate is higher than 10%, you have some cleaning to do. Implement a deactivation plan for those members who are continually non-active and a three-strikes-and-you’re-out clause for perpetual declines.
- Have a repurchase plan and execute it 2 weeks after your club shipment has been sent. This reminds your customers to purchase the wonderful wine they just consumed. More often than not, wineries condition their members to wait for their shipments - and do nothing else. Successful wine clubs condition their members to open and consume the shipments they receive so that they know how many bottles/cases they should repurchase.
- Understand and increase your club member value. Keep track of all the purchases your club members make: in the tasting room, online, over the phone, and with club shipments. Once you know the value of a club member you will have a good idea of what an increase in membership will do to your revenue stream. This kind of knowledge will help you plan for Club specific events, loyalty programs, etc.
We encourage you to take the time to evaluate what your true club member value is and set goals to increase both your membership and their re-purchase rate. Remember that the more accurate your club membership is the better you are able to successfully market to active customers and continue to increase your bottom line.