Next week, I'll be speaking as part of a panel at the Unified Grape and Wine Symposium in Sacramento. The panel is titled "How to Make Your Tasting Room More Profitable" and is being organized and moderated by California's most respected tasting room consultant, Craig Root.
I've spent a lot of time in the past eight years refining my thoughts on what makes a successful tasting room, and am at this point amazed to think one wasn't in our original business plan. An indication that we're succeeding is that, according to Craig, the sales and wine club signups that we see at the Tablas Creek tasting room are roughly double the industry average. I hope to see some readers of the blog at the seminar. We'll go into more detail than I have here, but below are a few highlights of what I think are important things to be thinking about before, during, and after a customer's visit.
- Work to build your traffic year-round. It's a lot easier to sell wine to people who have opened your front door than it is to sell it to people who haven't.
- Cultivate partnerships. You are not the only one in your area with an interest in bringing people into town and giving them a good experience. Reach out to local hotels and bed&breakfasts and create co-marketing opportunities and specials that will give them a reason to be emailing their customers about you. Work with local restaurants to put together dinners that both you and they will market. This expands your base, supports your partners in your community, and ensures you stay visible. And don’t neglect the other winery tasting rooms in your area. Open houses every six months are easy and fun.
- Encourage your supporters to come back and bring friends. You’re probably offering free tasting for your wine club members. Are you doing so for their guests? Are you offering some reward to members who refer you business?
- Understand that your marketing (and your presence in the wholesale market) does have an impact on your tasting room. Make sure that you’re in the places where potential customers are. Go to wine festivals in your catchment area. Work particularly hard to ensure that your wines are on the lists of restaurants in your area. Know that one benefit to your wholesale marketing is spillover into your tasting room.
- Do your part to ensure that you get editorial coverage. Most wineries think of press as principally beneficial to their wholesale marketing. And great press does have a multiplier effect in wholesale, as the reviews you get are echoed by distributors and retailers. But don't neglect the impact it can have on a tasting room. When we got our last set of reviews from Robert Parker last August, our tasting room traffic rose 20% and our sales 35% over the rest of the year. Be sure you are at least covering the basics by sending samples of all your new releases to the 20 or 30 key writers around the country a few times each year. Total cost: around $2500 plus a few cases of wine. Possible benefits: enormous.
- Make sure that you focus on each customer interaction. I am amazed by how many people we get in our tasting room who tell us stories of other tasting rooms with disinterested servers, overcrowded tasting bars, or salespeople whose only interest is a club sign-up.
- Have sufficient staff on hand for your busiest times. An enormous piece of being able to ensure a good customer experience and the sales that result is having sufficient staff on hand to handle your busiest times. This necessarily means that in slower times you'll be overstaffed, but if you calculate the value over time to your business of a single club sign-up or a single dissatisfied customer who would otherwise have bought a case of wine and told their friends, the cost of labor seems pretty minor.
- Focus on giving everyone a memorable experience. If you do so, the wine (and wine club) will sell itself.
- A hugely successful tasting room may convert 5%-7% of its customers into club members. That means that the vast majority of the people coming through your tasting room are not going to sign up on the spot. Be careful... if you are incentivizing your staff for club signups you may be encouraging them to focus their best efforts too narrowly.
- Sell through education and enthusiasm, and make sure that the customers know the options in front of them.
- Every person who leaves your tasting room happy is a source of repeat business and referrals.
- Get an impartial perspective. Consider sending in friends or family members incognito to get a sense of what the typical customer is experiencing. Make sure it's someone who will be honest with you.
- Be generous with the little things. Remember that your primary reason for being is (probably) to sell wine. If you focus on making money on your events or your fees, you may be doing so at the expense of wine sales. Some ideas:
- Comp your tasting fee on a purchase. When we raised our tasting fee from $5 to $10 but comped it on any wine purchase, we found that the percentage of visitors coming to our tasting room who bought rose from 65% to 80%. Even a one-bottle purchase means that sometime in the future, that guest is going to open a bottle of your wine, often with friends, and relive the memory of having visited you.
- Give away a logo glass. You’ll spend less time doing dishes, and your glass provides a reminder of the experience. High-quality logo glasses sell for all of $2 in bulk.
- Make sure that your wine club members know they are appreciated. Send them a welcome packet when they sign up. Send a holiday card, and consider including a coupon (say, $20 off on their next order). It spurs new orders and keeps you top of mind.
- Keep the costs of your events reasonable. An inexpensive (even free) event and an incentive to purchase while your customers are there can drive impressive sales. Adding a night-of-the-event-only 5% discount to our semi-annual wine club shipment tasting parties more than doubled our average sales.
- Choose a wine each month to offer at a discount. This gives you something different to talk about each month in the tasting room, via email, or online (including through your social media). You can use this to focus attention on a new wine, or one whose sales are slow, or just rotate through your portfolio to raise awareness and excitement about the wines you make.
- Put yourself in a position to continue the conversation with your customer even after they leave. Don’t assume that your connection ends when your customer leaves the tasting room. There are powerful tools available to maintain and even grow a connection that begins in the tasting room.
- Build and use your lists. Are you asking all your customers if they are interested in joining your mailing list? Adding just a small percentage of your foot traffic to your email lists (let alone your wine club lists) can give you a powerful tool to communicate special offers, share information about events, and generally build an ongoing connection to your base. And once you have added these people to your lists, it's important to contact them regularly. An email every few months, with perhaps a print newsletter a couple of times a year, is generally seen as welcome rather than intrusive.
- Work with new media to stay connected. The tasting room is your primary venue for creating a personal connection with your customers. Social media sites allow you to extend that connection, and help like-minded consumers find and follow you, and hopefully become customers.
- Facebook should be a part of any winery’s marketing plan. With over 300,000,000 users, a significant portion of everyone's network is on Facebook. If you are not, you lose the opportunity to remain top of mind to a huge portion of your lists (it’s also a great way to make and maintain connections to distributors, trade and media).
- A blog (like this one!) is a great way to personalize your business, communicate your core ideas and principals, and drive traffic to your Web site. It’s probably your best opportunity to tell an extended story.
- Twitter can spur real-time interaction and feedback with an important (read: taste-making) segment 25,000,000 strong.
- Make sure you're a good partner. Whether you're using social media or more traditional email or print marketing, make sure you provide valuable content in addition to (and probably more extensively than) you push sales. Of course, sales are an important result of any marketing campaign, but if you cross the line and become one-dimensional or self-serving, or you'll push away the customers with whom you're trying to build a connection.
If you are going to be at Unified, and want the more detailed version of this, as well as the thoughts from the other panelists and Craig, our seminar will be 2:00pm on Thursday, January 28th. I hope to see many of you there!