Winemakers know, or should know, that wine club attrition is one of their biggest problems. Finding ways to keep wine club members should be at the top of the to-do list for every small winery marketer. Too often, it seems, wine club members, especially long term members, get little love from the wineries they support.

The best day in most wine club members life is the day they join. The usually get the biggest discount that the club offers that day. From there on, the relationship changes very little. Long term members get invited to the same club events that new members do, get the same special offers, etc. Yet long term members deliver way more value to the winery than the newbies, who may never buy enough to justify the discount they got the first day.

Why not ratchet up the benefits to long term members? Why not make them feel that their long term patronage is appreciated to a degree commensurate with their economic value? I’ll give you a couple reasons:

  1. Too many small wineries don’t understand how much more valuable a long term club member is than members of less than 24 months  standing. They may have an inkling that this is so, but they’ve never done the math.
  2. Small winery marketer’s too often don’t keep track of the lifetime value of their club members. They don’t collect the data in a way that allows for the analysis that reveals how valuable their best customers are, so they can’t do the math.
  3. Long term customers get taken for granted. Winemakers think, “he or she has been a member for years. They really appreciate just how good my wine is and will remain members for that reason alone”. They think their wine is so good, that it’s beyond the realm of math.

Well I don’t care how good your wine is, club members eventually feel taken for granted. I had that experience the other day when I walked into a grocery store and found the Chardonnay that keeps me invested in a winery’s club on-sale for less than I’ve ever been able to buy it for through the winery. I stocked up, then quit the club.

I know, the winery doesn’t set the retail price. I know the grocery store may not have made a cent on the sale, viewing it as a loss leader. But I also know that the winery could have offered me that wine at that price sometime during our relationship of many years.  Or maybe they couldn’t have, for the reasons listed above. Which means a small winery marketer is not doing their job.

Gregory Dal Piaz of has a great snarky post on The Huffington post that exposes 12 types of wine consumers that you know, some all too well. This rundown isn’t particularly helpful for wine marketers, but it sure says a lot about, well, us.

I once published a book that had a very specific regional appeal. After a visit to each of the area bookstores and many specialty stores promoting the book, I put the it in the hands of a local distributor. He had great success selling it and reordered often in the first few months. After that, most folks who were interested in the book had a copy and sales dropped off. I expected that.

What I didn’t expect is that the distributor’s checks to me would bounce, that he would stop answering my calls, etc., etc. I was so new to the publishing game that it took me a while before I figured out that I’d been burned. I later met another publisher from that area who knew all about the distributor. It turned out that he was a notorious slow pay/no pay kind of guy. If only I’d known.

Small wineries often suffer the same fate. Big, established, honest distributors aren’t interested in handling most small wineries, so we end up in the hands of little distributors. Some of these do a decent job. Others try, but for one reason or another, can’t deliver on promises. Still others are flat out dishonest. It can really hurt a small winery to lose cases or pallets of wine to a distributor who can’t or won’t pay.

Peter Norris of Vino Family Vineyards is a guy who has suffered that pain. As a marketing professional in the internet age, he has found a way to fight back. His new website, lets people dish on the bad distributors they’ve dealt with.

Here is the kind of review you find, an item about a distributor in Texas:

How are they still in business? What is the state of Texas doing here? They do not pay actually call with interest in the brand say they’ll pay store the wines in a heated storage area and then complain because the wine went bad.

I have talked to at least 5 suppliers who were never paid by these guys. Texas will not go after them and other distributors will tell you to stay away.

Not all of the reviews are bad. Readers can post the names of distributors they’re interested and those with experience  rate them. A good number of these have gotten positive reviews.

At the moment, there aren’t a lot of distributor reviews, but that could change if the idea gets around and more wineries contribute. There are already enough reviews of bad distributors to make a visit to the site worth while–if only for the entertainment value.

I’m not sure how long this site will last. You can be sure that some of the distributors named will be calling in their lawyers. Until then, it’s another tool that the prudent small winery marketer will be aware of. Pass the word.

