Why Wineries Should Charge Their Highest Retail Price in the Tasting Room

By. Neil Williamson, Grumpy Marketing Guy

Over the past couple of years there has been a great discussion about where wines in tasting rooms should be priced.  There are some who believe the tasting room is like a “factory outlet” store and should have the lowest prices anywhere.  Based on the title of this post you can see that I fall in a different camp.

If you have your wines in distribution, whether you are distributing them yourself or not, the retailers are a primary sales channel.  The retailers are your partners.  Why would you undercut your partners?

Please let me explain.

The shop owner perspective – When you, or your distributor attempt to place the wine with a wine shop (or grocery chain) price will be a key issue.  If you are a local winery you may have a leg up on getting attention but one of the first questions will be “What do you sell it for at the winery”.  In the shop owner discussion you are competing with every other wine that is available in distribution.  If you are 5 miles away and selling the wine $3 cheaper than he/she can, why should you get a placement in the shop?

The customer perspective – In the retail shop, your wine must compete with all the other wine in the establishment.  If  a customer has been a guest at your winery and purchased your Chardonnay for $21 and sees it at their “regular” wine shop at $17.99, they perceive increased value, as they enjoyed the Chardonnay at $21.

The Grumpy Marketing Guy perspective –  Wine purchased at the winery provides the winery three profit margins (producer, distributor, retail).  If we accept that guests that visit the winery like wine (not a big leap) and regularly shop for wine somewhere other than the winery, then capturing all three profit margins maintains your pricing integrity in all channels.  In addition, it helps build credibility with your retail partners.

It is important to recognizing winery guests are wine lovers who have a variety of only your wines to choose from during their visit but its all your wine.

Important exceptions

  • Multiple bottle/Case discounts – just as your retail partners have such discounts you should as well usually at 3, 6 and 12 bottle increments.
  • Inventory Issues – there are times when a wine does not move in the market and you have a significant inventory, creating a special price for such wines as needed is a great idea.
  • Festival Pricing – I encourage wineries to play with their pricing at festivals.  If you are sold out of a wine at the last festival, bump it up a $1 a bottle see if it still sells out.  If something was a slow mover drop the price $2 as a festival special.

Wine prices at the winery should be designed to recognize the significant capital costs you have in the winery and to capture the maximum revenue the market will bear.

Respectfully Submitted,

Neil Williamson, GMG

Photo Credit: Winecountry.it

 

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How Mystery Shoppers Can Improve Your Business

By. Neil Williamson, Grumpy Marketing Guy

The term ‘Mystery Shopper” has been around for at least twenty years. The concept behind mystery shopping is rather simple; how do your employees (or you) honestly interact with customers.  While there are companies that do mystery shopping for a fee, I have found some of the best mystery shoppers are friends of mine who are not known to the client or the client staff.

Doesn’t the use of a mystery shopper mean you don’t trust your staff?  No.  Frankly when I have presented the results from the Mystery Shoppers staff are often horrified at the manner in which their actions were perceived.   With the advancement of Facebook, Twitter and Yelp! having a consistent customer engagement strategy is critical.  There are many individuals who will spend a great deal of time blogging about their experience in your establishment.  These too are teaching moments; but I’d rather control the discussion with a mystery shopper program.

How to build the shopper program — with your staff.  No one likes surprises so go over the goals of your customer engagement program with the staff and see if they agree.  If not, revise the metrics of the program.

Here are a few sample metrics based on a winery tasting room setting:

Were you greeted on arrival in the tasting room?

Were you informed of the tasting fee prior to tasting?

During the tasting did the staff seem knowledgeable about the wines?

Were you given time to taste each wine?

Did the staff provide the history of the winery?

Were you informed of upcoming events?

Were you asked how you heard about the winery?

Did the tasting staff seem interested in your wine journey?

After tasting were you given the opportunity to retaste?

Did the staff ask for your wine order?

In preparing your wine order did the staff confirm with you the wines before placing in the case/box?

Were you thanked for your purchase?

Was your checkout handled efficiently?

Was the tasting room busy?

Was the tasting room adequately staffed?

Overall how would you rate your visit (1-10 scale)?

