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How to improve the use of social media in the wine business?

Social WineIntroduction: For over 3 years, we have worked closely with the Burgundy School of Business both as a company – hiring interns to work with the EWBC, and as a research engine – helping us conduct field studies on various subjects. This year, Aymeric Dehont conducted a host of research for us, which eventually inspired him to create a paper on the fragile relationship between wine and social media. We appreciate Aymeric’s hard work putting together his thoughts and trust you will share your feedback with him. Keep in mind this is from a very European perspective. 

How to improve the use of social media in the wine business?

Introduction:

As a Masters student in Wine Business in Dijon, the regional capital of Burgundy, I’ve continuously questioned myself on many issues within the wine and spirits sector. Yet, one of the most debated subjects has been the apparent effectiveness of social media. After attending the EWBC – Digital Wine Communications Conference, I have come to under that the wine & spirits industry, in general, hasn’t succeeded in its use of these new tools. Therefore, I wanted to get a better understanding on how to improve digital communication and what would be the ideal online strategy to follow.

This paper will provide a brief analysis of how social media is currently affecting the wine industry based on articles, marketing analysis and knowledge.

Social media and the impact on marketing

It is true that social media has attracted an inordinate amount of people over the last two decades and currently, almost everyone is using at least one of its platforms. In large part, this is because interaction between each other, and the community, has always been a basic need for humans, referring to the very famous Maslow’s hierarchy of needs pyramid.

As observed in the Nielsen Social Media Report 2012, social media is mainly used when watching TV in order to interact and function as ‘social care’ for customer service. Approximately, 47% of social media users were actively involved in social care. In 2011, more than 80% of the Fortune 500 companies were using some form of social media to connect with consumers.

Companies that are using these tools efficiently are not advertising, but instead creating bonds between themselves and the consumer; thereby establishing loyalty. The customer isn’t considered as an asset anymore, but as a person to interact with and to satisfy. Bear in mind that social media is made to connect remotely between humans, and being “connected” means interacting with each other. Advertizing is not an effective means to create a relationship with people, but rather a means to provide a straightforward message to the consumer without receiving direct feedback. 30% of consumers found advertising on social media annoying and only 25% are willing to pay attention to it, which proves that the use of social media is totally different from regular advertizing campaigns.

Moreover, the Nielsen report tells us how social media has impacted modern marketing. Indeed, consumers are now hyper-informed on many products; they continuously need to know more about the product or service they intend to purchase and want feedback from other purchasers through word of mouth. Social media limits uncertainty before purchase, and increases transparency of companies because the consumer gets involved and can have access to the company, thanks to direct contact with employees.

“Social media is word of mouth on steroids” said Amanda Hite, founder of Talent Revolution; Word of mouth is a major communication tool for the wine industry. Indeed, 80% of online shoppers are guided by reviews from other consumers. This is logical considering that shopping remains a social activity where people can interact with each other and share opinions on products. When you buy online, companies want to recreate this interaction between buyers through a digital experience by keeping that community feeling alive. Moreover social media helps to engage customers with brands and companies to change their advertising techniques. In other words, this is what we call Web 2.0, a place to SHARE and INTERACT with each other.

The internet user becomes the one who can tell the stories. For instance, France 24 opened a website, The Observers, where everyone can share daily news content. The pictures they took, the videos they recorded and, moreover, the events they have lived, can be shared on this platform and remain present well into the future. This is a great example of how people directly share experiences and opinions digitally using social media.

What about in the wine and spirits sector?

During the EWBC, I realized that social media hasn’t within the wine industry simply because they aren’t listening to the consumer. The industry believes that it is the consumer who must be better informed and more actively involved, not the company itself. For instance, in this advertisement from the Center For Wine Origins, https://www.youtube.com/watch?v=wUePmgc5HJQ, you quickly notice that they tell the consumer to “understand the terroir”. In other words, they are teaching consumers how to enjoy wine, as opposed to providing information that the consumer wants. Result: 74 views after 1 year!

So how do we improve the use of social media in the wine and spirit sector?

The wine industry, mainly in the US, provides us with several great examples of efficient strategies to follow. Let’s focus on some of them:

I really enjoyed the story of Barefoot Wines because it shows how small wineries can compete with big groups, thanks to online communication strategies and social media. Indeed, Barefoot Wines now has 4 times more followers than Jacob’s Creek with 370,000 likes on Facebook (135,000 for Jacob’s Creek) and more than 10,000 followers on Twitter (2,000 for Jacob’s Creek). Why the huge difference? Only because there is someone at Barefoot Wines who is constantly behind his computer interacting with people on several social media platforms.

