Wine clubs are big business, and for many producers, the most reliable source of revenue. But lots of wine clubs feature the same benefits: tiered discounts, access to pre-release wines and an email newsletter. It might be enough for the moment but is it enough for the future? Here are some tips on how to start the process of evaluating your wine club:
1. Know your non-winery competition // In the online wine world, there are big moves towards offering curated packs and subscription deliveries. Sunday Wine Co., Good Pair Days & The Drinks List all offer similar concepts with some significant advantages: their range wines can be sourced from anywhere, at a huge range of price points, with unmatched personalisation. Furthermore, it’s not an add on to a business, it is the business. These are beautifully branded, customer centric models aimed squarely at brand discovery, convenience & education. There is a lot to learn here for wineries, but remember, you have one thing they don’t: the lasting memory of your venue or event. Explore these in detail and see how your own offering compares, particularly if you are working on how to capture a younger demographic.
2. Know your winery competition // Spend some time online and research what your regional competitors are up to. This is valuable to understand the language used, the benefits and the discounts offered. What are the common positioning statements (i.e. price, status, convenience, education or experience)? Where does your club sit in comparison? What can you offer to your visitors that will give you an advantage?
3. Collect the right data // At the least, you should be measuring the following:
a) number of visitors and how much they spend, b) conversion of these visitors to wine club and c) how long the average wine club member subscribes for and why they leave
This is all about getting some facts behind you so you can make good decisions moving forward. There isn’t much data for Australia but in the USA it seems that 18-36 months is a common lifespan for a wine club member as described here or, expressed as a percentage of loss of 16% here. Ross Goodwin in his 2013/14 research suggests that conversion rates to wine club ranged from 1.5 – 6.5%, and conversion rates to the mailing list averaged at about 10%. Again, these are not local figures but do provide some insight into what is possible. The key is to keep your records so you can track the movements in your business. At the least, you should have a strategy for your guests who seem to be reducing their spend and a strategy to support your top members. Go through each benefit you offer and ask: ‘how does this keep our members connected to our brand?’.
4. Keeping your members for longer // Why are your wine club members leaving? What is your process when this happens? Anecdotally, the main reasons members cancel is a) minimum purchase is too much wine/cost b) it is not flexible enough in terms of wine choice and delivery timing c) the incentives aren’t worth the spend – i.e. if one of your incentives is an annual release dinner in your home capital city, this will not appeal to your interstate members. Gaining these insights at a business level requires some time on the phone with your customers and an enquiring conversation at the cellar door.
5. Reward your long term customers but don’t rely on them // This great article by Larry Lockshin states the following :
”A heavy focus on members of your wine club or other loyal buying groups to the detriment of attracting new or infrequent buyers will result in a sales decline over the long run. Yes, use the wine club for heavy buyers, but make sure you have activities such as events or even cellar door to add new members to your mailing list”.
A sound strategy will include new customer acquisition in addition to the rewards directed at your already-loyal customers. Make sure you are working on both.
Best of luck!