What could be improved?

Once you and your staff determine the metrics to be used and you let them know you will be using a mystery shopper, you will see improvement in your customer engagement.  I usually bring in the mystery shopper 2 weeks after the staff has signed off on the metrics.

After the mystery shopper files their report (usually an e-mail with the questions above answered and other comments i.e. tasting room staff wearing low cut blouse, taking phone calls, kids running in tasting room, etc.)  I take the results to the tasting room manager and discuss in a morning meeting and then chat with all the associates over lunch.

This team methodology allows the manager to have an opportunity to determine how to best use the information to generate better customer engagement.  Usually better customer engagement results in increased sales.  And really isn’t that what marketing is all about.

Respectfully Submitted,

GMG

Image Credit: Truliant Federal Credit Union

 

 

An Insider’s Guide to Wine Festivals

This article first ran in The Old Town Crier in May of 2011

By. Neil Williamson

We are well on our way into Virginia wine festival season.  For those not familiar with wine festivals, these outdoor events feature music and wine tastings as well as wine sales.  Some of the festivals include an educational seminar component as well.  As I am now entering my tenth season participating on both sides of the table, the Old Town Crier thought it might be fun for me to share festival strategy.

Photo Credit: Virginia Wine Festival

Don’t go it alone I can’t think of a single festival that I have enjoyed going to alone.  I strongly encourage you to bring a friend or a group of friends so that you can discuss the wines and enjoy the beauty that is the Virginia countryside.

Have a designated driver If one of your festival patrons will not volunteer, I have known friends to be bribed with wine purchase (usually a case) to serve as the designated driver for the group for the day.  While the primary benefit of the designated driver is safety, ancillary benefits include a clear headed friend to keep your group out of any incidents at the festival itself (stuff happens).

Choose the right day Do you like crowds, excitement and generally more rocking music choose to go to the Saturday of a two day festival.  If you prefer to have conversations with winemakers and shorter lines choose early Sunday.

Dress the partshoes Most festivals feature a center tent and then winery and craft tents in a field.  Shoes that work well in that environment are a must.  Many wine folks can tell the tale of the high heels festival goers had to put in the trash after a surprise afternoon rain created a mud bog.

Dress the part – hat As we start the festival season, the sun can sneak up on you.  I know I sound like your mother but a good hat (and sunscreen) are important to the enjoyment of the day.

Plan your attack – When I attend a festival, which are great opportunities to taste lesser known wineries, I always seek those out first.  It never fails to amaze me the ppatrons who choose to go to their old standby’s first.  In the industry there is a term known as palate fatigue – as you taste flavors (regardless of if you spit or not) your palate becomes increasingly less sensitive as you continue to taste.  As I know my favorite’s flavor profiles I tend to taste those later in the day.

Eat – Fesitvals tend to have some of the best “fair” food in the state.  I have been known to bring crabcake sandwiches home from festivals to rave reviews from the family.  Eating is an important part of the festival experience, whether you bring your own picnic (check with each festival) or select from the multitude of food vendors.  Both the break in tasting and the chance to sit down with friends and eat is a welcome respite.

Drink more than just wine (water) – Smart festival goers pack their own water into the event (usually permitted) beyond the potential heat, the tannins in the wine can deaden your scenes at the next winery you taste.  In addition if you did not like the previous wineries last pour you have your own water to rinse that from the glass.

Don’t smoke in the tasting line – Far be it from Grapevine (who has been known to enjoy a fat cigar every now and again) to tell you not to smoke; but don’t smoke in line.  This is a tasting event and if someone is blowing smoke rings from a nice thick Padron cigar, they people in front of them will have a tough time tasting the apricot undertones of the delightfully light Viognier.

Ask questions – When you are tasting with folks from the winery don’t accept the canned “it’s a full bodied red blend” ask questions.  What’s it a blend of?  Did this spend time in Oak?  How was the vintage year compared with others?   What would you serve with this? What’s your favorite wine?  These folks are pouring wine because they love wine, learn from them what they know.  And if they don’t know (or direct you to someone who does) – that says something too!