Engagement is crucial to create a real relationship with people. Gary Vaynerchuck, founder of VaynerMedia, said he can spend 4 to 5 hours a day on Twitter to answer each tweet he receives. Nowadays, he has nearly one million followers. This is a great example of how to succeed in attracting people’s attention using social media.

Another interesting story is the one of the Pacific Rim winery, which invested around $10,000 in a social media campaign, in cooperation with two social media agencies: Grow Creative and Anvil Media. Their objective was to digitally educate consumers to gain market share with the retailers with an active communications campaign. To do so, they both created a website, rieslingrules.com and released a book “Riesling Rules Book” (65,000 books sold at this date), to be the leading voices om Riesling wines. The use of social media came later when people started to share their increasing passion for those wines and interact with each other and the winery itself. More than 30,000 people liked the Facebook page. Up until now, Pacific Rim succeeded in creating brand awareness and a fan base online.

Social media in the wine industry creates the opportunity for consumers to rate wines based on what they like. The use of applications on smart phones, commonly called “apps”, is extremely valuable for the wine industry because it allows consumers can say what they like, not based on “expert” opinion, but rather on their personal preferences.

In the end, wine is just a drink, but one which links people to each other, and social media is a tool to recreate that interaction online. With Twitter, Facebook or Tumblr, people can share their experiences related to wine and companies can help people connect with each other. A winery available, listening and interacting online with the consumer is a winery which is increasing its brand awareness.

In conclusion

We see that social media in the wine industry is generally being used more frequently and effectively in new world countries. The old world wine countries are still conservative, waiting for the new generation to come up and change the trends.

Social media also creates jobs, as community managers have become more attractive to companies to ensure a successful online presence and use of social media. The objective is to be customer oriented, able to be connected, listening and understanding the consumer’s needs. A simple and basic rule of marketing which the wine industry often forgets …

References:

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Age Verification Comes to Twitter

It is a common occurrence to be barred from entering a wine related website until you have confirmed your birthdate, or at least confirmed you are of legal drinking age in your country.

On Facebook it is already possible to stop under-age members from seeing certain content.

However, until now this could not be done on Twitter and the only way to conform to the letter of the law in certain countries, was to post ineffective notes on your profile such as “By following you confirm you’re of legal drinking age”, or worse, annoy real and legal followers with messages threatening to block them if they did not confirm their ages (as was explored here in November after an experience with Beaulieu Vineyards)

Twitter, in partnership with BuddyMedia (a social marketing suite of tools for large brands), have now launched and integrated an age verification service as part of the Twitter experience. From today brands can sign up to for Age Verification via https://age.twitter.com/ which will enforce rules that they describe as “consistent with standard industry practices”.

Expect to be sent a Direct Message (DM) if you decide to follow a wine brand that will direct you to a site where you will have to enter your date of birth before being approved. If you happen to fail it (because you are underage, under-attentive or under the influence) you will be forever blocked by that account. However, assuming you do pass, the good news is that you will not have to go through the process again for other Age Verified accounts. [more details from The Next Web]

What is not clear what happens if you make a mistake and need to correct the age associated with your twitter account.

These “standard industry practices” may be completely ineffective, and misguided, but until law-makers see sense this is here to stay and expect this to spread quite quickly amongst the brands owned by large multinational drinks companies keen to prove their ‘Responsibility’ credentials.

It will also probably not be long until the age verification process includes some external auditing and confirmation (from Facebook, or other online resources) which will increase its accuracy but raise many privacy issues.

Why not consider creating an alternative age verification system - it may be more likely to be effective.

Oh, and for the record, if you are under 18 in the UK, or 21 in the USA, you should not have read any of this in case you should be encouraged to drink excessively simply through discovering that alcohol brands exist.

Please drink and market responsibly!

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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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Social Connections are still about people not stats

Small world story; as I walked towards my local coffee and sandwich shop, St. Davids in Forest Hill, I got an email to say my Foursquare mayorship had been lost to another user.

image

I didn’t know this lady, but I have to admit I felt slightly affronted than I should lose this title, despite it meaning absolutely nothing, to someone else. This is my ‘hood!

My step quickened and I duly checked in as I crossed the threshold, to discover I’m still two days away from regaining the title.

I brought up her details as I scanned the room. Not only had she taken my title, but she was from Pamplona – either a tourist or temporary resident. Oh, the shame of it! The indignity.

As I waited for my coffee, I replied on twitter, jokingly, that I would soon take my title back.

