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August 30, 2007 | WineDirect Admin

Web Trends (From the August 24, 2007 Direct Sales & Marketing Symposium)

Last Friday, August 24, 2007, Aaron Ruteledge, one of the original founders of Inertia Beverage Group, discussed trends—why we find them and what the latest trends are.

For those who were unable to attend, following is an overview of the presentation.

Five Fresh Trends

1. Harness the power of crowds. Take a big, active user base and make something productive out of it. Get users to participate. Give them the raw material to have these conversations. Get involved with the conversations, and make the conversations more human.

Example: CORK’d (www.corkd.com) is a social network that allows people to share their opinions about wines. Users keep their own personal tasting notebook, and people can agree or disagree with one another. Users own their information and have control of their content, meanwhile, people are learning through the conversation.

2. Just let go. The wall of content is crumbling. Let knowledge leave your site. Allow people to share information. The things you write about — put it out there. Keep a blog so the people can access this information and re-associate it with your brand. Let other people use the information, making it more valuable. Encourage people to blog, discuss, and share your content.

Example: RSS feeds. RSS feeds allow people to subscribe to information, so they get alerted when something new comes up.

3. The long tail (based on Chris Anderson’s book). Technology allows us to push products that we were not able to push before. Shelf space was limited to popular items with bricks and mortar retailers, however with online retailing, everything costs the same to market.

Examples: Amazon (www.amazon.com). Amazon really has everything anyone wants. They’ll have that one part that you need. One-third of Amazon’s profits comes from one-time use sales.

Google (www.google.com). Google allows you to find the most intricate niche content.

Radcru (www.radcru.com). Radcru goes out and finds small brands and pushes them to the front.

4. Give and give often. The web is moving towards a real-time platform. Update a little piece of content. Update a piece of messaging. The leading sites strive to keep attention by providing unique content on a frequent basis.

Example: Wine Library TV (tv.winelibrary.com). Gary Vaynerchuck turns his personality into a daily video about something he is really passionate about. He uses the web as a daily entertainment platform.

5. Convergence is real, but nobody thinks about it. All these channels: TV, print, web, mobile – they’re all converging. Consumers don’t think of it as separate channels. To them, it’s all one big thing. No matter how you communicate or interact, it’s all one thing to them. The web is moving outside the browser now. E-mail, SMS, IM are weaving into everything. Create a seamless journey across all of them.

Example: Wine Woot (wine.woot.com). Wine WootBranched out of Overstock.com. Everyday at midnight they sell one product for 24 hours. Everything has the same tone of voice – webpage, RSS feed, or mobile.

Why find trends?

1. Trends give us a point of view. The more you understand the trend, the more you’ll have a better point of view.

2. Point of view leads to inspiration and innovation.

3. Inspiration and innovation leads to the development of new products, services, and experiences.

Aug 30, 2007 at 10:48 AM

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August 30, 2007 | WineDirect Admin

Who has the power in today’s market - producer, distributor, retailer, or consumer?

This is the age of consolidation. From retailers to producers to distributors, everyone is banding together to form large marketing and sales behemoths to attack the consumer. And under attack the consumer is. From their perception of appellation to whether or not they like the label, consumers’ attention is being pursued – for the ultimate prize of the dollars from their wallet. And that leaves the consumer in the most powerful position, as the point of final purchase.

While some might joke that the only real depletion is the flushing toilet, in actuality it is the ring of a retail cash register. This register can be a physical object in a retail store, a tasting room, or a virtual e-commerce shopping cart; the available channels to the consumer are broad and widening further. The most traditional channels for generating sales for a winery’s products are at their cellar door, to a restaurant or retailer directly, or through a distributor, with the consumer being limited to the wines only obtained between one of these “gatekeepers.” Now, with the advent of new uses of the internet, changing regulations, and a bevy of e-commerce sites, the consumer has increased access to wine. And this is the key – increased access to wine for the consumer increased their power to making buying decisions.

But it doesn’t stop there for the consumer. Wine drinkers today are experiencing the ability to generate their own marketing for a wine brand, to think about the product from what they experience in the glass as well as what they hear from the society around them. No longer does the winery have the sole ability and responsibility for generating the branding message. Consumers at large are creating their own. This is evidenced by wine review social networking sites like Snooth, Vinquire, Cork’d, and others. Here consumers create their own reviews and comments about the wine – from things like how the wines taste to where the wine was consumed, even up to the point where the consumer is making their own video reviews.

