Once we get into December, things really slow down for us. The cellar, which has been on a three-month sprint, has put most of the year's wines to bed. In the vineyard, the vines are going dormant, we've seeded the cover crop, and there's not much to do but hope for rain and wait until pruning begins in January. In the market, most restaurants and retailers have made their buying decisions for the holiday season and aren't really interested in seeing anything new. Our tasting room, which might see 600 people a week in high season, drops to a third of that. So, it's the time where I try to look back at what we've done for the year and evaluate how well we've done it. I talk to other wineries, and industry experts, to see whether what we've observed is part of a larger trend, or if we're an anomaly. In almost every one of these conversations, I hear the comment that we track data that most wineries don't.
Now, I'm something of a data geek. I hate not being able to test a hypothesis out against real numbers. And I hate it when I feel that the data that we're capturing doesn't represent the critical decisions that customers make. Because that's the important thing about data: it lets you know, beyond anything anecdotal, whether you're doing a great job or not. Are we taking great care of our tasting room customers? Are we offering them wines they want to buy? What about once they are club members? Do they feel special? And do we keep evolving along with the rest of the wine community?
I feel like many of the things we track are pretty fundamental, and am always surprised that not every winery feels the same way. And, in fact, most of these aren't particularly wine-business-specific, and would apply to any retail business. Here are the things that I think are baseline information:
- Your real traffic. Most wineries track the number of transactions, the number of wine club signups, and the number of tasting fees. Fine. But there's lots of context in here that can slip through the cracks. Do you track the number of people who don't pay a tasting fee, whether because they are club members, because their tasting fee is comped on a purchase, because they are industry members, or because they share a tasting? You should be. If you're not, how do you know how to evaluate a day where you make $1000 in sales to 20 customers? If you only have 20 customers walk through the door, that looks a lot better than if you had 100. Plus, traffic is remarkably consistent year-over-year, and knowing how busy certain times of year are helps you staff appropriately.
- The percentage of your traffic that purchases. For us, this is easy, since we comp the tasting fee on even a single bottle of wine. And so far this year, just over 12% of our visitors have paid tasting fees. I'm happy with this level. But knowing what percentage of your visitors liked things enough to make a purchase (or, conversely, couldn't find anything that they wanted to buy) is a great indicator of how you're doing.
- The percentage of your traffic that joins your club. Absolute numbers of club members are, ultimately, what impacts the bottom line. But percentages are more informative. They are the best indicator of how often you really turn someone on to what you do. And they help you know whether you're maintaining the quality of your experience when things get busier. If you're not, check your staffing levels.
- Your average sale per customer (or per transaction). You can measure this either way, but knowing how much your average customer bought is critical. Fundamentally, that's your report card on how well you did.
- Where your sale originates. Is a purchase made in your tasting room, by phone, or online? Knowing that you've sold $20,000 in the last week isn't nearly as useful as knowing that you had $14,000 from your walk-in traffic and $6000 in response to an email you sent out to your mailing list.
- How long your members stay members. Or, conversely, your cancellation rate. Now, every club is going to have a certain amount of turnover. Customers get older, have health issues, lose jobs, and move overseas (or to states you can't ship to). That happens. And I'm really proud that our median duration of membership is nearly triple the industry average of 18 months. But unless you know what your baseline turnover rate is, and are tracking closely enough to see a spike, you can't be quick about finding out why and addressing what you find.
- What percentage of your emails get read. If a customer hasn't opened one of your emails in some time, this is a red flag. It could be that you don't have the right email address to reach people. It could be that what you're sending out isn't compelling. In either case, you should want to know. Of course, also check on anyone whose email bounces back. It's much harder and more expensive to make a new customer than it is to keep an existing customer. Put in the time it takes to keep your lists current.
- The percentage of your visitors from whom you capture contact information. Becoming a club member is something that a small percentage, at best, of your customers will do. Industry averages hover around 3%; we feel like with great wine and great service, you can push that up to around 10%. But that doesn't mean that the other 90% of your customers are a lost cause. Many of them purchase and would begin an ongoing relationship with you, if you can figure out how to do it in a way that would be welcomed. An occasional email letting them know about a tasting or dinner near their home? Or one that provides some useful insight into what's going on in the vineyards or at the winery? Probably welcome. Finding a way to start a conversation makes it more likely that they'll return to see you again on a future visit, that they'll want to buy the wines you make when they see them at their favorite restaurant, and that someday they'll become regular customers. Do you have a mailing list in addition to your club list? Do you provide information people want to read? And do you segment your list by region so you can target emails properly and not overwhelm people? You should.
You'll note that most of these data points are percentages. So without counting your traffic accurately, it's very hard to get the rest of the data right. Consider adding a button on your register to ring up a visitor who doesn't purchase. That means that the data is all contained in your point-of-sale system, and you don't have to reconcile paper tallies or Excel spreadsheets with your sales totals.
Whatever your method, having this information isn't just an opportunity to check yourself against your baseline. It creates a shared vocabulary that will allow you to evaluate your performance against your peers, and to interpret the data that's available through industry associations, seminars, and articles. And more than that, it's how you know if you're succeeding at your fundamental goal: to create an experience, and an environment, where your customers want to begin, and sustain, a mutually beneficial relationship with you.