How Important is Wine Club Revenue? For several years I have been writing pieces on the importance of customer service as part of any wine club offering. Unfortunately, all I could do was infer the financial importance of keeping existing wine club members happy. Three days ago Rob McMillan wrote ANOTHER masterful piece based upon the results of a Silicon Valley Bank (SVB) survey of their winery clients. For those who are not familiar, SVB is one of the (if not the most) important commercial lenders to American wineries. Lead by McMillan, the Wine Division of SVB does lead the industry in its reporting on annual findings of the state of the industry. Their statistics are second to none! I found this on Monday but have been too busy to write a proper follow up and have been concerned that someone would to beat me. No one has! Why arent more people paying attend to this??? This should not only be read by EVERY American winery but every winery in the world who does business in America or wants to do business here. Every importer, every distributor, and every retailer should also read this. Wine clubs do not have to be restricted to wineries only. If I analyzed every graph Rob included (which I could) this would be very long, but that is for other places. Do people get bored drinking the same wine? The first graph and the discussion for total utility should answer that with an emphatic Yes! Simply, people like variety...they like to have different options and choices. A second important graph is the one showing the average time of club membership...and YES, I agree with Rob that 2 years is an EMBARRASSINGLY short time to be in a club. Why so short? I have written time and again that there may be wine in a wine club but there is almost NO customer service in them! When you scan done further and see the dollars amounts associated with each membership you have to ask yourself why almost no one provides a strong customer service component to their club. If you couple in the Wine & Vines and ShipComplaint DtC report there is no lack of money being spent...its growing like crazy...so more and more people are joining wine clubs but moving around (probably faster and faster) in America. Anyone can read this article, so you should be asking yourself a ton of questions...especially if you are in the wine business. Towards the middle of the pack for average time in a wine club by region is Napa at just under 28 months. Looking down at the average lifetime dollars spent by region Napa leads at just under $1800 per member. Would 2 to 3 phone calls a year (at 10 or so minutes a phone call) adding up to a full hour help double that membership time be a worth while investment of resources? Would the cost of a tasting room attendant for one hour (plus some incentive for membership renewal) be worth an additional $1,800 or more? Could those few phones calls be enhanced by simply connecting on Facebook, Twitter, Pinterest, and LinkedIn? (another two years of membership???) It doesnt take rocket science mathematics to calculate that more and more Americans are spending for low production, high quality wines. Are the only business people who can provide this kind of wine coming from domestic wineries? Do you perhaps see a trend developing? Today, with an international wine market every winery needs to make good quality wine just to survive. That was not always true, 10 to 15 years ago you did not need to but now it is a must. Today I see very few wineries practicing almost any customer service. In 10 to 15 years if you are not providing excellent customer service your winery will not be around to argue this point. svbwine.blogspot/2014/04/the-most-important-factor-in-wine-club.html
Posted on: Tue, 08 Apr 2014 18:38:09 +0000
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