Wines & Vines recently published "Predicting Wine Club Member Behavior," an article by Andrew Adams who advocates tracking member data. He quotes Sonoma State University's Dr. Stephen Cuellar, who has developed a survival analytics model to help wineries increase retention. Interesting indeed, especially for those of us who love the intersection of economics and psychology in the newer field, behavioral economics.
To truly know your club members, you must track data. Successful club managers know qualitative data such as wine preferences, communication preferences, interests, peeves and more. They also measure quantitative data such as averages for retention and attrition, dollars spent per member and shipment, and investment per member.
Data alone is not enough. A winery must put into place a regular system to analyze this data so that processes can be developed to grow and improve service. With the number of U.S. wineries now topping over 8,000, competition is fierce, so club design and service are critical differentiators.
The primary challenge for most small wineries after the financial hurdle of investment in software systems is time. A winery whose club manager is also making and/or charged with selling the wines will have a difficult time adding this to-do list to his plate. And even a dedicated club manager charged with growing her club may not have the skill set necessary to collect, analyze and use data. As the adage goes, "if you can't measure it, you can't manage it."
So how is a small winery to incorporate data tracking, analysis and marketing process given all the other challenges of running the business?
Research is an area where our company adds terrific value. We use regularly research as part of our four-phase process and specialize in designing and conducting customer surveys for client projects. Our research may be part of a bigger project -- for example, developing a growth strategy, which starts with understanding the current strengths and gaps. Or it might be limited to helping a client better understand the desires of his club member base. Last year, we conducted research before a client embarked on a label redesign, so we were able to gain feedback from their distributors and address stated issues before the graphic process began.
Research can be a cost effective way to establish service benchmarks, measure progress and help management make business decisions. If you're thinking about how to begin a project, give us a call to discuss. And for those who would like to try it internally, below you'll find some quick tips:
1. Make it personal. "Dear Friend" does not grab my attention, but "Dear Dixie" just might.
2. Increase trust and response rate with confidentiality. Allow respondents to remain anonymous.
3. Incentivize responses with a selection of prizes awarded to randomly selected respondents.
4. Make it short. No one has 30 minutes to answer in depth questions. Fewer than 10 is best if at all possible.
5. Make it clear. Your email invitation should clearly state purpose, time commitment, survey period, and follow up actions that will be taken.
-Dixie Huey, Proprietor
In September of 2011, I posted about using business milestones as catalysts for growth. Surveying your key stakeholders -- customers, trade accounts, distributors, etc.-- is a method for gaining an understanding of your business's current position and perception. The knowledge acquired from a survey is also a great tool for charting a course of action forward to achieve your next milestone.
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