On Tuesday I was fortunate enough to speak on a panel at the Unified Symposium regarding direct sales. Here was the panel:
Bethany Browning, Delicato Family Vineyards, California
Jennifer Becker, Ensemble Marketing Group, California
Greg Christoff, The Winetasting Network, California
Jim Gordon, Wines & Vines, California
Steve Gross, Wine Institute, California
Paul Mabray, Inertia Beverage Group, California
I was lucky to be included with a great set of speakers.
The overall message was how much should you spend in time and resources to have an off-premise consumer direct program. I also spoke about not only investing money and time, but planning and measurement tools so that you can gauge your success and execute in an organized fashion. We are going to be posting these planning and measurement tools on our new site (another post - coming soon) for free so you can use them to help your success.
However, I wanted to post a few of the more relevant slides for your perusal. Here is a PPT (Unified 07) with most of the slides, contact me if you want our survey on the setup and ongoing costs of off-premise consumer direct.
What I found most frustrating is that people continue to tie tasting room and off-premise (phone, club, ecommerce, direct communications) sales together despite them being very different types of channels with very different skill sets. Additionally, since they associate them, they do not devote the minimum time (18.5 days) to do all the off-premise tasks because the tasting room has to focus on what is directly in front of them. Thus the mediocre results - no effort, not time, no money.
What was also interesting was the financial reward we are associating with our direct sales professionals. In the recent wine business salary survey you’ll see that there was no position mentioned for consumer direct managers and for wineclub managers, the salaries were not great. I asked my wife, a recruiter, how much the average pay for a great consumer direct manager is OUTSIDE the wine industry and it was much more. Again - you have to spend money to make money. However, the burden is on the future consumer direct managers of the world to gain that same level of knowledge and planning and impact on the bottom line in order to command that higher price.
Another item we came across in our interviews was the ridiculous notion of compliance being a variable cost and punishing wineries (see my compliance rant). Every winery we spoke to was very bitter. I say just ignore the states that are very difficult and increase your customer service in states that are easier to reach. Fight tooth and nail against people not helping you build your business and unfair regulations. There is more upheaval in the laws than ever and it won’t settle for a bit. Until then focus It is the Pareto Principle - 20% of your states probably do 80% of your business - focus there. Otherwise you are spending unnecessary time and risk to be compliant against Draconian rules.
I also pointed out the key places wineries lose money when approaching consumer direct sales. Here are the 4 most frequent problem areas:
- MOST IMPORTANT LOSS - NO CUSTOMER INSIGHT resulting in lost opportunities for sales
- Compliance being measured after the fact can cost you customer transactions
- Compliance having to be culled into one source and aggregated
- On average, a winery loses 18% of consumer direct its time in trying to hobble together databases for information analysis and for compliance reporting
- Accounting resources regarding credit card reconciliation and taxation
SOLUTION - Place all off-premise sales in one unified database
- Bad addresses
- Credit cards (expired or not available)
E-commerce and marketing
- Bad emails
- Your tool is NOT collecting enough information (granular purchasing patterns, demographics): every piece of lost data is losing you future revenue
SOLUTION - Institute telemarketing/communications program for “data scrubbing.” Ensure that your software allows customers to self service cleaning data via the web. Unified Database for off-premise sales. Analyze your system, buy a new one if you are not capturing enough information.
- Not having your off-premise tools integrated with fulfillment houses will cause problems with data integrity, customer service, and lost orders.
- Not creating a blended average will reduce sales in key markets and possibly have you overlook opportunities to recoup cost. One of the top catalysts for increasing sales via the web is Free or Flat priced shipping (subsidized).
SOLUTION - Make sure your off-premise direct sales tools (phone (and daily), e-commerce, and club tools) are integrated with your fulfillment partner. Work closely with your fulfillment partner to develop a blended pricing strategy.
- Self serving tools for customers to find order information
- Segmenting your customers to find customers with a higher propensity for reorder
- Rewarding all customers for increased reorder
- Proactive communication
SOLUTION - Create marketing and communications programs for all direct initiatives. Ensure timely responses to customers and strong segmentation techniques.
Feel free to email me with any questions.