Wait your turn – You will never learn any of the fun stories if you are reaching over three other people to get served.  If the line is too long either find a less crowded winery or buy a bottle and sit and listen to the music.

Buy wine – The festival is designed to showcase Virginia wine in a manner that you will buy some.  While the wineries know you have paid to be there to taste wine, they have also paid to be there to pour wine.  Unless they sell wine it is unlikely they will be back.  Wineries often have festival specials that can’t be matched even at the winery tasting rooms seek them out along with six pack and case discounts.

Use will call/wine pick up – most of the larger festivals have a solid will call wine pick up service.  When you buy your wine they haul it over to a spot where you can pick it up and (often) have it loaded in your car.

Attend the seminars, cooking demonstrations and tasting tents – The festival coordinators work to develop educational opportunities that are generally undersubscribed.

SHAMELESS SELF PROMOTION – I will also be serving as the host of the “Top Five” Tasting Tent at the thirtieth annual Vintage Virginia the first weekend in June at Bull Run.  I will also be a part of the Wine 101 seminar  at the Montpelier Wine Festival held in May in Orange County.

Whether you choose to be a part of the seminars or not, I strongly encourage you to attend a couple Virginia Vine Festivals and taste how Virginia wines have grown in variety and excellence. I do hope to see you along the Virginia Wine Trail.

 

Wine Festivals – Marketing Goldmine, Necessary Evil or Simple Drunkfest?

By. Neil Williamson, Grumpy Marketing Guy

Photo Credit: Virginia Wine Festival

Anyone that has been paying attention over the last twenty years has witnessed the growth of the wine festival.  The bulk of this post will focus on Virginia wine festivals but I have seen similar patterns in other states as well.  As a disclaimer, I have created festivals, worked with festival promoters, been a festival attendee and been an exhibiting winery.

One truth at the outset — All festivals are not created equal.

Back in the Industry’s early days, wine festivals were the hot spot to find the new wine meet the wine makers and hear good music (all of this is still true).  In addition these festivals were hugely profitable for the wineries because people would come and buy cases of Virginia wine that were not available at their local stores.

Then three major changes occurred:

  • Others saw the festivals were successful and fun and more festivals popped up
  • Virginia wineries started selling in the neighborhood wine shops
  • A bunch more Virginia wineries (now over 200) came on the scene

Photo Credit: Virginia Wine Festival

Does this mean festivals are no longer a good idea for consumers or wineries — absolutely not but how both consumers and wineries approach festivals should change.  In addition smart festival promoters are differentiating their festivals with additional programming, unique locations, and special top-notch entertainment and promotion.

First, consumers should change their methodology at a festival.  Rather than heading toward either the first tent or your favorite, I encourage festival goers to “start in the back and work forward”.  Seek out those wineries you don’t know before you head back to your well known favorites.  Secondarily, eat — trust me you need to eat.  After over a decade in the wine business, I can tell you the sun and the wine will catch up with you.  Finally and most importantly buy.  The wineries have come to the festival to sell you wine.  Don’t ask where you can buy it — look at the cases stacked behind the taster — you can buy the wine here!

The wineries need to be more selective about their pours.  Knowing you are headed to a festival where a number of wineries will be pouring do you think it is wise to bring all 14 of your wines?  An interesting study mentioned in Malcolm Gladwell’s book Blink tested consumers provided four options of jelly to taste versus 12 options of jellies to taste — which portfolio sold more?  The one with only 4 choices.  Take a good look at your wine inventory and determine which wines you can afford to pour and sell at festival.  In addition, after two years of festival going, wineries should take a good hard look at their festival profitability, not all festivals make money but those that cost a bunch should be considered for discontinuation.

Finally, the promoters must recognize two important realities first the people come to the festival for the wine so be really nice to the wineries and make it easy for them.  Secondarily, that the days of throwing a wine party in the field and having any crowd come are long gone.  You need to have a hook, a solid marketing plan (including social media), as well as hope for good weather.

Festivals are an important part of the Virginia wine business.  In addition to being a solid sales/marketing opportunity it also draws the industry together in a unique way.  You will never forget who was near you when the Tornado Warning came down from the hill or what wineries made it to the convention room floor despite over a foot of snow.

