Wine Marketing in the Internet Age: A Quiet Revolution

Internet wine marketing has finally come of age.E-commerce has evolved beyond the dot-bomb era, which focused on thethird tier (e-tailers).

The real change ishappening, quietly, at the first tier. Wineries large and small areeffectively upgrading websites, e-commerce and other e-marketing toolsto generate brand awareness, loyalty, and a serious amount of onlinerevenue.

This article explores the ways wineriesare successfully using the Internet. As a full-service marketing agencyfor over 30 wineries and associations, our perspective is broad, sothis article focuses on what's working.

E-commerce: Costs Fall, Functionality Skyrockets

Attentionskeptics! If your winery's consumer e-mail list includes just 1,000consumer names, you should be generating at least $2,000-$3,000 permonth in online sales. And no, you don't need to spend a fortune, oreven hire an outside agency, to make it happen.

Thecost of e-commerce technology--the online shopping cart--has droppedfarther than the Dow. What cost $50,000 for a proprietary shopping cart"solution" three years ago now costs $1,000.

Doyou want to offer your consumers the convenience of online sales?That's the question. One of our clients sells 70 percent of its 14,000case production directly to consumers via a quarterly newsletter. Dothey need an online shopping cart? No, but they acknowledge that manyof their consumers prefer to purchase online versus receiving a printcatalog. Consumer preference for the online channel, and their desireto build production, are reasons enough to upgrade.

Design: Upgrading the 'Nephew' Solution

Manywineries hired someone's well-meaning nephew to design their site threeor four years ago. At the time, few websites included a shopping cartso it was difficult to justify spending the money that it took toupgrade the design.

But consumer expectations ofdesign and usability are constantly changing; they expect a graphicallyinteresting, easy-to-use site. If your site has not been redesigned inthree or more years, chances are you're losing a lot of opportunitiesto sell and collect e-mail addresses.

Second, inthose intervening years, the actual cost of graphic design hasplummeted. There are some desperate designers looking for work. It's abuyer's market. If you have decent artwork and photography, acompletely redesigned website, with new copy, should not cost more than$10,000.

E-mail: The Killer Application

Seventy to eighty percent of the average winery's online sales are instigated through e-mail campaigns.

Toset-up an industrial grade e-mail program, you first need the software.The good news is that a permission-based e-mail database (not spam)will relieve your team of costly key-entry, and will allow you to sendprofessional, personalized, and attractive e-mails to your database.There are many providers of this software; we like a SanFrancisco-based company called Vertical Response (http://bensonmarketing.vresp.com).

This"opt-in" e-mail software is a different application than the e-mailprograms we all use to send and receive personal e-mails, one-by-one,which were never designed to manage lists or blast campaigns to morethan 100 recipients. These standard programs are great for managingsmall e-mail databases; not for coordinating and tracking 5, 10, or 50different e-mail databases.

Like e-commerce shoppingcart software, the cost of setting up a powerful d>AverageOrder          $150 - $400     $3,000 to $16,000 Revenues Generated

Clubs and the Tasting Room

Successfuldirect-to-consumer programs integrate the wine club, tasting room, ande-commerce into a seamless presentation to the consumer.

Yes,it's easier said than done. But as an owner, you should view all yourdirect-to-consumer programs as loyalty campaigns, from the consumer'sperspective. And you should organize your staff and incentive programto reflect this reality.

We work with a new winerywhose goal is to build a 20,000 case brand, with 95 percent ofproduction sold direct-to-consumer. They have (smartly) focused theirentire tasting room around generating club sign-ups. For example, thereis no case discount; the only discounts are available to club members,and they start with the first bottle. Their tasting room staff subtlydirects consumers to the club's advantages. They are signing up anaverage of 30 new subscribers every weekend, a spectacular result,especially for a modest-sized winery not located on a major highway.

Foranother winery, their web sales and e-mail newsletter sign-ups werepoor, but their wines are terrific and they have a great tasting room.We recommended moving P&L responsibility for the website sales intothe tasting room's. Result: online sales rocketed, and their e-maildatabase jumped.

Why? The staff understood thate-commerce sales took none of their time, and contributed towardachieving their monthly sales goals. Simultaneously, they made theconnection between e-mail registrations and e-commerce sales, and theire-mail database increased 600 percent in eight months.

The New, New PR

Newtechnologies are turning Public Relations on its head, blurring thetraditional distinctions between PR, advertising, and sales promotion.

Forexample, we're turning seemingly intangible editorial coverage intousable sales tools, within hours. Enews Monitor is a proprietaryservice we offer that scans 250+ news websites daily. If a client'swine wins a favorable review in the Wednesday Los Angeles Times, we cutand paste that great review into a shelf talker template. Then, the newshelf talker is uploaded to the client's website, and an e-mail and faxare blasted to their southern California list of retailers, salesmanagers and wholesalers. All this happens the same day.

ByThursday morning, their sales team can download the new shelf talkerfrom the website, print it out at home or a local print shop, and haveit up on shelves that day.

Another example. Thetraditional "press kit" is now an expensive, bulky relic that has beenreplaced by the CD-ROM. Compact discs are easy to carry, easy toupdate, and have 650 Megabytes of storage capacity--enough to store lowand high resolution photographs, scans of labels, wine fact sheets,presentations, etc. It's more user friendly for today's connected, butharried, journalist, and we can provide updated versions for ourclients on the fly. This same CD-ROM can also include full salespresentations customized for wholesalers, retailers, and restaurateurs.

Are these examples of new strategies in PR, salespromotion, or advertising? They are all three, mixed and matched usingtechnology that is faster, less expensive, and better adapted to theend user.

2003 Predictions

Predictions,always dangerous, nevertheless allow us to look into the crystal ball.I asked my team to suggest concepts and ideas that are being done on alimited basis now. What tools will rise to the surface and becomemainstream in 2003?

E-mail Aggregation: Morewineries will pool their e-mail databases, and send a single e-mail toa combined list much larger then any of them could build individually.A natural strategy for appellation groups, but it will be individualwineries that will spearhead this trend.

Online Affiliate Deals:More wineries will partner with food and luxury goods producers withsimilar consumer demographics, trade e-mail links, and pay a percentageon sales generated from their partners' sites.

Online Point of Sale:POS is moving online. More wineries will either use their websites tostore downloadable POS, and/or will use their online shopping carts toreceive, fulfill and track wholesaler orders for POS. Either way,efficiency goes up, costs go down.

Blurring the Line Between PR and Sales:As explained above, wineries large and small increasingly understandhow to translate hard-to-measure media coverage into tangible salestools.

Online Allocation Modules: Wineries will increasingly use the functionality offered by Nexternal (www.nexternal.com)and others that allows them to identify and offer their best customersa maximum quantity of product, at special pricing, for a limited time.The idea of the cult wine mailing list idea has moved online, andwineries and consumers both benefit. wbm