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Key Strategies To

BuildYour Wine Club

Business

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Fred Dilkes, VPWineWare Software

Introduction

• Serving wineries since 2003• WineClub, E-Commerce & Tasting Room POS Software• Hundreds of wineries nationwide use our solutions

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For most small wineries, Direct-to-Consumer sales represent nearly 70% of all case sales.

Why A Wine Club?

That’s why 75% of wineries have a wine club

Source: http://www.winebusiness.com/wbm/?go=getArticle&dataId=89075; http://www.winebusiness.com/wbm/?go=getArticle&dataId=99945

70%

75%

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DTC wine sales expected to rise this year

Why A Wine Club?

While other wine sales may fall

Source: http://www.cnbc.com/id/100966091

13%

-8%

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Club Benefits

Source: http://www.winebusiness.com/wbm/?go=getArticle&dataId=99945

2/3It’s estimated that the wine club contributes 2/3 of the profitability at most wineries.

• Guaranteed, reliable income & Cash flow• Direct access to end consumers• Higher margins• More likely repeat purchases• Loyal Advocates = New Customers

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Emotional Benefits:• Enjoy a treat• Have something special• Easily entertain• Impress your friends• Be part of a community• Bring friends to events• Use wine as gifts

Member Benefits

Intellectual Benefits:• Discounts• Free Tastings• Exclusive Events• Exclusive Wines

Appeal to both sets of benefits when selling your club!

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Create A Club

Source: “Using Data for Better Decision Making” presentation at the Unified Wine & Grape Symposium, Jan 28, 2014

59% Of wine clubs offer the guest a choice of clubs to join

Consider:• Reds / Whites / Mixed• Price point – entry level, premium• Quantity of bottles (2, 4, 6)• Frequency (Quarterly, Semi, Yearly)• Personality / themed clubs• 1 to drink, 1 to share, 1 to collect

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Shipping Strategy

Source: http://simplehedonisms.com/archives/4353

Consider subsidized shipping to boost volume & stand out

Example 1:Customer Pays Shipping100 customers, 4 bottles ea.Avg. $20 per bottle30% marginNet Profit: $2400

Example 2:Free Shipping on 6 bottle club100 customers, 6 bottles ea.Avg. $20 per bottle23% marginNet Profit: $2760

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Create A Club

Do:• Reflect Your Brand• Think “Value Add”• Personalize • Have Fun

Don’t:• Let Customers pick the wines• Dump overstock or excess inventory• Send the same thing each time.

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Create A Club

Source: http://www.winebusiness.com/wbm/?go=getArticle&dataId=75974

$25 and less4%

$26-$5019%

$51-$7527%

$76-$10012%

$101-$15019%

$151-$2005%

> $2006%

Don’t Know8%

Average Price of Wine Club Shipments 2010

Most Popular

Also Good!

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Boost Your ClubCreative Ideas:• Exclusive wines• Discount on wine purchases• Member events• Added benefits for higher club tiers• “Velvet rope” club-only tasting area• Concierge services in area – help with trip planning• Pick up parties for members• Pairings with artisan cheese, chocolate, olive oil• Lifetime tasting pass• Refer a friend promotion• Wine Seminars• “Education” such as science of wine or aromas• Organize a wine tour or vacation for members

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New Competition• Winery Growth• Web-based multi-winery clubs• Magazine, Hotel & other branded clubs• Chain tasting rooms (Vino Volo)

Interactive Small Sample BottlesVote For FavoritesFeedback from customers“Customized” shipments Focus on educationVertical tastings / regions / flights“Competitions” & “Status”

Source: http://www.cnbc.com/id/100966091

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Brand Your ClubYour club should be a unique reflection of your brand!• Think about what makes your winery unique• Structure your club around your brand

Be sure you can continue to offer the promised benefits when your club grows in membershipTIP

