Ecommerce Sales That Are Six Times Greater than Normal? You Can Do It Too. Here's How
Dry Creek Vineyard in Healdsburg, Sonoma County
“The offer resulted in sales that were six times the size of what we typically see in an e-commerce sale.”
That’s testimony from Dry Creek Vineyard’s Direct to Consumer Manager Michael Longerbeam, one of Enolytics’ earliest adopters and advocates. We helped to identify a potential opportunity with Dry Creek’s lapsed customers, refine the segment, then design the offer that yielded those exponentially better-than-normal results. (You can read the full story, courtesy of one of our technology partners, here.)
With so much information hitting the wires this week about the future of ecommerce for the wine industry, we thought it might be helpful to offer concrete, hands-on, how-to suggestions from an industry leader who’s finding success when so many others continue to struggle, even despite promising marketplace conditions and the tools at their disposal to maximize opportunities.
This is literally and physically painful for us to see. It just does not have to be this way.
You can do it. Let us help you.
Here are five specific ways we’ve worked with Dry Creek to make it happen for them.
Cleansing Customer Data
We’ve all been there. The busy tasting room, that is, which is a perfect environment for a fun, interactive wine experience. On the flip side, that environment is also perfectly suited for rushed, imperfect and incorrect entry of customer information. Maybe a dot is missing before the “dot com” of an email address. Maybe a digit is missing in a phone number. Maybe a zip code was entered incorrectly. It’s human error, and completely understandable, particularly when both staff and guest are caught up in the pleasure of the experience.
Those errors, to some extent, are inevitable yet they handicap the winery’s ability to cultivate a relationship with the guest in the future. Which is why cleansing customer data is such a fundamental and valuable step in the wine + data process.
“Clean data might not be the most exciting part of working in the wine industry, but it is crucial,” Longerbeam said. “After the tasting room visit, customers may want to continue to hear from the winery and receive news and updates. But that’s only possible with clean data.”
Our algorithms identify incorrect email address and phone number formulations – the missed dots and digits, that is. Then they validate every address, suggesting USPS-verified addresses. Finally, our integration with WineDirect enables the user to click directly through to the WineDirect database in order to correct the error. (Note: Our system is built natively to WineDirect and it’s designed to apply to other order fulfillment services as well.)
Segmentation
Your customer who’s a 30-something woman in Brooklyn who prefers red blends is not the same customer who’s a 60-something retired man in Dallas who’s just discovered a taste for Riesling. They have different tastes, and they’re at different points in their life cycles as wine lovers and consumers. As a winery, you want to speak to their individuality, and to let them know you see their unique profiles.
That’s the value of segmentation.
“It’s all about relevance,” Longerbeam said. “We all get bombarded by excessive marketing messages. If your message is targeted to the customer’s interests, you have a much better chance of capturing the customer’s attention.”
Here are just a few of the variables we can use to segment your very own customers, in order to create different “personas” or profiles:
Geography: where they live, according to state, metropolitan area, city and zip code
Geography: affluence of neighborhood
Gender
Age and Generation: GenX, Millennial, Boomer, etc
Purchasing history: how long they’ve been club members, and patterns of preference in terms of what they’ve bought over time and via what channels.
Identifying Customers at Risk
“You’ve probably heard the expression that it’s twice as expensive to acquire a new customer than to retain one,” Longerbeam said. “I’d suggest that it is two to three times more expensive. A winery that targets their retention efforts is in a much better position to have a successful wine club program.”
Let’s face it. Acquiring new customers is harder than it’s ever been, especially during COVID-era travel and occupancy restrictions. It’s critical to understand your current customers so that you can reach out to those who are in danger of dropping out of your club, and so that you can reactivate those relationships that have slipped away.
We designed our “churn” algorithms for this reason specifically: To identify and categorize your customers who are at risk of leaving your club, from very low to very high risk. The high and very high-risk customers? You’d want to reach out to them urgently. The low-risk customers? You might want to reach out and thank them for their loyalty. When you extend the stay of customers in your wine program, you increase their Lifetime Value.
Price Elasticity or, Should I Raise the Price of My Wine?
You know your business better than anyone, and you no doubt have a gut sense of when it might be time to raise (or lower) the price of your wines.
But what does the data say? It can, for example, help to contextualize price changes for the longer term.
“Price increases are an easy way to increase revenue,” Longerbeam said. “But are you shooting yourself in the foot? What will happen to your volume if you increase the price on your wines? Even better, what will happen per customer demographic? Price elasticity helps wineries be smarter about price increases.”
Our goal with the price elasticity modeling is not to say whether or not you should raise your prices. But we can tell you what would happen theoretically if you nudged your prices higher or lower. We use the purchasing history of your very own customers, over time, in order to show you what would change relative to the price adjustment, in terms of volume, revenue and margin.
We’re totally in favor of listening to your gut. We’d just like to use the data to back it up.
Mailchimp Integration
The sales history of your DTC program is “held” within the WineDirect database. That helps with segmenting your customers, as we discussed above. An additional benefit is creating targeted email campaigns to those customers and, more importantly, measuring the exact dollar value of the results.
“Not all email campaigns are created equally,” Longerbeam said. “Some have a much more significant impact than others. I’d estimate that for most wineries, a small number of successful campaigns are generating the bulk of revenue. Can you identify those campaigns? What is it about them that makes them so successful?”
It’s possible to find answers to exactly those questions, because we’ve linked the WineDirect customer and order data with Mailchimp. This way, you can know clearly and visually what you’ve done right, because you’ll see which email campaigns were the most successful: which emails were opened the most, which campaigns generated the most revenue, and which varietals and demographics saw the most traction.
The bottom line is that the winery understands who, where and what to prioritize.
Prioritizing who and what are most valuable for a winery is the biggest advantage of using data intelligently. It helps you to understand what you’re doing right, and shifts focus to doing more of exactly those things.