Savvy small winery marketers have long known that direct sales to consumers are their most important sales channel. For the smaller outfits who can’t get into the three tier system, or who can’t afford to give away the margin the three tier system requires, direct sales are the mainstay of the business.

Silvara Vineyards Tasting Room near Leavenworth, Washington

Silvara Vineyards Tasting Room near Leavenworth, Washington

What’s more, as the three tier system hardens through distributor consolidation, and direct sales to out-of-state customers are threatened, direct sales at the tasting room become ever more important.

The point is made yet again in Wine Business Monthly’s 2009 Tasting Room Report. According to the Wine Business study, 66% of 2009 direct sales took place in the tasting room , up from 59% in 2008. The study also found that  wine club sales have softened and sales through eCommerce have softened even more. It’s pretty easy to conclude that for the near term at least, small winery marketers should be doing everything they can to drive prospective customers to their tasting rooms.

The action item here is to review your messaging in each of the communication channels you utilize. Whether it’s Twitter, Facebook, your Web site, your PR activities or plain old newspaper advertising, make sure that everything works together to drive prospective customers into your tasting room.

Look at your marketing activity calendar and try to have some promotional activity going on each weekend to attract tasting room traffic. Plan events and activities that will draw people in: vintage release parties, chef’s days, sunset tastings, music, barbeques. Team up with nearby wineries to promote special regional tasting days. Get your promotional material into the lobby of local motels and hotels to attract tourist traffic.

Make sure that when prospects arrive at the tasting room, they have a terrific experience. Clean up, staff up and train to insure that every visitor is treated well and asked to purchase. Have special winery-only promotions that incent visitors to buy now, and to come back for future winery-only deals. Nicely discounted, three packs, six packs and cases can really help improve cash flow. Selling winery branded t-shirts, caps, aprons and the like are also proven ways to fatten up sales tickets, so make sure you have a reasonable, attractive inventory on hand. And of course, try to get each tasting room buyer to sign up for your wine club.

One of these days we’re going to see a much larger percentage of sales through newer channels like eCommerce. We’ve got to continue to work on branding and on establishing the resources necessary to make that happen. For now, though, the tasting room is the place to focus most of your  marketing attention.

I am the child of immigrants. My Dad’s grandfather slid into America after things went wrong for him in the Prussian Army, where he was a Colonel. My Mom’s people claim to have snuck over in the rowboat behind the Mayflower. (A cousin finds that they were actually indentured servants in that first wave of immigrants after the first colonies were barely founded).

I am the child of an American military family. We lived all over the world in a subculture that was remarkably diverse and open . I spent the last of my childhood and the whole of my adolescence in Hawaii. People talk about the melting pot of cultures, Hawaii is a bubbling wok of cultures.

I sometimes hire guys from the Home Depot parking lot to help me in my olive orchard. One guy who I’ve hired a bunch of times is from a family that has been in our area from the Spanish times. Another who was out recently spoke very little English and I supposed he was FOB. It turns out he’s third generation, and  a full-on citizen who had to go to work in the fields early, didn’t get much education, and didn’t really have a need to speak English at home or in his neighborhood. (He’s got a steady job working for a strawberry grower but he hustles pick-up work on the weekends because he’s got a daughter going to Stanford). So I’ve learned that you can’t tell who is legal and who isn’t just by the clothes they’re wearing or their shoes or where they hang out.

I worry that Arizona’s new laws giving police a free hand to stop “suspicious characters” and ask for their immigration papers will be used to harass people who look like the folks who work in our vineyards, orchards and wineries. I also worry that Arizona’s bad idea will spread to other states. I hope that folks in the wine industry take a stand against this bad solution to the real and complex issues of immigration and labor policy.

Courts in France just convicted 12 french wine industry figures for selling E&J Gallo millions  of dollars worth of wine labled Pinot Noir that were actually blends of different grapes, including Merlot and Syrah. According to Gallo, the bogus Pinot went into Gallo’s Red Bicyclette brand that were sold in 2006 and possibly before.

