Issue link: http://winesandvines.uberflip.com/i/918844
44 WINES&VINES January 2018 Viewpoint G iven the importance of direct-to-consumer (DtC) sales in the wine industry, one might assume we have found the holy grail of customer relationship management. But compared to other hospitality industries such as cruise lines and casino gaming, we fall far short of best practices. Sure, we have strong wine clubs with members that respond to our email offers (at least some of them do), but there is so much more we could be doing. We have the tools, and we have the data. The building blocks are well in place. But we fail to use the existing data to better understand, segment and personalize our marketing programs. In the end, we could grow profits much further and create far more enthusiastic ambassadors for our brands. Let's begin with a few basic assumptions. Do you think your top-tier wine club members are synonymous with your best customers? Are they the most satisfied with their tasting room experience? Is their event experience exemplary enough that they bring more of their friends to each new event? Within your competitive set, is your wine club better than other clubs or lists to which your best clients belong? Are your top customers more satisfied with your product? Are they buying more frequently than before? Are they visiting more frequently than before, or has their profitability declined because they continue to taste and attend events without incremental purchases? Do you even know the answer to that last question? Best customer definition Other industries, including the gaming industry, offer tiered club programs, but they are typically enhanced with revenue metrics to ensure that the best customer is truly the most profitable to the company and, therefore, should receive the most club benefits. It's a com- plex management system that allows companies to fine-tune their customer relationship management well beyond what most wineries attempt. Wine club attrition is a major issue in the industry, with the av- erage wine club member leaving after 18-30 months. And most winer- ies accept this as fate or the cost of doing business. But linking purchases over time to customer value can provide helpful in- sights into those members that increase or decrease spending over time. By iden- tifying the declining best customer and implementing personal- ized programs to avoid defection, you can make a measureable difference in your wine club profitability. In the wine industry, our top customers typically "self-select" into our top-level program through their case commitment. In many cases, this is a good enough measure of who is our best customer, but let's take that a step further: A more robust measurement would include overall revenue, club referrals and affiliate purchases, email responsiveness and event participa- tion. Do you measure and track all of these activities? Because if you did, you'd have a 360° view of the most important cus- tomers in your DtC program. In the gaming industry, many top customers are clearly identified by their overall interaction with the company, and the top-level customers are treated to complimentary gifts, suites and gaming discounts on a regular basis. The gaming industry understands how valuable these top customers are, and they treat them as such. We need to learn from that example and improve our unique value proposition and treatment pro- gram for most the profitable and "growable" members. Member benefits for guests Hospitality companies often offer voucher programs in which members can extend their offer benefits to others. This encour- ages customers to bring their friends along—an important element in marketing to the key de- mographic ages of 45-65. That group loves to travel together. When a member arrives with a group of friends, you can bet the casino is going to lay out the red carpet for them all, be- cause they understand the enormous oppor- tunity to build their customer base inside a highly desirable, pre-selected group of clients. I don't see wineries extending member benefits to guests. They seem to think you should join the club to receive those b e n e f i t s , a n d t h a t ' s a v e r y s h o r t - s i g h t e d approach. n MARY LOFTNESS AND PAUL WAGNER What DtC Wine Sales Can Learn From Cruise Lines and Casinos