Above all else, all involved in wine festivals need to have a can do attitude and recognize that whether the event is like a Super Bowl winning team or the voyage of the Titanic, we are all in this together.

The answer to the question in the post headline is “Yes!”

Respectfully Submitted,

GMG

Making Your Weak Points Stronger

By Neil Williamson, Grumpy Marketing Guy

Every brand identity has a weakness.  There are some stronger brands that have the lingo of the day over take them, others find what once was a strength is now perceived as a weakness, and finally some brands find their brand identity  has obscured their product.

Language changes

Many years ago a small businessman started a pest control service, Pest Management Services.  In the intervening thirty years the initials PMS came to have a totally different meaning.  As his business was a low margin business rather than renaming the business, he simply asked his associates to change their verbiage to use the term “Pest Management’ rather than the initials — a quick, free fix.

Located in Seoul Korea, it’s hard to believe that the World Taekwondo Federation is unaware of the urban slang that their acronym (and colorful logo) represent in much of the western world.  Either they have too much vested in the logo, or they don’t care. If I were advising WTF I would encourage a two step process change the logo then rework the name.

World changes

For several years, Dunkin Doughnuts were known for their ubiquitous commercials touting time to make the doughnuts.  Their story was fresh baked doughnuts made by real people who got out of bed just to bake your doughnuts — until doughnuts became a dietary target and no matter how freshly baked people were trending to Starbucks for coffee and leaving Dunkin in the lurch.  Time for a brand revamp.  What are people stopping for?  Coffee (and a pastry) what is the biggest drawback to Starbucks — the line.  Bring on a new brand position that brings in patriotism, hints at health and productivity – America runs on Dunkin’.

I had nothing to do with this campaign but I have to believe it was a tough sell — “you plan to use fitness to sell doughnuts?” .  I consider this to be one of the strongest brand pivots in recent memory.

Losing Yourself to Your Brand

One of the fundamental marketing challenges is to develop a memorable brand identity that complements the product without obscuring the product (and the consumer benefits).  The most successful brands see their brand come into common place use for the product.  Sunkist Oranges are a good example of a brand name that speaks to the product.  Now what about the King campaign for Burger King.

This well funded campaign never managed to capture the campy image it wanted.  Instead the ceramic headed king started showing up places one would not want their brand associated (strip clubs, etc) and parents complained loudly that the iconic figurine was “creeping out their kids”

One might ask how Ronald McDonald might be perceived in today’s culture rather than the mid sixties era he was launched.  In this case, Burger King dethroned the King and most folks thought they waited too long.

If you do a 360 degree review and focus on what you do well, speedy service, great coffee, excellent value build your brand position base on strength of you unique selling position — and don’t be afraid to modify that position as time moves forward.

Respectfully Submitted,

Neil Williamson, Grumpy Marketing Guy

 

Photo Credits:   World Taekwondo Federation, Dunki’n Doughnuts, hubze.com

What’s Your Story?

By Neil Williamson, Grumpy Marketing Guy

In considering developing, creating or honing your winery’s brand position, I encourage clients to take a long look in the mirror.  What makes your wine different than ALL the other wine that is out in the market?  Newly minted marketing guys (and gals) like to discuss your USP, Unique Selling Proposition.  Back in 2009, An Economist magazine article defined the USP in this way:

A unique selling proposition (USP) is a description of the qualities that are unique to a particular product or service and that differentiate it in a way which will make customers purchase it rather than its rivals.

Rather than using the USP verbiage, I find that a more in New York style question of “What’s Your Story?” generally drives the brand awareness conversation.  Everyone has a story to tell and told properly these stories can help to sell your wine.  Stories/ideas that have worked include tying to the real or imagined vineyard location (Pine Ridge, Silver Ridge, Pillar Bluff), linking in with celebrity ownership (Coppola Estate, Newman’s Own, Andretti Winery), or elevating a winery/vineyard process (Toasted Head, Barrel Oak, Twisted Vines).

