The Ohio Wine Association provides some useful articles that can benefit your winery no matter where you are located. You can find the archives here, and the topics range from choosing charities to support to managing volunteers to media publicity.
Recently I read an article admonishing wineries not to “get greedy” and raise prices now that we’re recovering from the Great Recession. While the article had some sound business advice, I take issue with the premise that price increases stem from avarice.
Sometimes raising prices makes good business sense. You need a certain level of profits to stay viable, including enough cushion to weather those unexpected challenges that are part of running a winery. Most of our costs went up during the recession, and most of us held or lowered our prices because we knew our customers had less discretionary cash. You shouldn’t keep your prices flat if doing so will force you to downsize or put you out of business.
Here are some factors to consider when deciding on pricing:
1) How competitive is the market for a given vintage/varietal? The more readily available, the less room you have to increase prices. If you do have an unusual wine with a loyal following, charge accordingly. Be sure your tasting room staff tells patrons when a particular wine is very popular and selling fast – they’re more likely to buy a case while they can, even if it’s a little more expensive.
2) Do consider what your competition is charging and how your wine compares to theirs. Don’t use an inflexible formula to determine your price. Some of your wines may have a small profit margin, while others a substantially larger margin. Charge what the market will bear.
3) Have a range of price options. Loss leaders factor into most business plans, and some people will buy your most expensive bottle just to impress their friends.
4) Don’t start a price war if you know your competition can produce more cheaply than you can. That may seem obvious, but sometimes it’s tempting to undercut the competition in hopes of a larger market share. Others can cut prices, too, and unless you know you can keep every customer you lure away from them, you could be sabotaging future revenue.
5) When introducing a new wine, err on the high side of pricing. If it moves, you are more profitable. If it doesn’t, it’s easy to do a promotion publicizing the lower price.
6) Experiment. Does that expensive, unusual bottle sell more even though you sold the same varietal for $5 less last year in the econo-bottle? Use that knowledge. And remember that if you didn’t have any failed experiments in the past two years, you’re stagnating.
7) If your costs increase, you should increase your prices in frequent, small increments to keep your profit margin consistent (unless there is a compelling reason not to – like a recession or a glut of wines on the market). Don’t keep your prices flat for five years and then increase the 20% all at once; you’ll give your customers sticker shock. Increase by 5% or less once or twice a year until your margin is viable again. Watch sales – if you see them drop off, ease back on the increases.
We should keep in mind that consumers’ habits have been affected by the Great Recession. Few of us spend as freely as we used to. If you can afford to maintain your pricing from five or ten years ago, that is certainly a legitimate choice. But we all work very hard for the money we earn in a risky industry, and we shouldn’t be bullied by accusations of greed when making decisions on prices.
Glasses imprinted with a winery’s logo are the ubiquitous wine tour keepsake. However, they are an investment intended to strengthen your brand, and you need to be sure you are getting your money’s worth. If your tasting room guest takes home her souvenir wine glass and sticks it in a cupboard, never to be used again, you are not getting any return on your investment. Here are some things to keep in mind as you select your souvenir stemware: glass size, imprint design, and durability of the imprint.
Size: I have two souvenir wine glasses from the Kent Art & Wine Festival, imprinted with a charming little squirrel toasting a wineglass and holding a palette. I love squirrels, wine, and art, but I never use the glass. It’s way too small – five ounces if I fill it to the top. I don’t drink wine five ounces at a time, and your customers probably don’t, either.
Imprint Design: The design on the bowl has to be something appealing, something that will make your customer want to reach into their cupboard and grab that glass. Your logo alone can be a lovely imprint, but don’t be afraid to weave in a grapevine border or a wine slogan like Wine Lover or Drinks Well With Others. Remember, your client probably has a shelf full of wine glasses they purchased, received as gifts, or collected from other winery tours. Do something to make your glass their favorite.
Imprint Durability: I have two beautiful large souvenir wine glasses with tinted stems and scraps of undecipherable imprints clinging to the bowl. They weren’t dishwasher safe, and they weren’t special enough for me to spend the time to hand wash them (no, I’m not that busy, but I don’t hand-wash anything unless it’s the only way to prevents ruining a gift from my mother). I still use those glasses weekly; I like the tinted stems and the abstract imprint remnants of the logos are kind of appealing. I do have to think hard to remember where I got them, though. That’s no way to reinforce your brand.
I know stemware isn’t cheap, and following these guidelines may give you sticker shock once you find a glass that meets all these criteria. If you’re not in a position to give a higher end souvenir glass with your wine tour, consider some alternative imprinted souvenirs that will keep your logo in the customer’s consciousness longer. Another option is to have tiers of wine tours, for example, with three tastings you get a souvenir pen, six tastings a refrigerator magnet, and if someone buys a case of wine or joins your wine club, then they get the higher end souvenir glass.
Be sure to make your souvenir glasses available for retail purchase, as well – after all, they’ll be too appealing to pass up.
Quick Tip #1: Partner with a local taxi or limo service – in exchange for a discount for your patrons, you can have a tasteful display of their business cards at your bar for those guests who enjoyed more of your wine than they planned.
Quick Tip #2: Give your wine club members some special privilege not available to the general public – a special vintage not available in stores, free tastings for a group, or access to invitation-only events. Make them feel elite, and they’re more likely to maintain their wine club membership.
