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February 28, 2007 | WineDirect Admin

What to do when you don’t have the resources?

Whether personal or professional, not having the resources to do what you “need” to do is really not much fun. It constrains you, it weakens you, and it frustrates you to no end. Despite all of this, do not let it paralyze you. Get creative, get strategic, and you may find that your plans will change between now and when you have the resources available. I’ve certainly experienced this phenomenon at IBG.

Under our Business Development Programs, we strive to provide our client’s with opportunities to increase online traffic, for greater sales conversion, and most importantly, to access new customers. In order to bring a wide array of opportunities to our clients, I need some things to make these programs more efficient.

I need widgets; I need tools; and I need technology to automate the execution of our business development programs. For months now I have had a laundry list of what I need. What I need is relatively modest; it is justified; it is definitely needed, but it isn’t at the top of the list just yet. Why? Well the truth is… Paul Mabray (my CEO) is mean. Kidding, of course. Really, the truth is that every company prioritizes needs in the context of resources available and you move from there. Enhancing our core platform has taken precedence, naturally.

In light of limited resources in the short term, we decided to go ahead and implement a handful of programs in a manual fashion until we can automate. Despite the labor involved, we actually learned a great deal from our manual “tests” and have learned that our programs and technical needs should change.

Some lessons:

Through one marketing partner, we learned that there is an exponential relationship between the number of states a winery ships to and the success of an email campaign. And now, we know that we need a widget to pre-qualify clients based on states for this particular program.
Through a second program, we learned that discounts on wine are good but free shipping is even better. And now, we know that we need a tool that assesses cost to winery for free shipping offers across all states.
And through yet another program, we learned that wine donations are good, but unless there is a follow up mechanism to contact event attendees, the value of your donation is dramatically reduced. And now, we only orchestrate wine donations if there is marketing access to a list in exchange.

The list goes on and certainly we won’t share all of our secrets, but the bottom line is that a lack of resources forced my team to become creative in their execution. For lack of tools, we were forced to sacrifice efficiency and continued to launch our programs. The irony is that in the end, we unknowingly traded efficiency for effectiveness. I will get my technology, but the technical specs are a bit different now and the existing manual programs will become even more scalable with automation. My advice: remember that all is not lost without the resources you need. If you forge ahead, think creatively, and take notes, you just might find the silver lining.

Feb 28, 2007 at 12:02 PM

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February 27, 2007 | WineDirect Admin

Thinking out side of the box…

There are many times in life where we hit this preverbal wall and really don’t know where to go next. There are times when we sit in front of our computer, knowing that we should be able to pass on the knowledge that lives in side of us from our pasts, but come up with nothing. We all experience this and we need to be refreshed with new ideas. We need something that is out of our box and rekindles our imagination and brings the joy of what we do back to life. My goal in today’s blog is to rekindle your imagination and give you one, out of the box, idea that you might be able to use wherever you might be.
For those of you that are avid readers of this blog, know that there are very creative ideas that run throughout these postings. This is simply meant to jumpstart your creative juices and I hope to hear back from a couple of you as to what this leads you to.

Here is the setting… we live in a generation that lives and breaths online. We have companies that are being sold for a lot of money just to share videos of each other’s lives. For those of you who know Youtube.com, it has become a free median for anyone to use for their liking. My question is, what is stopping you from using it?

Here is where I hopefully get your creative juices starting… You have the ability to put together a video of any length to promote your winery to over 2 million views for no charge. A video that would lead these viewers directly to your website. For those that are not able to come to your tasting room, even though they might be a club member, you can send the tasting room to them. Think about virtual tastings!

Here is the example… Mi Sueno winery decided that they would like to get a video of their winery up, but not just on youtube.com, but also on their site for everyone to see. The beauty of youtube.com is that they provide you with an “embedding code” which allows you to “embed” the video directly into your site with out your customers having to deal with the typical load time that you usually experience with most websites. All that needs to happen is for you to cut and paste this code into a simple CMS block on your website. Check out Mi Sueno to see what the finished product looks like. (Be sure to scroll down the the video.)
Now here is the fun part, don’t stop at just one. Get a rhythm going, use you imagination and give your viewers a reason to come back time and time again.

I look forward to hearing how you have used this example to really step outside of the box for your winery!

Cheers and happy Youtubing!