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Promote Club

Source: http://www.winebusiness.com/wbm/?go=getArticle&dataId=75974

1084 Average number of members in a winery’s club

10%Average conversion of tasting room visitors to club members

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Promote Club

Source: http://www.winebusiness.com/wbm/?go=getArticle&dataId=46704http://www.winebusiness.com/wbm/?go=getDigitalIssue&issueId=6633

In the Tasting Room:

90% Of club members are signed up in the tasting room

34%In a 1000 tasting room visit study, only 34% mentioned the wine club

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Promote ClubIn the Tasting Room:• Train & Script Staff• Provide proper incentives: Cash, gift cards, logo apparel, merchandise, team & individual• Brochures & Signage visible• Show club prices on wine lists

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Train StaffUncover hidden objections:• Do they know why the club is important?• Do they feel the club is a hassle to manage?• Do they feel it is a benefit to your guests?• Do they understand your brand’s story?• Do they understand the structure of the club?• Do they have materials to present?• Are they incented properly?• Are you keeping score and celebrating success?

Do a tasting before each shipment so staff can answer questions and promote reorders

TIP

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Promote ClubOutside The Tasting Room:• Outside events, tastings.• Cultivate your e-mail list• Social media• Target customers who have purchased a case• Refer a friend promotion • Promote Gift Memberships• Work with businesses who send customer gifts

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Manage Your ClubThe Power of Wine Club Software• Easy to process shipments• Complete customer history – purchases & interactions• Manage compliance issues• Inventory Tracking• Easy, secure credit card processing

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What to Look ForFlexibility• Multiple club types• Configurable pricing tiers / discounts• Customizable Reporting

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What to Look ForIntegrations• Integrate with your tasting room POS• Share inventory info• Share customer data, pricing• Ship Compliant integration• Shipping software integration• Easy print of labels, pack slips, etc.• E-Commerce integration

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What to Look ForCustomer Service• Member self-serve form• Join or update profile from tasting room or website• Complete customer tracking• Pre-paid, gift, no charge memberships• Skip shipment for vacation or absence

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What to Look ForCredit Card Processing• Security – PCI Standards!• Decline Minimizer:• Automatically updates expiration & new card

number• Reduces need to call / potential cancels

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What to Look ForCommunications• Always get an e-mail!• Segment “E-mail only” customers & recruit them• Stay in touch with club members• Easy integration from club software

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What to Look For

Cloud vs. Local?

• Our software keeps data locally in your winery.• Reliable access to data – many wineries are in remote areas with unreliable internet.• Cloud Outages• Ownership / control of data.

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Tracking ResultsWhat to Track:

• Membership Growth – new members added• Membership Attrition – members who cancel• Sales per Member – above & beyond club• Conversion in tasting room – for email & club

Graph Courtesy VingDirect

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Improve Retention

Average member lifespan is 18-24 mo. What is yours?

18-24 mo.

30-60% You may experience 30% - 60% attrition per year!

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Improve RetentionCommunication:• Welcome members to the club• Special thank you on anniversary of club membership• Communicate between shipments• As members get close to average drop-out time, reach out, give extra benefits.• Escalate benefits in 2nd year.

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Improve RetentionConnection:

• Encourage members to share with social media• Issue a membership / loyalty / gift card • Encourage guests at events• Foster community• Make it fun – surprises, gifts, treats

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Improve RetentionFlexibility:• Offer a lower priced option or less frequent shipments• Allow a 6 mo. Hiatus from shipments while keeping other benefits

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Improve RetentionFollow Up:

• Survey customers who leave – why? • Stay in touch after they leave – keep marketing. They may still purchase a gift membership or wines.

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ConclusionMake Your Wine Club Shine!

Great Club Benefits

Great Promotions

Great Technology Great Follow Up

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Can We Help?

SmartPOSTasting Room Software

Tablet or Traditional POS

SmartClubWine Club Software

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www.winewaresoftware.com805-227-0202