The retail shelves have never been more competitive – which means a well-run wine club has never been more important.
With income streams drying up, the importance of a wine club to the viability of your wine business cannot be overstated. A wine club is a committed club.
Please don’t mistake a wine club for just a mailing list. With a wine club, members really like your brand and your wines, and are committed to purchasing every year.
You create your own ‘little’ community of true believers. What a position to be in! The best part? You can talk to your customers directly. There is no competition.
Wine clubs are the most profitable sales channel – reliable income every year and there are no bad debts or overdue accounts. They allow you to introduce a loyalty program and to sell more of your premium and ultra-premium wine.
Export markets can be volatile as we’ve seen with China. A 40-foot shipping container of wine is the equivalent of 300 club members committed to four dozen bottles of wine a year – but the profit margins are far greater than exports. And you avoid currency fluctuations and various taxes.
Having a strong wine club also allows you to move away from distributors. Wholesale margins are too low, and advertising and promotion costs can be very high. They also require large amounts of tasting stock.
Members join your wine club because of a great experience at your winery, cellar door, function or event. They are interested in your story. They are seeking a relationship with you and perhaps an opportunity to meet your winemaker. It’s also convenient – people are time-poor and don’t always have time to visit the liquor store let alone find a park.
Wine club members enjoy access to wines that are not readily available. They appreciate access to the best seats or the VIP marquee at concerts, and also access to wine dinners and golf days. All great opportunities to get to know them better.
There are three types of wine club members: Rusted On Members (members prepared to stick with you through thick and thin, even if the relationship hasn’t always been smooth; Typical Members (they will stick with you for a few years provided you give them good service); and Once Only Members (they will take advantage of the joining offer and then cancel their membership).
Clearly the goal is to boost your number of Rusted On members. And you could have them for life.
Wine club members may be required to spend $1,000 a year – $250 per quarter (one bottle per week) or $500 twice a year. Consider only offering your most expensive wines so that you can recoup the cost of providing member benefits. The greater the financial commitment, the greater the benefits and loyalty.
Commitment could coincide with a seasonal newsletter. Minimum commitment may be four cases a year (one bottle a week) but the member should be allowed to commit to more than one case per quarter and have a different selection each time.
This is important: accounting software needs to record the monthly commitments. A member committing to less than $100 per shipment may be an impulse buyer and not remain a member for long. It goes without saying that both parties need to meet their commitments.
Give wine club members an incentive to join. The first order could be heavily discounted – so good that even you want to join. Offer them free tickets to an upcoming event, free freight, a tour of the vineyard or a welcome gift. We all love a freebie and to be made to feel special.
If you don’t know where your next sale is coming from, it’s time to take your wine club seriously. It’s a potential gold mine. And it could just transform your winery.
Nick Cugura is director of Ezy Systems which has been providing wineries with a one-stop solution since 1993. Email nick@ezysys.com.au or visit ezysys.com.au.
• This article first appeared in WBM – Australia’s Wine Business Magazine. To subscribe click here.
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