Wednesday, 24 June 2015 11:53

Wine Clubs Increase “Traffic”

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Wine Clubs may be the way to increase “foot traffic” in terms of wine sales, according to wine marketer, and author Bruce McGechan.

An expert on selling wine on the internet and author of the books Wine Marketing Online (2013) and How to Sell Wine Online (2011), McGechan says wineries can increase sales traction and consumer loyalty via the instigation of a wine club. What’s more it is a more effective way of increasing margins, than a simple on-line store.

“I am seeing how eCommerce as a percentage of sales is not growing as fast as wine clubs,” he says. 

It is also difficult to gain “foot traffic’ on a web site, given the plethora of wineries your own company is competing against. Many consumers who purchase wine on-line will do so via a generic company selling a wide variety of brands. Which means it is extremely hard to provide your own story to the end consumer.
Overseas these factors have led to a direct increase in wine clubs, which McGechan says have grown exponentially in Australia for example in the past six years.

“In Australian in 2009, 20 percent of wineries had a wine club. Now we estimate that around 60 percent have some sort of one.”

So What Is A Wine Club?

McGechan says there are various structures and not all are successful. For example some wine companies have a club that consists of an email being sent out on a regular basis, with special offers or details on wine to purchase.

“But that is not really a wine club.”

The next one is a discount club, where consumers are encouraged to join the website and by doing so will gain discounts.

“This is often prompted by email marketing and the consumer logs into the website and once logged in they become a member getting a discount. They might purchase one wine or 12 wines once or twice a year. But it’s not really a wine club.”

McGechan says you then come to the scenario where a request is made for credit card details – this is the distinguishing factor.

“When you have the credit card details (to be stored securely in a payment processor) and people have said we will buy wine regularly from you – that is a wine club. Those two things are the key elements of a wine club; a commitment to get regular wine and the handing over of credit card details.”

Another term for a wine club could be continuity club – given once you have members signed up, you also have consumers receiving and paying for regular amounts of wine, on a continual basis. 

“You send out certain wines on certain dates of your choosing.” 

Which McGechan says is far more cost effective than sending out one or two bottles ordered on-line via your website, ad hoc. 

“Why have a wine club? Higher margins,” he says. “When it comes down to it, that is the key one. We are trying to boost our profit through having higher margin sales.”

Wine Club Structures

Firstly the wine company needs to establish how often it wants to be sending out wine club member’s product. Are you able to provide a monthly service? Or is it best to stick to two monthly, quarterly or every six months? 

Then you have to offer club members a choice of products. Are they interested in receiving white wines, red wines or a mixture of both? What number of bottles do they want to receive? Two, four, six, eight or a dozen? What price range are they interested in? Are they keen to receive “special” wines that are under allocation? How often do they want to receive their wine? 

These are all structures that need to be confirmed prior to sending the first delivery.

While many may think offering discounts would be mandatory, McGechan says it isn’t necessary. Instead he believes in offering club member’s special benefits. They get the opportunity to access new releases, single vineyard wines, small parcel wines, plus the chance of one-on-one tours when visiting the cellar door, or attending member only events such as tastings.

How To Sell Wine Club Membership

The number one place to promote a wine club is via the cellar door. But staff need to be trained to “respectfully and naturally sell” this to visitors.

McGechan says the rough estimate is that two percent of visitors to the cellar door will sign up to a wine club, but given the on-going sales this is a very positive outcome.

“In America, the average spend by wine club members is $480. In New Zealand you could expect that to be around the $300 mark on an annual basis.”

The second way to sell the clubs is via events – such as wine festivals. 

Follow this up with email marketing, or direct mail and phone sales. 

Regardless of which way you sell it, you have to ensure that you are offering the consumer benefits – “these need to be well sold. Make sure the wine club is well advertised, especially in the cellar door. And make sure there is an opportunity to sign up on the spot.

“The aim basically is to sell clubs, rather than just individual bottles.”

Which makes sense given how many tourists visiting cellar doors do not have the ability to travel with their wine. By signing up to a club, they can ensure they have a nice “surprise” package arriving on a regular basis. You as a company gain a new loyal consumer, a regular form of income and a chance to promote your brand to a wide spectrum of individual consumers. ν

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