I have before written about what I call the PPQ, the inter-relationship between pricing, packaging and quality that delivers value customers at the point of consumption. During this year's Oregon Wine Symposium, I learned a new and particularly impressive value equation presented by Rob McMillan, Founder of Silicon Valley Bank's Wine Division. McMillan quantifies a brand value as follows:
value = (wine quality x brand experience)/ price
Measuring experience is important for two reasons. First, it underscores that we're essentially in the hospitality business -- every point of contact with a consumer is part of a winery's experience. (Contact points aren't limited to tasting room visits and include e-newsletters, club shipments, phone conversations, off-site events, etc.) Second, experience is an important differentiation tool. Differentiation provides the unique and compelling factors adding special value for consumers and helps prevent trade-offs to other brands.
A winery can differentiate in many ways -- packaging, pricing, winemaking philosophy, story, etc. but the experience can arguably be most memorable. Think about it: How many wines are "made with passion from a great vineyard"? Now how many of those actually deliver a unique and compelling experience --a special one that makes a customer want to return again and again?
During a recent trip to Oregon's Hood River with friends, we decided to do some wine tasting. Phelps Creek is located on a public golf course and it happened to be snowing, so it was not only beautiful but we had the tasting room to ourselves.
In the wine industry, we tend refer to “sales” and “marketing” in the same vein, often using the terms interchangeably. We create “sales and marketing plans”, appoint Directors of “Sales and Marketing” and generally know that we need both functions to operate successfully. However, there exists a good deal of confusion regarding the purpose and specific activities accorded to each activity.
On Tuesday I had the pleasure of being interviewed by Laura Lawson of WineCrush radio. We discussed my June 2009 article for Wines & Vines regarding common mistakes new wineries make. Click here to listen her show. This episode also features Rob McMillan of Silicon Valley Bank.
The below article appears in the June 2009 issue of Wines & Vines:
5 Mistakes New Wineries Make
In a recent post, Top Five New Winery Mistakes, I cited lack of branding as a common omission in the business planning process. Brands are often confused with labels, logos and vineyards in the wine industry. I’ve even heard someone refer to his business card as a brand.
1. Neglecting the business planning processes: Too often, new wineries launch without a roadmap -- a mission, vision, set of defined goals and aligned strategies and tactics. Owners and operators spend countless hours tending to vineyards or seeking grape contracts and debating desired styles, aging vessels, and packaging, and yet surprisingly little (or no) time is dedicated to concretely defining the direction of the business.
The tendency to create a label early on or first in the branding process is understandable. From the producer’s perspective, a wine label is the visual extension of the winery’s “raison d’être”, and is therefore a crucial part of the wine marketing and brand communication process. From a consumer’s perspective, labels are often the first cue in the purchasing decision and one of the most memorable aspects of the winery after consumption.
Creating an email marketing campaign for your winery is easier and more cost effective than ever before. Popular sites such as Constant Contact, IContact, and Interspire offer customizable templates, list management and reporting metrics. Best of all, they provide the ability to drive traffic to your site and increase sales -- all at very competitive prices.
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