By Jeff Stevenson
What we expose in this the second of two articles is the truth behind what is really driving direct-to-consumer (DTC) sales, specifically sales made with direct customer interactions over the telephone.
VinoPro has have compiled data from more than $17 million worth of DTC sales made over the telephone for our partners from Jan 1, 2012, through Dec. 31, 2013. Some of this data is surprising, because it contradicts much of what you have heard in dozens of conferences and from other “experts” in their field. Fifty-plus brands are represented, and more than 60 sales representatives made the sales.
This is real data you can use, collected from real sales.
Myth No. 5: Tasting room can close at 4.
It may not seem obvious, but the numbers prove it out: People prefer to buy wine later in the day. In fact, 89 percent of sales occur 2–8 p.m Pacific Time, and almost 20 percent, 4–5:30 p.m.
If you remain open later — especially on the weekends — then your winery could become Wine Country visitors’ last stop. The reality is that customers likely will be more susceptible to recommendations and also have a softer grip on their pocketbooks at that time.
In reviewing the graph here, you can clearly see that customers on the East Coast buy the most wine 7–8 p.m. The same goes for every region across the U.S.
Wineries that try and use their tasting room staff to call customers and sell them wine during normal business hours almost always fail.
Myth No. 6: ‘Free shipping’ sells more wine outside California.
Ever wonder why Amazon Prime is such a hot product on the Internet? Fact: Acknowledging that the cost of shipping wine is a hot button topic for consumers allows you to address the issue and use it as a tool to sell more wine. Sending out email blasts with, “Shipping included on all three-bottle orders!” just trains your customers to wait for these deals before they buy and does much more damage to your brand than good.
Why not use shipping incentives, instead, to upsell and get customers to buy more wine? You win, the customer wins, and you can recover more margin on each sale.
During 2012, VinoPro used no shipping incentive on more than 76 percent of $8 million-plus in wine sold. That means 15,770 customers paid full freight to receive their wine. The average order value with no shipping incentive was $297.
When we used our most common shipping incentive of half-off shipping, we almost doubled our order value to $549. We used this tool on 11 percent of our orders.
Interestingly enough, this tool is exactly the same as saying, “If you buy another case, I can cover the shipping on the second case.” Or put it another way, “If you buy another case, I can split the shipping with you on the whole order.”
Only 5.4 percent of all orders were “shipping included.” The average order value was $1,348, which is over 4.5 times more than when we use no shipping incentive.
Let’s look a little closer at that number. Each time we used a “shipping included” incentive, the consumer increased the order value dramatically and generated $1.5 million-plus more for our vintner customers. Assuming average shipping costs are $50 per case — the majority of these orders were multicase — that means the net discount per order was about 7.5 percent, just by using this incentive in the right way.
When you offer in an email blast to give away shipping or 1 cent shipping with no or a low minimum order value, you take away you best tool to sell that customer — the desire to minimize shipping costs. We have seen customers spend thousands of dollars more on a case of wine when shipping incentive tools are used properly.
Jeff Stevenson (email@example.com) is chief executive officer of VinoPro, a Santa Rosa-based direct-to-consumer wine sales, marketing and technology solutions company. VinoPro sells wines for Constellation Brands, Jackson Family Wines, Treasury Wine Estates, Iron Horse Winery, Benzinger Family Winery and many other individual brands. VinoPro was named to the 2013 Inc. 500 list of fast-growing companies, ranked No. 236 for attaining 1,818 percent growth over the previous three years.
Copyright © 1988–2014 North Bay Business Journal
View the policy for linking to website content.