Feb 27, 2007 at 12:05 PM

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February 26, 2007 | WineDirect Admin

Author Focused Content

I just got punked by Google. I followed a link to google gulp and read intently about the line of soft drinks that Google is marketing. Then it hit me - the whole thing is a hoax. A elaborate (and hysterical) joke perpetrated by the folks at google. Why did they do this? Why spend time and effort designing a promotion for a product that will never exist? I’m guessing they did it for fun.

Usually I talk about user-focused content: making sure that what’s on your website is meaningful and useful to the site’s visitors. But google’s hoax made me think about what would happen if I turned that idea on it’s head. A hoax is useful to nobody. In this case it was probably just a way for some coders to get their kicks. Strangely though, this hoax and others like it strengthen Google’s brand by solidifying the personality of the company and its product.

So how about generating some Author Focused Content? Something on your site that is just for you. When was the last time you had fun coming up with content for you web site? Have you ever published something on your winery’s site just for kicks? If the answer is no then your site may not say as much about you and your product as it could. The beauty of the web is that it allows you to publish content and then edit it. Content editing tools like our own ReThink Engine make this easy. This means that you can say whatever you want on your site and then change or delete it later.

Give it a try. Add a paragraph to one of your site’s pages that has nothing to do with marketing your wine. Say something about your business that really means something to you without worrying about whether it’s going to sell your product. I know, everything on your site is meaningful to you. But does it make you laugh? Or excite you? Or make you feel something other than a vague sense of pride? If you want to let your customers get to know you try forgetting about them for a little while.

Stay tuned for my next post: “that’s enough of that - now get back to focusing on users“.

Feb 26, 2007 at 12:08 PM

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February 23, 2007 | WineDirect Admin

Spring Cleaning

Though we’re still experiencing some rain here in the valley, as I look out my window I’m seeing signs of spring all around. Personally, I’m looking forward to the warmer weather and longer days since my triathlon training starts this weekend (which I’m sure will end up in my blog at some point)!

With this change in the seasons, I inevitably end up feeling like I need to “clean house” and get organized. What about you and your business? Feeling like to you need to do some cleaning and organizing as well? Things will only get more hectic as your club shipments start going out and your tasting room gets busier, so why not take advantage of this “slower” time and start with your most important asset - your customer and contact lists!

Now I know this might sound daunting, but believe me, you’ll save yourself some valuable time in the long run! The first thing to do is prioritize - I’m sure you’ve figured out that your club member lists are the place to start. This should be an easy exercise as you probably know many of them by name. Just check to make sure you’ve got all their information - shipping address, billing address, credit card (is it getting ready to expire?) and a current phone number. Not sure if it’s current - call them (I highly recommend this personal touch whenever possible) or send them an email asking them to update their information online, or contact you if anything has changed. When you get ready to process your clubs you’ll be glad you did, and so will they! I’ve worked with many winery clients who have thanked me time and again for this advice because they learned the hard way how long it can take to process a club shipment if addresses are wrong or credit cards have changed or expired!

Now that your club members are taken care of, time to tackle your customers. Here again, prioritize! If you’re lucky enough to have a very large customer list, and not nearly enough time to contact them all personally, then segment your list - call your top 50 or 100 customers, or your most frequent purchasers and thank them for their business and let them know you’re just checking to make sure their information is up to date. If you’re really on top of your game, you’ll have checked their purchase history and offer to send them more of their favorite wine, or let them know you’ve got a club shipment coming up and you’d love to sign them up so they’ll be sure to receive it!

For the rest of your customer list, send them an email and let them know you’re doing your “spring cleaning” and want to verify their information. Let them know you’d be happy to send them more wine as well, or sign them up for your club.

Most wineries will stop here - and I can understand that. With all you have to do in a day, it’s hard to find the time to reach out beyond wine club members and customers, but taking the time to reach out to your contact list (you might just have an email address, or a snail mail address) can reap some nice rewards. Though there isn’t much “cleaning” to do here in terms of their information, taking the time to reach out to these contacts a few times a year can help you know when to “clean” them out of your database. And again, you’ll want to prioritize - start with your email contacts since they’ll be the least expensive to reach out to!