Quick Tip #3: Visit local Bed & Breakfasts with a few complimentary bottles of wine (one for the proprietor and the rest for guests) along with a few flyers of upcoming events. Be sure to have a unique promotion code on the flyer for some inexpensive premium; the code will let you know how much business you get from that Bed & Breakfast. Visit the productive B&Bs quarterly to keep the relationship strong.
Quick Tip #4: Pick a typically slow time for your tasting room (e.g. Tuesday evening), and offer a premium for anyone with a medical ID. A food discount, a free corkscrew or a free tasting can lure nurses, doctors and EMTs to your tasting room.
Quick Tip #5 – BONUS TIPS: Six Free or Low-Cost Online Activities to Increase Tasting Room Traffic from AmericanWineryGuide.com. This guide is useful even for seasoned web marketers, with detailed advice on leveraging your web presence.
There is plenty of frenetic advice out there about social media marketing and how you should be doing more of it. The new paradigm for business is to provide fun, engaging content through every possible channel and then, on rare occasions (one out of every ten posts/tweets/pins/etc.), invite people to engage in commerce with you.
No one wants to be left behind as the market evolves, but it’s easy to get so involved in creating content and polishing our web presence that we forget that our objective is to sell stuff. Social media marketing can be a black hole that sucks your finite time and energy away from projects (including traditional marketing) that may be more constructive.
So how do you know how much is enough? How do you decide how much of your limited marketing dollars to spend on radio ads versus Facebook ads?
Here’s how: use promotion codes that give your patrons some benefit. Options include percent off, free shipping or bonus merchandise like a free item imprinted with your winery logo. Be sure you don’t violate your local liquor laws, and have an expiration date and no-combining-discounts rule.
By giving each marketing channel a unique code (even if they give the same benefit) you can gauge the effectiveness of different marketing channels.
You can even compare different email marketing companies with this device. For example, we always used Outlook to send email blasts for free, but I thought we might get a better response rate if we used a paid service. Using the same promotion but different codes, we sent half of our mailing list through Outlook and the other half through Constant Contact. We received the one more order through Outlook and the sales volume for each was almost even. You may have different results with your emailing list because our target market demographics are different than yours, but don’t assume that more expensive marketing = more effective marketing. Test it.
Once you see which marketing strategy achieves the most sales, invest your time and money accordingly.
Understand that you won’t capture every visit/purchase that was influenced by your marketing; people may visit your winery after the fourth time they see your Facebook ad and completely forget to mention the promotion code when they buy a bottle. But promotion codes will give you an idea of what your most (and least) effective marketing tools are.
My brother-in-law owns a limo company with a fleet that includes sedans, stretch limos and buses. Much of his business comes from weddings, airport transportation and special events like the Rock And Roll Hall Of Fame induction ceremonies. (My husband has chauffeured Mick Fleetwood, Eminem, Jeff Beck and James Hetfield. The stories he has!) My niece handles marketing for Thomas Limousine, so she exhibits at dozens of bridal events every year.
If your winery could use more business from out-of-town visitors, special events and weddings, you would do well to build a relationship with your local limousine company. It probably has a solid clientele of the people you want to reach. A brainstorming session with the limo company’s marketing director over a bottle of your wine is sure to be productive.
Some limousine companies can provide alcohol with their service; see if they would consider serving your wine. A brochure exchange would benefit everyone – have the limo company’s brochures in your tasting room, and they could distribute your winery brochures in their office (which usually has heavy bride traffic) or in the vehicles.
Know your boundaries, though. Certain weddings and party buses can leave the most seasoned tasting room manager curled up in a corner, keening. Before you say, “Come one, come all,” do your research and define your limits. Check out the Wiens Family Cellars for a good example of a Limo Policy.
And if you decide to take on weddings, a designated wedding coordinator and caterer can be invaluable buffers that save your sanity. Some wineries draw the line at bachelorette parties and others won’t suffer the wedding ceremony. Talk to your fellow wineries and see if you can generate some symbiosis. (“I’m afraid we can’t accommodate your reception, but we’d love to host your bridal shower and Renee’s Winery down the street is a featured wedding venue on Wedding Wire. Wouldn’t a wine tour wedding theme be fabulous? If you include three local wineries from this list, we’ll all give you a 5% discount.”)
When you talk to that limo company’s marketing director, the best thing you can do is make your expectations clear and ask as many questions as you can think of. Do you expect the relationship to be exclusive? If so, for how long? Whose responsibility is it to ensure adequate marketing literature in each venue? Is it simply a goodwill exchange or is there some fee for services or discount exchange? Should you schedule regular contact to talk about special event opportunities?
And always remember – whatever business arrangements are made over that bottle of wine should be followed up with an email to confirm your understanding.
“Revel in Your Winery” Customized Winery Keepsakes
May 5, 2013 by Mark Ganchiff Leave a Comment
Shannon Waller (top) and Jean Waller of Team Dynamics in Doylestown, Ohio
Looking for a cost-effective way to keep customers in your tasting room and increase merchandise sales? Team Dynamics’ Revel in Your Winery produces a full range of customized items that can be imprinted with your winery’s logo. From holiday ornaments to mouse pads and notebooks, Revel in Your Winery items make a perfect memento for your customer to remember their winery experience. We can even produce unique wine and food pairing magnets that feature your winery’s wine. [Read more . . .]