Karin Ballestrazze
April 16, 2014 | Customer Relationship Management (CRM), eCommerce | Karin Ballestrazze

Focus on customer loyalty to increase online wine sales

Customer loyalty is essential for maintaining high levels of online wine sales, but it's harder to keep clients happy in the digital era. According to a recent study from BIA/Kelsey and Manta, many small and midsize businesses have recognized loyal clients as a continuous source of revenue growth and invest in building the relationship. Multiple reports have demonstrated that customer acquisition is more costly than retention efforts, and the gains from new clients aren't as significant as loyal customers. In addition, satisfied shoppers are a great source of referrals. This can help you get new business without raising acquisition costs.

Loyalty is more important as retail increasingly moves online. The continued success of your online wine store depends on forming lasting relationships with clients and getting repeat business. However, some businesses try to encourage repeat purchases by implementing generic loyalty programs, Fast Company reported. For example, customers make nine purchases and the tenth is free. These reward systems use free or discounted items as an incentive to shop instead of emphasizing a high-quality experience. Customer service is the best way to create true, lasting loyalty, and you need to offer consistent experience through every channel.

Importance of having the right loyalty program
While businesses understand how lucrative their relationships with existing customers can be, many don't know how to market to this segment, the BIA/Kelsey suggested. In fact, two-thirds of the companies surveyed didn't have a loyalty program. Of the 34 percent of companies that did, more than half were using outmoded channels, such as paper or word-of-mouth programs. This type of loyalty builder doesn't have a measurable return on investment. 

For wineries looking to increase their direct-to-consumer sales or moving into selling wine online for the first time, existing customers will most likely make up the majority of revenue. Because these clients already trust and have a familiarity with your brand, they will be more receptive to upsells and cross-sells. The Internet has amplified word-of-mouth advertising with social media and online reviews, making loyal shoppers a great source of cost-effective referrals. However, your loyalty program needs to be tailored to customers' needs and preferences.

Tips for fostering loyalty
Even if your winery utilizes a primarily digital loyalty program, you still need to make personal connections with customers. Wine marketing needs to account for emotions to have a real impact of consumers. Although a great deal of client communications now take place online - especially for ecommerce businesses - customers want to feel like they are speaking to an actual person, according to iMedia Connection. The article suggests that emotions, particularly when it comes to warmth and perception, drive the majority of consumer behavior. Emotions mostly have not changed, despite the evolution of ecommerce. 

Instead of just having a loyalty program, excellent customer service can act as a competitive differentiator, Fast Company said. Even if clients have trouble ordering wine from the website or receive an inaccurate order, the opportunity for loyalty isn't automatically lost. Providing a solid resolution to customer issues can increase satisfaction and lead to lasting loyalty. 

Additionally, the BIA/Kelsey report suggested asking customers to opt in to loyalty programs. Retailers shouldn't assume that all shoppers will want to take part. Engaging the clients who do subscribe regularly through email can increase the effectiveness of the program. Email is a highly effective channel for boosting loyalty because it reminds customers of your brand. Depending on your winery, the right mix of strategies may be most relevant for your loyalty program. 


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