I did a Google search on this topic and found little mention of this fraud and Gallo’s place in it until this week. It makes you wonder, when and how did GalloRedBicyclette learn of the fraud and what did they do about it? The ATF has been in discussions with French prosecutors about the matter for over a year. Nobody mentioned it to consumers until now.

Decanter got on to this story first with an article on February 3, 2010 that included this slap-your-forhead tidbit:

Between 2006 and 2008, [supplier] Sieur d’Arques allegedly sold 135,000 hectolitres of vin de Pays d’Oc labelled Pinot Noir to E&J Gallo for $4m (£3.5m).

However the total production from those supplying the French distributors amounted to 15,000 hectolitres a year.

Battut [the French prosecutor] said the case proves the defendants were knowingly involved in cutting the Pinot Noir with much less costly Merlot and Syrah, delivering the equivalent of 16m bottles, or 460 oil tankers  and making a profit.

Even better, from the same article:

According to French newspaper La Dépêche, one of the accused said that had the suppliers ‘been asked to put Yoplait on the label, they would have’ in order to satisfy customer demand.

I wonder what the marketing brain trust in Modesto is cooking up to mitigate the fallout from this little disaster. I’m sure the temptation is to blame it all on the French, and why not? A lawyer for one or more of the French defendants has raised the stupid American , no-harm, no-foul defense.

Jean-Marie Bourland, a lawyer for [defendant] Sieur d’Arques, did not rule out an appeal. “There is no prejudice. Not a single American consumer complained,” he argued.

Well, maybe consumers of inexpensive Pinot don’t know the difference between the real and the fake. But shouldn’t America’s biggest wine company? Don’t they have a particular responsibility when importing wine to make sure it is what it’s supposed to be? And when they get it wrong, do they have a responsibility to make it right with defrauded consumers? (Not that I have any idea how you’d do that). Or do they just get to shrug their shoulders, say “we got taken, what can you do?” and let it slide? Watching how Gallo–and the French wine making industry–deals with this will be an interesting lesson in brand disaster management.

At the moment, notes regarding the 2006 Pinot are still on Gallo’s Red Bicyclette site. The entire growing season is described just as though someone from Gallo had been there keeping an eyes on things.

I don’t think you can overstate how important the search engines are. The Yellow Pages used to be the small businesses one absolutely-necessary advertising venue and were a wildly profitable business for their publishers. Search engines have killed them. Killed them dead. Search engines are far more useful than the Yellow Pages ever were and people use them in ways that the yellow page publishers never dreamed of.

Google gets over 68% of all search traffic

Google gets over 68% of all search traffic

Even though social media like Facebook and Twitter are getting all the buzz, search engines are more important. If a Facebook friend recommends a winery, or someone sends a Tweet about one, it’s likely that you’re going to a search engine to find out more about it. And if a millennial is out tooling around in a BMW using their iPhone to find a place to taste, or a boomer is sitting at home planning a day of wine tasting, a search engine is going to play a role

I believe that one of the best investments any wine marketer can make is in search engine optimization (SEO) and search engine advertising (SEA). SEO is what you do to get the search engines to notice you and show you in their search results. SEA is a form of advertising that gets you onto the results page of relevant searches

Organic listings vs. paid advertising

Search engines display two kinds of results when they respond to a search. Unpaid “organic” or “native” listings are shown on the left side of the page. Because they are unpaid they are thought to be more trusted by searchers and therefore more valuable than the SEA listings that are shown on the right side of the results page and, often, across the top. Whether we’re talking about organic or paid ads, the goal is to be on the first page of listings because most searchers don’t look any farther.

The reason to consider search engine advertising is that it’s almost impossible to get onto the first page of the organic listings no matter how much search engine optimization you do. I’ll prove it. Right now, open up a new window and do a search on Paso Robles Tasting Rooms.

Google, which by itself gets 68% of all search engine traffic*, shows a map that takes up a big chunk of real estate on the first results page. In the space that’s left there are just ten listings, only two of which are wineries. Instead, the listings are wine associations, and “about” sites. These “aggregators”, as they’re called, are sites that for one reason or another, list many other sites. This  legitimate cross-linking gives them an advantage with Google and they show up early in just about any search you do.