So if control is power, the example afore mentioned is one chink in the armor of the producer. And producers have seemingly relinquished some of their power into the tournament of jousting consumers. Large wineries like Coppola have created online promotions where consumers produce their own video advertisements for Coppola’s major brands Bianco and Rosso. This campaign is an example of a winery allowing the consumer to manufacture their own personal marketing message. So, in a sense, wine drinkers are telling each other what to buy – the ultimate power play.

So where do retailers stand in terms of their ability to dictate consumer purchasing. They used to manipulate buying patterns by dictating the number and type of wine SKUs offered on their shelves. Large retailers like Tesco and Costco continue to shrink their inventories, limiting selection for the consumer, thus limiting purchasing to a few select wineries they have chosen to represent. But with increased consumer access to wine through the internet, the ability for large retail to be the single or best point of purchase is diminished. Sites like the LondonTimesWineClub.com provide discounted wine offerings, exclusives and limited bottlings, and professional endorsement by Hugh Johnson – all the things on which large retailers hang their marketing hat. The only advantage a brick and mortar store like Tesco is immediate access. Research has shown, however, that the majority of consumers do not bias against ordering online because of shipping rates or time of delivery.

Retailers have their own problems with access to wine because of the distribution system. In the United States, the three-tier distribution system put in place after Prohibition gave a large amount of power to distributors. They were given rights to sell alcohol to restaurant and retail businesses within state boundaries. And their rights even go so far as to have the franchise on a brand within certain states like Alabama. So retailers are stuck, only being able to offer wines sold by regional distributors. But with new Supreme Court decisions like Granholm, consumers are being allowed to by more and more wine direct form the producer or from other sources, and this benefit is trickling down to restaurant and retail, too. With programs like Inertia’s Direct-to-Trade program, retailers and restaurateurs are able to buy wine direct from the winery. With this new access, distributors’ ability to dictate supply within state borders is weakened.

And in other countries, distributor’s power is being lessened by online retailers. With the creation of the EU and the Euro, the ability to sell wine product outside of the countries borders is being increased. But in certain countries, the government, acting as distributor, still exerts a lot of control over inventory and access. Sweden, for example, continues to limit the ability of wine to be imported by controlling purchasing, requiring specific labeling practices, and imposing heavy import taxes. Russia has a similar program, too. But this example is the minority, not the majority. And as consumer’s power continues to increase and their ability to exert political pressure on their governments, consumers will continue to increase their access to wine even in these limiting countries.

These are exciting times for wine consumers. Their purchasing realm has increased in size. Wine drinkers everywhere are experiencing an increased ability to find wines they want to drink, to talk and market the wines they love, and to spend their money only on wines that they enjoy, for whatever reason. And as the tools of e-commerce increase in ease and number, the power of the consumer will just get greater. The world marketplace is just beginning to feel it.

Aug 30, 2007 at 10:46 AM

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August 29, 2007 | WineDirect Admin

Why wineries really need to care about their online content

You’ve heard it before: “On the Internet, content is king”. Okay - so what does that mean? A website’s success is closely dependent on the amount and quality of its content. Yes - that’s true, but it’s not the whole story. The message here is that content is the first weapon you compete with in the age of web 2.0.

The comforting thing about this is that you control your content. This is empowering because it means that you are now less dependent on what a loud few have to say about you – you have the opportunity to contribute, knowingly or not, to any discussion on your brand. Your online content will greatly influence how your brand is represented online.

In today’s over-saturated wine market, getting shelf space and editorial coverage is quite the challenge. The race is on to gain more exposure and acquire new direct customers. As Inertia is proving to its clients, technology is enabling new ways for wineries to sell more direct and increase the exposure of their brand. How you set-up up your content /data / product information is crucial in this race – one could argue that it is almost as important as the bottle containing your wine.

Let me borrow a brilliant analogy from Ben Chinn. Let’s say your website is like the wine bottles that you lovingly produce. Your website’s content is like the actual wine in that bottle. The website’s design is the bottle, the label, the closure, etc. The care you put in setting up your content should mirror the care you put into making your wine. Just as bottling is a crucial part of your production process, properly creating and setting up your product information and online content is vital to your sales and marketing efforts. No matter how good your wine is, if the bottle is ugly, many will shun it. The same goes for your content; if it is lame, short and hard to sort out, few will look at it and be interested in your wine. Just as winemakers display maniacal care when bottling, the same care is needed when you create and set-up your content.

