What we expose in this the first 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 $8 million worth of direct-to-consumer sales made for its strategic partners from Jan 1--Dec. 31, 2012. This is data based on real sales that occurred from actual interactions with customers and sales made over the telephone. Some of this data is surprising, because it contradicts much of what you have heard over and over.
More than 50 different brands are represented and over 60 different sales representatives made the sales. What we learned from this exercise is that there are several myths in the DTC wine sales space that tend to permeate the thinking of those in the business. Real data should really be used instead, and is presented here for your immediate use.Myth No. 1: Millenials matter.
[caption id="attachment_84939" align="alignright" width="300"] Source: VinoPro[/caption]
It’s not that they don’t matter, but they don’t matter very much. The following chart is based on more than $8 million dollars in sales and illustrates that Millennials are not buying very much premium and ultrapremium wine.
In fact, 84 percent of our buyers are older than 40, and 62 percent, over 50. This makes perfect sense: Millennials have less money to spend, so they spend less.
What does this mean to you? That brings us to myth No. 2.Myth No. 2: Social media matters.
OK, we admit it: social media is great for branding. It’s crucial to be speaking directly to your aspirational and future customers, but social media is terrible medium for selling wine, especially to your Boomer customers. Ask yourself how much wine you’ve actually sold using social media.
A recent Pew Research Center report found that only 42 percent of Americans aged 50 and older are on Facebook, and only 18 percent of Twitter users are over 45. Seventy-seven percent of Pinterest users are under age 45.
As for income, only 11 percent of Facebook users make more than $100,000 a year, and only 9 percent of Pinterest users make more than $100,000 per year. Sure it’s important to have a basic social media strategy, but if you’re a premium or ultrapremium wine brand, you shouldn’t expect to see a significant monetary return on your investment in social media any time in the near future.Myth No. 3: People are buying lots of wine when they visit you in Wine Country.
According to the 2012 Napa Valley Visitor Profile report, the average Napa visitor spent $485.87 per day while in Wine Country but only $40.06 per day on wine! Given that the average visitor went to 4.1 wineries or tasting rooms during his/her visit, that means they spent about only $10.00 on wine at each winery.
What does this mean to you? You should be asking why your tasting room isn’t converting more visits into sales, or at least collecting visitor data before they leave. We would advise implementing an aggressive data-capture program, or you will be watching years of potential sales walk right out the door.
Also, providing more extensive sales training for your tasting room staff and using the data you collect to reach out to your potential customers with personalized attention via phone calls and emails can all produce a dramatic increase in your sales.Myth No. 4: Discounting is the only way to sell wine directly to consumers.