Because of the map and the aggregators, you probably can’t get onto the first organic results page. You can, however, get there with an ad.

Can you buy your way to the top?

Advertisers bid for positioning in the ad results by telling Google how much they’re willing to pay when someone clicks on their ad. The more you’re willing to pay per click, the more likely your ad is to get shown. If you’re willing to pay enough, you can get to the first results page and even to the top of the page. But there is a wrinkle.

Google only makes money when searchers click on an ad. So if two advertisers are bidding the same amount for placement, it’s in Google’s interests to show the ad from a site that is more relevant to the search and more likely to be clicked on. Positioning on the map works the same way.

So the message is clear, if you want to be on the first page of Google results, you’re going to have to do three things:

1) optimize your site for the search engines
2) be sure you’ve registered with Google Maps
3) advertise

What do search engines want?

Microsoft's Bing gets barely 8% of search traffic

Microsoft's Bing gets barely 8% of search traffic

Search engines send out “bots” or “crawlers” around the Internet that look at web pages to determine what the content is about and to note links between pages. When a search query comes in, they use complicated algorithms to score each website and serve up the ones with the best score. Scores are based on:

  • Page titles, keywords, and meta descriptions in each page’s html
  • Page text content relevancy
  • Number of incoming links from other pages with relevant content
  • Number of visits by others who make similar searches
  • How popular a site is
  • A bunch of other factors that the search engine companies keep secret

There are many, many outfits offering SEO services. I don’t think it’s a good investment. Most of what they do, you can do. Where they have an advantage is with cross-linking. The search engines like to see links between your site and other sites with content relevant to a search. Think links from other wineries, wine associations, and wine review sites. But any inbound link gets the search engines attention, and that is something the SEO services count on.

Many of the SEO services operate technology sweatshops in India, the Philippines, and in Eastern Europe where boffins sit around managing a bunch of websites. When they get a new customer, they create web pages on the different sites loaded with keywords relevant to the customer’s business. Then they link those out to the customer’s web page. The bad news for SEO service customers is that Google employs hundreds of well-paid engineers whose job is to sniff out the SEO company’s cross-linking (and other tricks) and to neutralize their efforts. When you sign up with an SEO firm you’re betting that they’ll be able to beat Google. I don’t think that’s a good bet. It may work for a while, but that’s all.

Here is what you can do:

Action items:

  • Be sure that every html page and graphic on your site has titles and meta descriptions relevant to that page’s content. Content management systems like Joomla, Jadu, Wordpress and Movable Type make this easy. (If you’re not running a CMS, plan to include one in your next web upgrade).
  • Review your text to be sure that you talk about your tasting room and your Paso Robles location on multiple pages on your site. (Make sure that this is in text and not as part of a graphic. Google looks at titles associated with graphics, but not the graphic itself).
  • Update text frequently. Google pays attention to how often pages change and give more points for newer content.
  • Trade links with other wineries and make sure that any wine associations or groups you’re involved with link to your site.

Next time:
In my next post I’m going to talk more about search engine advertising and describe the different strategies for getting your money’s worth.

*Note: This article focuses on Google, but Yahoo, Bing and other search engines work the same way. In 2009, Google got 68% of all search engine traffic and it’s lead is widening. In October of 2009 it got 80% of all search engine traffic.

Beyond critter labels?

by Brad Asmus

We all know about the success of critter labels. It turns out that labels featuring images of animals, especially if they are cute or uniquely rendered, stand out on a shelf and are memorable. There are so many of them in the marketplace, that they may no longer be working.

The folks at Baron Images wonder if their vintage pinup art might be the next wave. They’re looking for a winemaker to try out the concept and sent me a bunch of images to show around. I couldn’t resist.

There was a time when the TTB would have rejected labels with images like these out of hand. But they’re relatively chaste, given current societal standards, and certainly evocative of a simpler time. Who knows, you might slip them through. I’ve already got a tagline for the one with the redhead on the banister.