For your content to reign, it must be:

Complete. More is better when it comes to wine. You do not know in advance what will make consumers tick, so give them as much as possible. Lay on information on brix at harvest, let them know the pH of your wines, dare to say you used Hungarian oak.
Accurate. Don’t recycle information just to fill out fields, be honest or risk being found out. If you are releasing a 2-year old vintage, don’t say it aged 36 months in oak.
Searchable. This is the crucial factor in allowing your content to be propagated to all. For anyone to search detailed information on wine, your wine information must be categorized. This means that you must use all available data fields built in your database. Don’t’ bundle up all the information in one place, make sure that each bit of information is categorized so it can be searched. If you have a single vineyard designate and a field for that bit of data, use it: it will show up in searches for all wines from that vineyard.

Your content needs to be ‘clean’ to leverage the power of the Internet.

Okay, great! Now your content is good and ready, but how do you get it out there for all to use and see? Search engines will help and allow people looking exactly for your information to find you. But what about the others potential customers that are not using search engines to get their wine information? Spreading the word about your wines then depends on the technology used to propagate your content and who picks it up.

The most effective method to make your content available to all is RSS. Since a video is worth a thousand words, check this one out if you are unfamiliar with RSS:

http://www.videojug.com/film/rss-in-plain-english

Via RSS, content comes to the user - instead of having the user come to the content. For example, if your content has been picked up by a wine community website, your next best customer might be the wine enthusiast that checked out what new wines were listed on that site. At IBG we have built an aggregate RSS feed that will allow us to disseminate our clients’ content to the growing number of wine community sites and databases.

Okay, great! Your content is clean and you have a way to share it – who do you share it with? Well, that will be the subject of my next blog post.

Aug 29, 2007 at 10:54 AM

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August 27, 2007 | WineDirect Admin

I’ll Write About Wine Next Time… I Promise!

Although I usually feel completely comfortable BSing my way through just about anything, having been at Inertia Beverage Group for only a little over a month, I’m going to show everyone who knows anything about wine some respect and write about something I do know about. Unfortunately for some of our readers that means completely “dorking out” and writing about software development, specifically, Test Driven Development.

Test Driven Development (TDD) is a development methodology that has gained quite a bit of exposure over the last few years and has been shown to increase software quality and reduce bugs released into production systems. This directly translates into lower costs in software development, increased quality and reliability, and, ultimately, a better experience for the end-user… the customer!

In short, TDD dictates that every bit of code that is developed is driven by a set of tests that the developer him/herself writes and maintains. In fact, the tests should be the first things that get developed. This methodology is also referred to as Behavior Driven Development because, in essence, the tests define how the code should behave.

Tests should also be automated. No one can remember everything all the time, not even software developers. Making tests automated and part of the development cycle ensures that the tests are run after every change to the code from the time of inception to the time the code is released into the production system. This is called building quality in and is crucial to keeping bugs out of the production system and keeping the end-user happy.

Jim Park, the head of our QA department, might be wondering if this means that once a development team adopts TDD then QA is obsolete. Never! Test Driven Development provides another layer of and complements quality assurance. It allows QA to concentrate on making sure that systems function the way the clients and users want them to instead of worrying about finding bugs that should have been caught by the developer weeks earlier.

Anyone who produces anything, whether it be cars, computers, wine or software knows that testing the product at every stage of development is extremely important. Test Driven Development provides a framework that guarantees a certain level of quality and confidence in one’s product and makes life easier for everyone involved including the business analyst, the QA engineer, the software engineer, and most of all, the customer.

Aug 27, 2007 at 11:04 AM

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August 27, 2007 | WineDirect Admin

Beating the Customer Drum with Segmentation

At Inertia we diligently advocate customer intimacy—knowing who you sell to. A good idea is to understand your top 50 customers by volume, dollars and particular products. Predominantly, you’ll find these customers in your database based on wine club, general commerce or allocation purchasing.

This knowledge of your customers can result in even more targeted marketing and better customer service, both of which can be converted to sales and customer retention.

In this post I also want to tip you off to a pretty nifty market segmentation research tool (most of the information you can glean for free) that you can further use to understand your customers background.

