Archive - April, 2012

What 1% increase in spending will sell you more wine?

Ironically, the answer is probably not by increasing the quality of your wine.

A vineyard tractor

Will this sell wine? (by @ryanopaz)

With the one exception, moving from a Parker (or other pointillistic) rating of 89 to 90, there is very little chance that you can find any benefit to a 1% increase in wine quality leading to a measured increase in wine sales. Yet wineries will spend thousands and thousands of dollars/euros every day to try to make it happen. They spend on things such as: a new bladder press that presses the grapes even more gently, a consulting winemaker to come in and tweak the style of their wines, or maybe a whole set of new fermentation tanks just because the current ones are not quite the right shape to attain maximum extraction. I’ve seen all of these implemented by wineries who were struggling to sell more wine. Each time the winery was looking for a way to get more people to buy their wine, but from what I can tell, all that was achieved was a larger bank debt and the same amount of wine being sold.

I’m talking about wineries with established markets and established ways of doing things. A new winery might quite rightly need to upgrade the materials they have as they begin to grow, but even in that case, measuring the quality of the wine in relation to the wine making gadgets’ fixed costs is a VERY difficult thing to do. As we used to say in the kitchen I worked in: “It doesn’t matter how fancy your knife is if you don’t know how to use it.”

The irony is that so many wineries are already full of fancy wine making equipement with shiny wineries and fancy bottles, and yet they have either forgotten to invest in a website, or the website they currently have hasn’t been updated in years. Today the website is not an option.

So what 1% increase in spending might help these wineries to sell more wine, if not by making the wine better?

If poor wine quality is stopping you from selling more wine then you will need to spend a lot more than 1% of your budget to improve the wines. If you’re selling wine already and you want to sell more, a new tractor is not going to make difference to your sales. The problem is, buying a tractor is easy to understand. It’s a physical object that you can touch and you know it’s there. Marketing, websites, and PR are less so. You can’t physically touch them and, like a ghost, that can be scary! “New wine press, no problem, I can see that and touch it and all is good! New online social media campaign? Well, I don’ t think that that will help much, plus I don’t understand it”.

Not understanding how something  works does not mean you don’t need it. 

I don’t understand how the hard drive in my computer remembers what I put in it, but that doesn’t mean I don’t need it. I buy it, and use it, because it is useful. Social media, and a functioning website, are not optional winery tools, they are as essential as your destemming machine.

That is if you want to sell more wine.

I believe that a 1% budget increase spent on your winery’s sales, marketing, or online engagement will make a small difference to your bottom line. Quite often a very large difference. If you have the courage, I dare you to try.

An example: What is your annual operating budget for your winery? 250,000 euros? 500,000? More? Less? Let’s start with the first one, where 1% gives us 2,500 euros. Take that money and go out and hire a professional, not a relative who took a weekend class in web design, but a trained professional, and have them sit down with you and teach you about Twitter, Facebook, or even help build your first blog. For that 2,500 euros, and a bit of shopping around, I bet you could get a new website and some in-house training. Maybe not the fanciest website, but you could trade that in for a Facebook fanpage, some Twitter help and more in house training. Now you’re set. Just remember to ask questions and get involved; this stuff won’t run itself.

Then spend 1% of your time each week engaged with it. That’s just 15 minutes a day.

2,500 euros of social media education and initiatives + 15 minutes a day = more wine sold. Guaranteed. Or rather you won’t sell any less wine. You can only gain.

This won’t happen overnight. I bet you didn’t learn to make the perfect wine your first day in the winery. It probably took some time to learn how to do it. That’s ok. It didn’t stop you from trying though, did it? No, you wanted to make better wine, so you went and did it no matter what. Next thing you know, you got the hang of it and pretty soon it became easier and easier. The same goes for social media.

By getting out there and talking to consumers and promoting yourself online, you will sell more wine. The social part of getting out there won’t be tangible, but your selling wine will be. What have you got to lose? With the crisis here in Europe impacting sales, wineries can’t afford not to try. Make 2012 the year you try something different.

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