I heard get phone ping next to me, then decided it would probably be better if I introduced myself now rather than have her discover later I’d been tweeting from 1 metre away.

It turns out she’s here for a short stay to improve her English, and really enjoying London. As we talk, comparing the use of social media in the UK and Spain, she mentions she happens to hang out with a very “social” crowd. I ask, as an aside, if she happens to know another person I had met via twitter and Facebook from her region, not really expecting anything. Surprisingly, it turns out they know reach other extremely well …

… and we had made a strong personal connection despite this being a city of 10 million people.

I’ve been seeing some discussion lately about whether Pinterest was “better” than Twitter, or whether Google+ will replace Facebook. This is not the point. It’s not about likes, links, RTs, etc. it is about motivating interaction with a community.

This is not about foursquare, its not about twitter or any other communication tool. It is about individuals having the means to discover common links and connections, leading to real life interactions.

It is about how you, as an individual, business or brand, decide to use them. If you don’t bother engaging with people on them, it doesn’t matter what you use, you will lose.

If you still happen to believe these offer your business no value, you may be missing out on very real benefits, but don’t just chase the “next best thing”.

(posted from my mobile, so will have to add more links later).

UPDATE (18:06 added a few links for reference)

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Case Study – Social Media Works for Tea

One of the problems with the “should I use social media” discussion is that people who do not, and never will, use these tools natively are the ones making the decisions.

Digital Natives‘ are people who were born in a world where the landscape was always “digital”. If you extend this thinking you then have “social media natives”. I like to say these people are the ones who see no need for a phone book, printed map, or rolodex. I’m almost one of these. I say almost because I still find some things easier to do offline than online, but that is changing quickly.

I start with this because in my daily life, when I want to buy something or learn about something, my first stop, no matter what, is Google. I guess I can see that changing to Bing or Twitter or Facebook at some point, but the fact is that the “web” is my primary destination.

And so, my story begins.

This Christmas, my sister invited my family to stay at a rented house in the Cotswolds for a few days. Great idea! Countryside, hiking, long meals, lots of wine, … a perfect holiday. To make the holiday with family all in one house go smoothly, she gave us all small gifts to help us enjoy our stay. One of these was a not-to-be-mentioned specialty tea company’s assortment of teas. Each person received a different flavor based on their personality. A great gift, and while I wasn’t at that moment a big tea fan, the quality of these teas released a passion in me. I fell in love with them, primarily due to their freshness and quality. I was hooked, and when I got back to Spain I quickly raced to Google to help me fuel my addiction. It turns out that I was in luck as they were available to ship to Spain at a reasonable price.

One week later I was sitting at home with boxes of new teas and was ECSTATIC about beginning my reintroduction to whole-leaf teas – a reintroduction that made me realize how similar high quality teas and wines can be … but that is for another article. The point is, I immediately starting tweeting my satisfaction and including the account of the relevant company in my tweets. I sent a letter to them by email saying “thank you for your great teas”. I even went to their web2.0 website and left comments lauding the greatness of my new favorite teas!

The result: nothing. Not a single “thanks”, “good to hear”, “Happy you’re happy” or other comment. Just silence. Cue the crickets.

I was crestfallen, even heart broken. The packaging was cute, the brand adorable. Expensive, sure, but the quality was amazing. Yet they seem to be fakers in the social world, content to put up twitter and facebook logos on their sites but not ‘walking the walk’.

I considered buying from them again. The quality was great but I just couldn’t bring myself to do it. I simply didn’t want to support a company who didn’t appreciate me as a customer. So I returned to Google.

This time I found another company with a similar selection but a little less shiny! Less marketing and more tea. A site that was a bit clunkier, and packaging that appeared a bit dull, but they had what I wanted, so I dove in and bought a few sample packs. After selecting various kinds to see what they were like, I hit send.

And then … turn up the happy music. After only a few hours I received an email … from the owner no less. An email that said:

“Thank you for your order, it appears you have a great selection of samples. I’m going to throw in a few of my own favorites, let me know what you think!”

Yeah! I was acknowledged.

Today I received my new teas. I haven’t tasted them yet, but I have 10 new teas to try and a person who is listening to what I think. I’m pretty sure I’ll find a few that I like and I am 99% sure that I will be ordering again. They are also going to be talked about on my twitter stream, facebook page and probably over at LiquidAgnostic.com. At the very least, they are going to sell a pack of tea every month or so to me, and probably to a few of my friends & followers. The cost: 1 email.

If that’s not a killer ROI, I don’t know what is.

I’m off to boil some water.

Photo credit: Ryan Opaz
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