At VingDirect, we exist to help family wineries grow their direct to consumer sales. Our winery clients receive education and training, customized consulting, and our Performance Tracker (PT) software, which provides actionable tasting room data. Ours is the only benchmarking tool in the wine industry and we’re happy to share 2016 learnings and insight to what we think will be important for increasing your family winery DTC sales in 2017.
Our data represents wine regions across the United States including California, Oregon, Texas and Washington. The PT tracks 5 KPI’s including Tasting Room Sales (Wine Sold Through Tasting Room,Tasting and Tour Fees Excluded), Taster Count (Number of Paid and Comp Tastings), Sales Per Taster (Wine Sales / # of Tasters), New Wine Club Members (New sign ups), and Wine Club Conversion (New Wine Club Members / # of Tasters).
If you’re not currently tracking tasters, that’s the one thing to start doing today! Knowing your annual taster count drives everything else in your business (i.e. how many of those tasters buy wine, join your wine club, etc.) These are all important metrics if you want to make solid business decisions that will drive and grow your DTC sales.
2016 data was very interesting, and our team had many ah-ha’s as we combed through it. In the aggregated data, we found that wine sales and tasters were up overall, but sales per taster, new club sign ups, and club conversion were down.
As we looked at the data by annual taster range, we found the highest club conversion is in the 1-6K taster range. In the10-16K taster range, taster count is up overall, but everything else is down. You may be wondering why 10-16K is struggling with wine club conversion. We believe 10-16K taster range is challenging because wineries are making a big leap to grow from 5-10K tasters. The processes and practices that made them successful when they saw fewer tasters may not work with the larger taster count.
When wineries make the leap into the larger range, it really changes the dynamic of the winery. You have to begin to think differently and change your processes. If you’re in this range and find yourself with lower club conversion and average sales per taster, we recommend segmenting your traffic and training your team on how to develop guest connections even during the busiest times.
If you know your annual taster count you can compare your performance against our member pool. As the second graph illustrates each tier has top winery performers. Those wineries are bucking the averages and they are raising the bar in the wine industry.
Wineries outperforming their peers focused on:
- Strong tasting room manager & team
- Engaged and focused management, who clearly communicate goals and expectations
- Adequate Staffing = exceptional customer service & guest experience
- Brand power = recruiting power! If you have a strong brand, you can command the team you want/li>
- Unique, diverse guest experiences
- Ongoing sales training (3-4% club conversion difference)
Wineries with below average results:
- 10+ wineries within walking distance or 10-minute drive
- Lack of Traffic control (Traffic spikes)
- Turnover or weak management
Staffing Will Continue to Be a Challenge
- Always be Looking
- Offer competitive salaries including
- Health and Vacation Benefits
- Recruit from outside the wine industry
- Provide sales training
- Provide management leadership training
Branding will be More Important than Ever Before
- Winery competition is stiff
- You must differentiate to thrive
The Leaders of the Pack in 2017 Will:
- Deeper Dive into DTC Channels
- Use Social Media to Drive Traffic and Branding
- Use Email Campaigns to Drive Incremental Revenue and Loyalty
- Focus on Tasting Room to Drive Relationships and Connections
- Use Outbound to Drive Loyalty and Incremental Sales
- Realize we’re a Luxury Business – Provide Luxury Service
- Success Starts from the Top Down
In closing, we believe it’s time for a wake-up call! It’s time to think differently, question the status quo, ask more questions, ask better questions, and then…listen carefully