For those you have an email address for, send them a note letting them know you’re doing some “spring cleaning” (sensing a theme here??) and would like to keep them on your list, but need a response back to know they’re still interested. Keep those you hear from in a week or two, and delete the rest! Reward those that respond with an incentive to make that first purchase so you can convert them from being a contact to a customer - email them a promo code, or offer an extra gift with their first wine purchase - something simple and small that you can include in their shipment. And for those that do make that first purchase, I highly recommend contacting them a few weeks after they receive their shipment to thank them - it will go a long way to building their loyalty, securing additional purchases, and possibly converting them to wine club members!

For those you have a snail mail address for, consider doing a simple postcard, or if you have the budget, a letter with a contact/order form. Explain to them that you’re moving to an electronic form of communication and would love to get their email address and other contact information. And again, the same rules and rewards would apply - keep those you hear from in a month or so, delete the rest and reward those who respond!

If you can perform these exercises even twice a year, you’ll have much cleaner information, a better sense of who your customers are and a list of customers and contacts that you know are responsive!

Feb 23, 2007 at 12:12 PM

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February 22, 2007 | WineDirect Admin

The Wine Release: Psychology of the Mailing List

Here’s a story you may have heard before:

Winery ‘A’ prepares to release their wonderful nectar of the gods, commonly referred to as Wine. A mailing list is assembled containing names and addresses of friends, family, business associates, and anyone else that may have crossed the winery’s path. Next, an offering letter is composed with information about the current release and the process for ordering wine (an order form often times accompanies the offering letter, although today more and more wineries are ditching the order forms and migrating to an online ordering system). Final step: stuff the envelope, lick the stamp, and drop the heavy stack of mailers into the mailbox. Now wait. And pray.

Hopefully this long list of people will choose Winery ‘A’ amongst the sea of wineries releasing great wine at the same time of year. The fortunate wineries get immediate response to their offering and the orders begin to roll in by the dozens until nearly all of their inventory is depleted. In these rare cases, we see a perfect balance of supply and demand. However, some not so fortunate wineries begin the creative process of moving their product through other channels of distribution, often times at reduced prices. I’ll stop here and save the discussion for what makes a “healthy” channel strategy for another blog topic.

For the purposes of this blog, I will refer to wineries that fit this broad profile as “Mailing List” wineries. In analyzing the business practices of some of the more successful “Mailing List” wineries, I have come to understand 3 basic principles that make for a successful DIRECT sales strategy. The first two principles below are commonly used across wineries of all shapes and sizes; the third, I have found, is common only to a select few in our industry. These principles rely on the assumption that wine quality is NOT the primary point of differentiation (if you intend to adopt this approach to sell your product, you better be on par with the upper tier wine brands in your varietal category, appellation, etc.) The three basic principles are:

1.Exclusivity & Limited Availability
2.Relationship with your Customer
3.Conditioning of Purchase Behavior
The first principle above, Exclusivity & Limited Availability is obviously a combination of two important, but inter-related concepts. A ‘Mailing List’ customer is primarily interested in being part of a small sub-set of wine consumers that have ACCESS to your wine, which is in short supply and therefore limited to a “small” group of people (every winery has their own definition of a “small” mailing list).

The second principle, Customer Relationship, is key to ANY strategy for delivering your product DIRECT to consumer. The most successful wineries carry on a relationship with their mailing list customers throughout the year. Often times, rewarding your mailing list customers with private events or special gift packs/bottle formats in a supplemental offering can be the best way to cement share-of-mind for your wine brand. If you only reach out to your customers once a year to announce the release of your wine, then you better have one hell of a value proposition in the bottle, because more often than not they will become tired and move on to the next new thing. At the very least, a simply email/letter saying hello will remind your customer why they belong to your mailing list community.

The third principle applies to how you position your offering and more importantly, how you establish the “rules of engagement”. Many wineries will have the same questions when starting out: How much wine should I allocate to each person on my list? When is it appropriate to drop them off of my mailing list? These questions need to be addressed in your DIRECT strategy and specifically how you intend to condition the purchase behavior of your customers. While there are various approaches to this principle, the most important element to this strategy is to allocate accordingly so that you retain the “Limited Availability” of your wine. Specifically, a ‘Waiting List’ is as important as a ‘Mailing List’. Simply put, healthy demand is generated by creating the perception that your wine is just out of reach. Another key component to this strategy is to establish a reward (and penalty) program for customers who purchase (or don’t purchase) your wine. Again, while there are several ways to tackle this, I recommend rewarding customers who continue to purchase their FULL allocation each year, by graduating them to a higher tier/customer segment in your ‘Mailing List. The top tiers, of course, we receive accss to exclusive, small production wines and a larger allocation. This process will inherently establish the rules of engagement, without having to specifically communicate this concept to them.