One “encore career” client demonstrated the ability to not only identify his USP but to wrap his brand around it.  Jim Turpin of Democracy Vineyards is a self described “recovering lobbyist”.  His back story of politics in both the Virginia State Capital and the Nation’s Capital made for the selection of the winery name somewhat a no brainer but he and DV owner Susan Prokop took the concept even further.

Turpin wears bright red white and blue outfits to festivals and other winery owners have taken to calling him Captain America.  Each of Democracy’s custom crush wines have  names that evoke the concept of Democracy.  There portfolio currently includes Velvet Revolution, Declaration, Emancipation, Sufferage, Unum, Parliment and Alabaster.

Another wine brand I use in these discussions is South African Winery Mulderbosch “Faithful Hound” brand.  In addition to being a fantastic red blend year after year.  I have witness folks break into tears when reading the story printed on the label, that tells the tale of the dog, whose owner moved but returned every evening to sit on the porch and wait for his return, the dog died with his love unrequited.  This is a wine with a story.

Another way to look at the nurturing of a brand is understanding how you, or the winery owner, or the grower or the winemaker are the face of the winery.  People want to know people.  They love getting inside scoop on the upcoming vintages or harvest so they can impress their friends with their understanding of the business.   The best person to be your “face” may not be the owner.  But a word of caution, if you invest significant brand equity in an employee or partner, recognize this as a strategic decision and think how you will respond when they move on.

Above all else be true to who you are in your brand positioning.  If you can’t stand dogs, don’t put a dog on your label.  Just like fear, consumers smell phony from a mile away.  In addition, if you don’t believe it why should anyone else.

Here’s your homework, sit down with a pad of paper and write down ten things about you that make you unique and think of how you might integrate these into your brand positioning.  It may not be a label concept at all.  One client was an avid Ford F-150 driver.  That’s all he owned his entire life a series of these Ford Trucks.  Rather than put that into the label concept we simply added a new title to his signature Winemaker & F-150 Driver.

You have to be genuine, interesting and unique.  It’s all that easy and it’s all that hard.

Respectfully Submitted,

GMG

photo credits: Andretti Winery, Neon Cactus Wines

 

 

 

Winery Weddings — I Do or I Don’t

By. Neil Williamson, Grumpy Marketing Guy

Wineries, like any other business, are often looking for ways to diversify their income by maximizing their assets.  Vineyards and wineries tend to be romanticized and provide a great backdrop for a wedding where the goal, not unlike wine, is for the relationship to grow better over time.

Photo Credit: First Colony Winery

Constructed properly weddings (and other private events) can add significantly to the bottom line of a winery.  A quick review of the central Virginia wine market found  banquet room rentals can be between $2,000 and $8,000.  This is before you add in any wine minimum.  Several wineries do over forty weddings a year, this can generate over $200,000 gross revenue annually.  Even just one wedding a week in the three summer months would equal $60,000.

In addition, you are introducing a large number of individuals to your property, selling a large amount of wine (many wineries have a minimum), all during time your tasting room would usually be closed.

Residual sales also benefit as folks marrying at the vineyard tend to return and purchase.

So it is clear there are several reasons wineries consider doing weddings.  Why would a winery not want to serve as a nuptials host?

Winery location is too remote
Not enough space vineyard for a tent
Staffing demands
Wear and tear on facility
Security issues
Neighbor concerns
Fear of Bridezilla
Does not fit personality of the owner
Takes away from other guests’ experience

In my years in the wine business, I have often found that the very characteristics that make a great winemaker are not always the same features of an accomplished wedding planner.  The most successful “wedding” wineries tend to have dedicated staff willing to work with the Bride [and the family] for a year or more prior to the event and most comfortable holding their hand through the planning, decision making and the actual event.

If you are planning a winery, determine if you believe your personality fits hosting events, if not, can you afford someone on staff with these skills?  Then prior to even laying out the vineyard, no less the winery, visit several wineries that do weddings.  Read their websites, meet with their approved caterers, understand their challenges and try to build your venue to be both different than theirs but learn from their comments.

Just as with marriage, weddings aren’t for everyone.  The best way to minimize risk, is to go in with eyes wide open — that’s pretty sound matrimony advise as well.

Respectfully submitted,

Neil Williamson, Grumpy Marketing Guy