First, simply, market segmentation is:

The process in marketing of dividing a market into distinct segments that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way and promoted in a certain way.

A market research software company called Claritas provides a good amount of online data that can be used for small businesses to understand their customers based on destination zip code. Their “for purchase” software tool is called PRIZM NE and it defines every household in terms of 66 demographically and behaviorally distinct types, or “segments,” to help Fortune 500 marketers learn about customer likes, dislikes, lifestyles and purchase behavior. The 66 segments are numbered according to socioeconomic rank (which takes into account characteristics such as income, education, occupation and home value) and are grouped in two different ways:

* Social Groups: 14 groups based on urbanization and socioeconomic rank
* LifeStage Groups: 11 groups based on age and presence of children at home, as well as socioeconomic rank

The benefit here is that unless you’re Proctor & Gamble you don’t need to buy this software, a lot of the topline information is provided online for free.

Now, before I ask you to do a zip code search, it’s going to be helpful to familiarize yourself with the 14 social groups found at this link.

Now that you understand the broad ranges of the demographic categorization, let’s go to this web site whereby you can do free zip code searches.

So, let’s do an example, say you’re an Oregon winery and you have a couple of great customers in Naperville, Illinois with a zip code of 60564 that buy your $35 Pinot Noir.

By going to this zip code search site, you can now glean that those in this zip code are made up of the following demographic market segments:

Country Squires
Executive Suites
Kids & Cul-de-sacs
Movers & Shakers
Winner’s Circle

A quick study of each of these is going to give you lifestyle traits as well as income and a general feel for overall affluence based on household income.

Generally speaking, this information can only be used as a guideline for understanding and marketing to your customer, but if you know that your buyers, based on zip code demographics, are likely educated, affluent, drive a luxury vehicle and vacationing at resorts, then tackling this sub-set of your total database with a custom library program offer becomes all the more interesting doesn’t it?

Aug 27, 2007 at 10:56 AM

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August 24, 2007 | WineDirect Admin

Going Native

I recently had a couple of friends visiting from out of town who marveled at the idea of wandering about the Wine Country. Having grown up in Northern California, they asked if I could suggest any wineries for them to visit. I started up my laptop, pulled up the Featured Clients page on the Inertia website and told them to take a look at the wineries and their Events page. They were completely overwhelmed by the amount of wineries listed and didn’t know where to begin.

I mentioned that some of the most beautiful countryside could be seen and there was more to offer than just wine. For example art and architecture could be appreciated at Artesa Winery: http://www.artesawinery.com/about/vcenter/

If music was of any interest, then perhaps they could attend a summer concert series at Rodney Strong Vineyards:
http://www.rodneystrong.com/at-the-winery/events/concerts.asp

Of course, the food samplings and pairings couldn’t be left out, so I suggested Luna Vineyards:
http://www.lunavineyards.com/luna/catalog/view_product.jsp?product_id=1095&cat_id=4

Otherwise, if they wanted something more filling, then the Seghesio Family Vineyard offered a select wine pairing dinner: http://www.seghesio.com/seghesio/page/pairing.jsp

My guests were absolutely charmed with my recommendations and couldn’t wait to roam about the countryside. They of course, found other delightful wineries along the way and even joined a few wine clubs.

If you have an events page on your winery website, you should take the opportunity to list your upcoming events. Whether you’re hosting them or attending one, let your customers know. They may want to join you, or better yet, refer you to someone else.

Aug 24, 2007 at 11:07 AM

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August 23, 2007 | WineDirect Admin

A Little Wine Humor

Every now and then we all need to step back from our daily grind and enjoy a laugh or two. Below are some quotes about wine that I hope you enjoy.

“Wine in itself is an excellent thing”
Pope Pius XII

“Wine is one of the most civilized things in the world and one of the most natural things of the world that has been brought to the greatest perfection, and it offers a greater range for enjoyment and appreciation than, possibly, any other purely sensory thing”
Ernest Hemmingway

“By making this wine vine known to the public, I have rendered my country as great a service as if I had enabled it to pay back the national debt.”
Thomas Jefferson

“Wine makes daily living easier, less hurried, with fewer tensions and more tolerance.”
Benjamin Franklin

“Wine makes a man more pleased with himself; I do not say it makes him more pleasing to others.”
Samuel Johnson

“I’m like old wine. They don’t bring me out very often, but I’m well preserved.”
Rose Kennedy (1890-1995) On her 100th birthday, 1991.