Most importantly, for those customers who do not stay active and continue to purchase your wine each release/year, it is VERY important to communicate the behavior that will allow them to stay off of the ‘Waiting List’. Wineries do this in many ways, but at a minimum, you should expect your active customers to purchase wine at least once a year. Of course, it is up to you to decide if customers who simply satisfy the requirements to stay on the list by purchasing one bottle per year will warrant the same allocation each year.

I personally signed up for many, many mailing lists (and waiting lists) this past year and will choose which value proposition is the most appealing (no suprise - 90% of the mailing lists are Pinot Noir producers). I personally have loyalties to certain wineries that are particularly good at maintaining good relations. After all, there is no substitute for good, old-fashioned customer service.

Feb 22, 2007 at 12:15 PM

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February 22, 2007 | WineDirect Admin

Building upon your current database

Maintaining your customer database is important, adding to your database is even more important to build relationships and increase sales.

Obviously, the easiest way to add to your customer roster is to obtain this information at the tasting room while customers are tasting.Most wineries keep a signup sheet handy so you can gather their contact information and add them to your newsletter or email them regarding promotions, new releases or invites to your wine club and future winery events. The key information is an email address, and current phone number as well as a mailing address. Or have small cards printed up where the customer can provide feedback as well as leave contact information. If they purchase from you while in the tasting room you can obtain this data and ask that you may contact them by email with future promotions and new releases.

Another obvious method in obtaining this important information is from winery sponsored events and gatherings. Bring the same signup sheet or comment cards and request the same information for the same reason. Follow up with an email or phone call thanking them for visiting your winery or event and include any promotions you may be having at the time and always include your website address so that they may log onto your site and complete their customer account information with credit card and shipping address.

Another tried and true method that even I forget, ask for contact information for 10 other friends or family members that may be interested. If your current customers enjoy your wine and visiting your winery, ask to share the experience with someone they know! You will be surprised how many people are receptive with sharing this information (especially if they just LOVE your wine and staff). This is an old school method that is tried and true but we now know it as viral marketing. This works best if you provide an incentive or already have a great relationship and constant contact with the client.

Probably the easiest way to gather this information is to invite them to visit your website (albeit passive) and use your contact us form, you do have a contact us webpage, right? And when they do sign up, keep tabs on those who signup and thank them, and make sure you have a newsletter to send.

Feb 22, 2007 at 12:13 PM

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February 16, 2007 | WineDirect Admin

Direct to Trade IS the future

If you don’t feel it yet, the wine industry is not an easy place to do business. The competition is growing at an extraordinary rate, not just domestically but internationally. The nature of the three tier system and its increasing consolidation makes market access tremendously difficult. Moreover, by its own nature, the economics of the three tier system are fundamentally flawed against small and medium sized wineries and especially against unknown brands. Wholesalers, by nature, are limited by the capital risk to purchase wines (and smaller producers wines generally are at a higher cost), transport them, store them, and they place value on products that have market pull or higher velocity of sales. Do the math; a wholesaler having to sit on 28 cases of a 225/case FOB of Paul’s great wine that depletes over six months is less interesting than a wine that they buy for $98/case and sells 600 cases in 6 months.

Why is Direct to Trade (or as Steve Gross calls it, “Self Distribution”) is accelerating? It is a result of many key drivers:

The strong winery adoption of Direct to consumer as a key channel.
The Supreme Court Decision regarding wine shipping with the Commerce clause as the key constitutional right.
The broken (and getting worse) three tier system limiting market access yet with an extraordinary consumer and trade demand for differentiated products. Especially in regards to restaurants whose three key points of differentiation are their food, their atmosphere, and their wine list.
Costco initiating the fight to buy Direct to Trade in the state of Washington.
Technology improving at an incredible rate the will enable complex regulations to be solved through programming.

