Issue link: http://winesandvines.uberflip.com/i/437909
108 WINES&VINES January 2015 SALES AND MARKETING stream of visitors. The third is a "wave of opportunity" (when mul- tiple cars pull into your parking lot within 10 minutes). The fourth phase is "slammed," when you are so busy it is very hard to keep up. My main concerns are phase two (slow but steady) and phase three (wave of opportunity). Man- agement thinks that they save $100 in labor by not having that third staff person (or fifth, or eighth, depending on your atten- dance). I do a lot of budget cre- ation forecasts for my startup tasting rooms, and budget review when I do an analysis of current operations. I know how much labor can cost, but understaffing hurts your bottom line. It's important to know what the lifetime value of your wine club members is. To calculate this amount, multiply the number of shipments per year times the aver- age cost per shipment times the average number of years members stay in your club. I have seen cred- ible studies stating that people generally stay in clubs for between 18 and 24 months. (I'll use 18 months to be conservative.) If you ship six times per year at $50 per shipment, that would be nine shipments in 18 months for a total of $450. Let's say the members only buy $50 of wine (over and above the $450) in that entire 18 months, which is also conserva- tive. So you didn't save $100 in labor, you lost $400 ($500 lifetime value minus $100 in labor). Why? Because you didn't schedule that third or fifth person for a tasting room shift to harvest the "wave of opportunity." If your tasting room staffers can only keep up with the flow rather than sell more wine and club memberships, you are understaffed. Plus, ample staffing means you will always be able to offer top-notch customer service, which improves repeat business. In my experience, one of the main reasons for understaffing is as follows: The owner or general manager at a winery walks into the tasting room, and the staff is standing around. They have dusted all the bottles, re-stocked and cleaned the tasting room thoroughly. There is literally noth- ing for them to do. The owner— used to seeing people consistently busy in winery production or ad- ministration—overreacts and has the tasting room manager cut back on staff. What top managers have to realize is that this part of their operation is retail, not production. How many times have you been in a department store and encoun- tered a clerk standing behind a gleaming counter with nothing to do? Do you think Nordstrom sends the clerk or clerks home early? Or has them work two counters? Top managers in retail operations realize there is an ebb and flow to customer visits, and they know that there will occa- sionally be idle clerks. They also know that, in the long run, they will profit from having sufficient staff. These are just a few of the many pitfalls in running a profes- sional tasting room. The trick is to be aware of them so you can be more profitable than your compe- tition. Craig Root has 30 years of experience working with tasting rooms—the past 17 years as a consultant. He has helped create and analyze more than 150 tasting rooms and wine clubs all over the United States. He analyzes current operations and teaches tasting room design and management at the University of Califor- nia, Davis. He still occasionally works in a busy tasting room in order to stay in touch with the public and the work. Let your wines speak directly to their target markets through premier packaging. Select from our premium bottles or custom design the ideal bottle, pewter label or other packaging solution to promote and sell your fagship wines. East Coast usa@estal.info 305 443-7451 West Coast info@globalpackage.net 707 224-5670 A Package Speaks a Thousand Words GP144368