Vine Notes: Double wine club membership in three steps
How big is your wine club? Is it growing the way you want it to? Is it a significant part of your revenue? Want to lower your attrition rate? Ask anyone who owns a winery these questions and the answers always invariably come with a healthy dose of “I want more.”
Wine clubs represent repeatable, predictable revenue, and all winery owners want that. The trouble is, few of them really know how to create a great club, grow it, keep members happy and keep those members in the club long-term.
I was so intrigued by the idea of the attrition problem as well as finding ways in which to grow your wine clubs that about three years ago, we set out to find out how to drastically change and improve all the above - for good. After much trial and error, we figured it out. It’s not rocket science, but the implementation can come with some daunting tasks.
As you probably know by now, our company sells wine over the phone. We’ve sold more than $50 million worth of wine this way, and we’ve talked to 500,000-plus customers. So that uniquely qualifies us to make some observations and recommendations about this fascinating and highly-profitable segment of the direct-to-consumer (DTC) wine business.
After signing up several thousand customers for your wine clubs and managing those relationships for years now, as well as really identifying and documenting what works to keep customers in your club, I now share our best tips with you on how to double your wine clubs.
Tip 1: Simplify your club
We have found that the absolute best wine club with the lowest attrition has a quarterly shipment of four or six bottles. Small monthly shipments do not work as well as quarterly shipments. The shipping cost is just not worth it to the customer for two bottles, and they will cancel more often than with quarterly shipments.
Take it from the sales reps that have actually spoken to your customers. These are the parameters that work the best.
Tip 2: Build relationships ?- lower attrition
The attrition rate of members we sign up is in the single digits. In one case study, after only 12 months of relationship-building using the phone, we found that our client’s attrition rate went from well over 30 percent to just 11 percent. That represented over 3,500 club members who remained in the club over those 12 months who would have normally canceled the club.
Do the math: With an average 12-month club member value of $300 to $500, that’s a lot of revenue. When you give your wine club members attention with a personalized call, good things happen, and they stay in your club longer.
Tip 3: Call your customers
We have doubled some of our client’s wine clubs. Yes, doubled
them. Our wine club sales have been so successful that we have had to literally shut down signups for some of our client’s wine clubs.
You already know that blasting your customers with emails does not generate wine club signups. These incremental club signups only happened over the phone.
Tip 4: Call again after 30 days
We often sign up more wine club members over the phone than a winery’s entire tasting room staff. Impossible you say? Like it or not, visitors generally visit your facility to enjoy themselves. Rarely do they want to hear a “sales pitch” when they’re talking to their long-lost cousin who they just reunited with and came to Wine Country with to enjoy a free glass of your wine.
The amazing fact is that if you call that same person 30 days later - the magic number - they are much more likely to sign up for your wine club, especially if you can romance the experience and help them relive it on the phone.
Bonus: Give a cost range, ?not a fixed amount
Customers understand that the price of wines rise and the cost of wines vary. If you use a fixed pricing structure, you lose the ability to add certain wines to club shipments, because they do not fall into that price range.
Also, customers can become confused with the value of each bottle in their shipment due to the average bottle cost. If the total cost of a three-bottle wine club shipment is $60, the average bottle cost is $20. The customer might not be aware that one of the bottles was a reserve at $40 and the other two bottles were worth $10.
Lastly, sometimes it just comes down to dollars and cents. How much more work would you be willing to do and how much more money would you be willing to spend to double your wine club or to create an incremental $1 million of DTC sales per year? After signing up several thousand of your customers for your wine clubs and really identifying what works and what doesn’t, we think we’ve discovered many of those answers.
Jeff Stevenson (jeff@vinopro.com) is chief executive officer of VinoPro, a Santa Rosa-based direct-to-consumer sales, marketing and technology solutions company. It works with Treasury Wine Estates, Beringer, Chateau St. Jean, Iron Horse Winery, Benziger Family, Ferrari Carano, Gloria Ferrer, B.R. Cohn, Hello Vino and dozens of other winery brands in addition to the Loudmouth Apparel Companies. VinoPro in 2014 was named to the Inc. 500 list of fast-growing companies for second straight year, attaining 190 percent sales growth for the past three years.