What is Direct to Trade? It is the ability to directly acquire trade, restaurant and retail, customers in a market and be able to interact with them in an on-going and real time basis. The winery for the first time has the ability to directly acquire restaurants and retailers as their customers. Imagine what this does for the winery:

You can actually capture the customer and market to them other products or when your next vintage comes out.
You can directly tell the customer about promotions, winery news, and create a relationship. Customer relations is the key to ALL direct sales (both DTC and DTT).
You have real account sold information in real time!
You can allocate wine to accounts instead of hoping the wholesaler will place them where you want. You control your placements.
You can sell your wine to the market at what the market will bear. How many times have you told your FOB to a wholesaler and he told you that he needs to buy it for less or needs you to put together an extensive discounting plan.
You can meet restaurants and retailers at shows, your winery, or at a social event and electronically take the order there. No more will you have to say, “sorry, I don’t have a wholesaler in your market.”
When you decide that your volume warrants a wholesaler, you can bring them a universe of customers that already buy your products as a baseline for their market development.
Instead of regional focus, the internet can become your sales team and the entire state or country will be exposed to your products.

Ironically, you as a winery are already familiar with Direct to Trade sales. First, in your local market, you probably sell and promote your wines. Napa wineries are extremely good at selling and promoting their wines within a 180 mile radius. The same is true for all wine growing regions in the US. In Arizona a large portion of their states production is sold within state.

However, even if you have a wholesaler, you still essentially sell Direct to Trade without the benefit of gaining the customer. Two words - “ride along.” Almost every single winery has a sales force super-imposed on the wholesaler tier to assist them in selling the winery’s product.

Why is Direct to Trade so important to small wineries? There are so many reasons but I’ll try to distill it to the two most important: capturing the customer and market access. The current three tier system prevents wineries from acquiring customers and especially from being able to enter a market. Those problems are compounded by an environment of increased competition making the ability to interact and leverage customer relations one of the most important factors for success. Direct to Trade solves this problem by putting you together with your customer. Remember, it is easier to retain a customer than to acquire a new one. Without this ability you as a winery are recreating the sales cycle every vintage and every release. Don’t forget that most restaurateurs want a relationship with you as much as you want one with them.

Unless you focus on direct, you are dependent on others for your success. A success that is absolutely not guaranteed (I can tell you many stories of me working with a wholesaler who lost the one rep who loved to sell my wine and the next year I experienced dismal sales).

If you doubt the Direct to Trade channel you should look back in time when everyone questioned the Direct to Consumer channel. Look at that channel now . . .

Direct is the revolution - be part of the revolution.

Feb 16, 2007 at 12:18 PM

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February 14, 2007 | WineDirect Admin

I Didn’t Know You Could Do That!

File this blog dispatch under, “General, Marketing” and “I didn’t know you could do that.”

Here at Inertia we’re on record as continually emphasizing the basics of building direct sales and customer management, executing a wine club thoughtfully, segmenting high value customers, providing differentiated value and skillfully managing all of the small day-to-day nuts and bolts that build customer loyalty and allow any small business to run crisply.

We do not typically advocate flights of marketing fancy; quite the contrary, actually. Just the same, it is kind of cool and as Internet experts ourselves, it’s interesting to highlight other pioneers doing interesting things via the Internet.

Spot Runner is an Internet-based ad agency that makes it easy (read: relatively inexpensive) for local companies to advertise on television, nationally even.

Did you know that a Napa winery could run an ad during Fox News in Naples, FLA for $150 bucks? Or, advertise on the History Channel in Ft. Wayne, IN for $53 or on MSNBC in Utica, NY for $14?

Everybody has seen the local commercials in our market—usually it’s car dealerships or hot tub superstores, local jewelers and the like … local spokespeople that become minor celebrities with some notoriety based on their omnipresent presence on television commercials. But, what about taking some of that local charm into other markets?

This local and regionalized phenomenon is being coupled with the explosion of video on the Internet and in particular the pro-amateur movement of using YouTube, Yahoo! Video and others as a launching ground for real user-generated commercials.

Recently, Doritos snack chips ran a consumer commercial contest and the winning commercial was featured during the Super Bowl.

Dove body wash is doing the same thing and premiering customer created commercial during the Oscars later this month.

The Super Bowl and the Oscars? These are hardly shrinking violet exposure opportunities, even if these are campaigns run by large consumer brands.