You wouldn’t think of selling wine at your winery without adequate liability insurance. But what about selling your wine via the Internet? Are you aware of the full range of new liabilities that the Internet presents–and are you covered?

Almost without us noticing, wine businesses have become data management operations. We collect production data, manage inventories, plan our budgets and manage our finances using computers and in the process create vast seas of data. We use the internet to communicate with customers and suppliers via web sites, newsletters, email, and social media.

Did you ever stop to think what would happen if a malicious computer virus took hold and wiped out all your data? What would it cost you to recover?

What if a hacker broke into your system and stole your wine club member’s credit card information? What if you make a mistake on your website and post information that is incorrect, misleading or—at least in someone’s eyes—discriminatory? Could you mitigate the problems and absorb the financial losses?

Not worried yet? Consider the Fair and Accurate Credit Transactions Act or FACTA, a set of federal regulations intended to protect consumers from identity theft. The Act contains a provision that requires any entity with a “covered account” to have a written plan to detect breaches of consumer data. Depending on how much business you do on line and the damage to customers whose data gets stolen, not having a compliant written plan can turn a big problem into a major disaster.

Or lets say you’re a winery in Minnesota and suffer a data breach. Did you know that Minnesota’s Plastic Card Security Act requires breached companies to reimburse card issuing financial institutions for the costs associated with providing “damaged” cardholders with the notification of the breach, cancellation and re-issuance of cards, closing and reopening accounts, stop payments refunds for unauthorized transactions charged to their accounts.

Luckily, there is insurance. General Liability, Property and Crime policies are the traditional protection. Unfortunately, such policies were not designed to provide coverage for the full range of data related liabilities. In response, Cyber Liability and Internet/Network Risk insurance policies have been developed. Coverage can include:

  • First Party Coverage that protects
    • information assets,
    • business interruption,
    • cyber extoration,
    • expenses related to crisis management
    • identity theft.
  • Third party coverages such as:
    • professional services including errors, omissions,
    • content and media liability
    • network security, and privacy.
  • Plans and deductibles are normally custom tailored to meet the insured’s exposures.   Limits are available from $100,000. per claim to more then $5.0MM per claim and deductibles as low as $500. per claim.  Policy premiums are very affordable and in certain policy forms included as standard coverage features. 

    If you haven’t spoken to your insurance representative about the new threats involved with e-commerce and the networked computing environment, you should. And if he or she doesn’t seem to know much about cyber liability or think it’s a very big deal, keep looking until you find a representative who does.

    James Hilbrant is an insurance professional at Winery Care specializing in the wine business.

    It’s raining hard in Pleasant Valley and the pruning crew in the pinot vineyard across the way is huddled under the eves of a winery building. They’ve got about half of the vineyard done and the long canes that held last years grapes are lying on the ground between rows. When the crew finishes pruning, they’ll gather up the cuttings, make a big pile and burn them. It will be money going up in smoke.

    Eight year old wreath on wine country tool shed.

    Eight year old wreath on wine country tool shed.

    Grapevine cuttings make great wreaths. They have a rustic, wine country look that appeals to many and they last for years, even outdoors. Decorators love them, especially the big, thick wreaths that make a real statement. They’re easy to make; someone with quick hands can twist up three or four big ones in an hour. And they retail for anywhere from $20 to $100 or more, depending on size.

    Christmas is, of course, the easiest time to sell them, but they actually move all year long. Just ask the folks at the Napa Valley Grapevine Wreath Company They make a year-round business out of it. They’re real artists of the grapevine who weave the stuff into peace signs, bottle carriers, and a variety of baskets in addition to wreaths.

    Vine cuttings are at their most workable when freshly cut, but they stay workable for weeks and soaking them in water makes them pliable again even after months. If you keep a pile around, you can put your work crew to making wreaths on days when you would otherwise have to send them home. And when the holidays come around again, you’ll be able to generate income from something that would otherwise just go up in smoke.