“Men are like fine wine. They all start out like grapes, and it’s our job to stomp on them and keep them in the dark until they mature into something with which you’d like to have dinner with.”
Anonymous Woman

“Women are like fine wine. They all start out fresh, fruity and intoxicating to the mind and then turn full-bodied with age until they go all sour and vinegary and give you a headache.”
Anonymous Man

“Who took the cork out of my lunch?”
W.C. Fields

“If you drink, don’t drive. Don’t even putt.”
Dean Martin

Aug 23, 2007 at 11:10 AM

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August 21, 2007 | WineDirect Admin

Do Your Emails Sizzle?

Let us help.

As most of you know, staying in contact with your customers is a great thing. They enjoy hearing from you and communication helps retain loyalty. But staying in contact takes time and during the harvest season - that is a luxury most wineries cannot afford. Even those with the best intentions, often procrastinate when it comes to sending emails regularly. So the days become weeks and the weeks become months, we end up too busy to say thank you to those customers that mean the most to our wineries. We forget to engage the people that showed interest by signing up for the newsletter or visiting the tasting room.

With these challenges in mind, we have put together the artwork to make your life easier - eight email template styles for you to choose from. Don’t spend your time doing what we can do for you. Once you purchase the template of your choice you will be able to reuse it as much as you like. We will even update the template for you - provide us with the new text in a word file and for a $25 dollar update fee – we’ll do the heavy lifting. (Note : email templates are available to purchase for $150 each or 4 templates of your choice for $300).

These templates are designed by folks who know what catches your eye. You just have to ask yourself, do you want your emails to sizzle or fizzle?

Aug 21, 2007 at 11:14 AM

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August 21, 2007 | WineDirect Admin

Content Inspiration

Much has been said about the importance of the content on your website, including here on the IBG blog. In fact, this will be a significant topic at our annual Symposium later this week. Personally, I am challenged by the notion of keeping up with the pace of the web and keeping content fresh enough. So I went looking for inspiration.

A terrific resource is A List Apart, a site focused on all things content. The particular article I’m referring to offers 10 tips to help you write for the “Living Web” (the part of the web that is always changing). Reading through it, I thought of a couple of winery websites that do a number of things quite well.

For instance, Green Truck Cellars is a terrific illustration of Tip #1, Write For A Reason. I was enthralled with Kent Fortner’s story and read the entire site the first time I visited.

Jeff Stai at Twisted Oak offers a great example of incorporating a blog onto the winery site and providing new content frequently, Tip #2.

I can even argue that Naughty Cellars presents an example of Tip #8, Be Sexy!

Curious now?

Aug 21, 2007 at 11:12 AM

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August 15, 2007 | WineDirect Admin

Marketings 4 P’s

In the early 1970’s Phillip Kotler created the concept of the 4 P’s of Marketing, Product, Price, Place, and Promotion. I have marketed and sold many products, and I have found the 4 P’s relevant with all of them. So what does this mean to the wine industry. Let’s look at them each individually….

Product - You need to have a realistic, objective view of the quality of your wine. How does it compare to your perceived competition? Does it reflect your wine making philosophy? Are you getting the most from the raw materials you have to work with?

Price - How does the price you are asking for your wine reflect the position you are looking for, and the quality of your wine? Under pricing wine is as bad as over pricing. As a baseline, there is a certain return you need from the wine relative to your investment. Does the end product justify that return? If priced to high, the wine will not sell, and you will have dead inventory to deal with. Is it priced too low? If you are selling out your offering quickly, think about raising your price.

Place - This refers to distribution. What are you doing to get the product in front of the consumer? Do you have distributors? are you making market visits to promote your wine? Do you have a good website, with a shopping cart? Are you managing your mailing list? Do you have a club? Have you tried to sell direct in the self distribution states? These are all elements of distribution.

Promotion - What can a small to medium sized winery do to promote their product? There are the obvious tactics, enter wine competitions, wine makers dinners, shelf talkers, etc. What about the not so obvious…Direct promotions, such as special offerings, to your club members. Creating unique bundled offers in your tasting room, or using your newsletter to educate the consumer.

Bottom line is that making great wine is rarely enough. You must be a marketer, and sticking to the basics, the 4 P’s, is a firm foundation to build on.

Aug 15, 2007 at 11:18 AM

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