Spot Runner is a bit different than the YouTube phenomena in that they won’t run *any* created ad—they in fact have created the ads that can be customized to your business, a winery for example.

I did a search for “wine” and they have four or five commercials that can be customized with winery specific voiceovers, logos, etc.

After the stock customization, anybody using the Spot Runner services would define their criteria for where they want to run the ad, their budget and their desired reach by demographics and Spot Runner puts together a campaign within the requested budget.

If you have a wine club with a density of members in Naples, FLA you could do television advertising to capitalize on what might be a robust market for your wines, driving sales to your web site.

And, other business development opportunities presumably exist, as well, if especially if you’re using our Direct-to-Trade initiative to cultivate placement in a specific market.

I suspect that Spot Runner recognizes the clear trend in user-generated content and is readying a means to exercise quality control in line with FTC standards and their own benchmarks for quality so that they can offer a winery, or any customer the opportunity to buy media inventory with a more customizable commercial solution.

While we’re not advocating this approach for our winery customers just yet, and legally some state-by-state vetting may have to be done for a regulated industry like wine, it’s hard not to be interested in the potential future possibilities to enhance customer and prospect mindshare inexpensively in melding an online and offline marketing plan that can ultimately drive more wine sales for your business.

Like I said, file this one under the “I didn’t know you could do that.”

Feb 14, 2007 at 12:59 PM

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February 12, 2007 | WineDirect Admin

Don’t Fear The Floods

The last few days have brought a lot of rain, and unfortunately where I live, have created many problems with flooding. As you know, a flood can sometimes be labeled as a disaster, and depending on the situation can leave destruction in its wake. Is your winery prepared if a disruption occurs to your daily operations? Be proactive, and limit the impact by creating a recovery plan now.

Although there are many elements to add to a disaster recovery plan, listed below are a few basic factors to help get you started:

Create weekly data backups and store them off site, in a remote location, to help minimize data loss.
Use Surge Protectors for your equipment such as PC’s, copiers and faxes.
Install an Uninterruptible Power Supply (UPS) to minimize the effect if a power outage occurs.
Purchase insurance and a warranty for your hardware.
Complete an IT Asset Inventory list and include the supplier’s information along with the maintenance and service agreements.
Write an Operation Procedures Manual and include instructions for getting your business back on line.
Test your recovery plan to see if it will work and schedule a practical implementation to see what changes, if any, need to be made.

Remember the focus is on recovery and reducing the risk of impact. Think about what percentage of your business is mission critical and concentrate on restoring that component. Develop a strategy, select others within your organization and train them on implementing your plan. These few measures will help protect your business and ensure continuity should a disaster occur.

Feb 12, 2007 at 1:03 PM

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February 8, 2007 | WineDirect Admin

Boutique Wine Cellar Wants to get Wine Lovers Talking

We’re happy to announce the launch of our newest business development partner, BoutiqueWineCellar.com. Its founders have created a social marketplace for consumers to browse, review, and buy boutique wines. BoutiqueWineCellar.com has chosen to partner with IBG to provide users with not only great service, but fabulous wine. The Marketplace provides consumers with one web address for browsing, reviewing, and buying boutique wines directly from the wineries that produce them.

Our clients were given the opportunity to be featured on the boutiquewinecellar.com site for its commencement. An intense screening of the wines yielded many small-lot wines with limited quantities to be sourced on the Marketplace. Just try to find them somewhere else! Membership is free, and allows registered users to write reviews and share wine recommendations with friends, the wineries, and one another. In addition to buying wine, and voicing their opinions about wines they have tasted, the Marketplace provides wine-makers and consumers the chance to interact virtually, where distance may have otherwise prevented the opportunity.

BoutiqueWineCellar.com provides Member Wineries with increased sales in their direct-sales channel, as well as escalated brand awareness. Member Wineries will have the ability to add wines at any time allowing for real-time inventory display to the Marketplace. After a wine is submitted to the Marketplace, it goes on display for consumers to discover, review, recommend, or buy. All sales are transacted within each winery’s online store, so all customer information is captured and stored with the winery.

To see the site in action, please visit http://www.boutiquewinecellar.com

Cheers!
IBG & The Boutique Wine Cellar Team

Feb 8, 2007 at 1:06 PM

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