3 hard punches to give your wine brand a fighting chance

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Put down your wine glass for a minute and pick up your calculator, your P&L and your cash flow statement instead. Unless you start paying as much attention to the business of wine as you do what’s in the glass, you might find yourself drinking alone.

Years ago I heard it said the best way to make a small fortune in the wine business is to start with a large one. If it was true decades ago, it is even truer today.  The United States is both the single largest wine market in the world AND the most competitive. More than four times as many wine companies sell their wares in the US (8,800+) versus 20 years ago. To exacerbate the degree of difficulty, there are less than 1/3 as many distributors (700 or so compared to 2,000).

I recently attended the Texas Wine & Grape Growers Association convention in Dallas. In the trade expo, there were many booths showcasing expertise in grape growing and wine making but very few on how to sell and market your wine. At our booth, we met a lot of new, small winery owners just getting into the business. A line from an old Eagles song came to mind, “…with starry eyes and dreams no one could steal.” There was a definite, “If I build it they will come” attitude in the air. But, as someone who’s been on the sales side of wine for 30 years, I could have told them all no matter how great your wine is; you still face the Herculean task of getting people to buy it. Making great wine is not nearly enough in today’s environment.

When it comes to tools and strategies about marketing and selling wine, most of what’s available centers around the direct-to-consumer space (DTC) Very little is offered in a business-to-business (B2B) context. Yes, I know, we have this thing called the 3-tier system and we always will. But, it’s 2016. There’s only so much distributors can do for you. It’s not like it was 20 years ago.  We find ourselves in a new reality, which will only get worse as distributor consolidation accelerates.

A great separation is about to occur in the wine business and the winners will have learned how to “box above their weight class” by implementing the three powerful new strategies outlined below.

1)    Take responsibility for the quality of your distribution

One of the most popular metrics in our industry is “Accounts Sold.” The thinking goes that if your Accounts Sold numbers are growing, you’re growing distribution and you’ve got a healthy brand. But, this is a rather “hollow” metric. You need to go MUCH deeper into the data. It’s also important to know which restaurants and wine shops are buying your wine and how they are using it. But even that isn’t nearly enough.  You also have to know who should be buying your wine. Which accounts offer your brand the best exposure to your target market? Which accounts are capable of the most volume? You need to learn how to target these customers and you need to know how to market and sell to them.

But, wait: isn’t this what you pay the distributor to do? At one time, it might have been. But, we are in a hyper-competitive environment- much more so than any time in history. You simply cannot afford to leave something as important as the quality of distribution up to someone else. Distributors have too many other brands on which to focus and they expect you to do your part. A good rule of thumb for the modern age is: the best you can expect from a distributor is to match your efforts. The distributors can help you achieve your business objectives but only you, and you alone, are responsible for it. The good news is with the right data, the tools to use it and the right set of best practices, you’ll be well on your way – even if your sales team is very small.

2)    Invest in a CRM system specific to the wine business

Why does anyone “invest” in anything? They put their capital to work because they want to earn a return on their investment. Too many wineries look at only one side of this equation. I’ll make this is as simple as I can for you: before you hire one more salesperson, give your wine company a fighting chance by investing in the technology that has become absolutely essential in today’s competitive wine market: cloud-based CRM. In a nutshell, CRM (Customer Relationship Management) gives you the power to control your own destiny like no other sales & marketing tool.

You need a CRM system that is specifically designed for the B2B end of the wine business. It doesn’t replace your distributors’ efforts; it augments it. The best is GreatVines. Is it expensive? Yes. Is it worth it? Absolutely.  Saving a few bucks to try and do it your self is like stepping over a dollar to pick up a dime.  And don’t think you can retrofit your DTC CRM system for B2B. It’s a whole other tool meant for an entirely different purpose. You need both. The reason so many wineries have invested heavily in DTC tools is because there is very high return on investment. In other words, it’s worth it. Well, there’s an even higher ROI waiting for you on the B2B side!

3)    Start buying your own RAD (Retail Account Data)

You need to buy it and then use it. I’m talking about from a company like Trade Pulse. Uploading your own data into your new CRM system will allow you to fully exploit and leverage it in ways you never dreamed possible (see “Quality of Distribution” above). Yes, you can get “free” RAD data from your distributors but it’s highly fragmented.  Even if you do have the time and manpower to string it all together, using Excel to crunch these numbers will never yield the insights you need to rise above your competitors and have meaningful conversations with your distributors. Why rub two sticks together when you can use a blowtorch? Push a button, get an answer. Welcome to 2016.

If you think investing in these two areas is only for the “large” wine companies, I have two exciting bits of news for you. First, most of the large wine companies are using only one of them right now: RAD data. Second, the cost of cloud-based CRM is on a per-user basis, which means small wine companies can leverage the same technology at a proportionate price!

If you invest in CRM and RAD data now, you’ll be able to do many things the big wineries can’t. But, the window of advantage will close, soon. You also have to remember; you’re competing with ALL wine companies- not just the big ones. 8,800 of them!  So, as Andy said to Red at Shawshank prison, “You can either get busy living or get busy dying.”

 

Ben Salisbury is the founder and President of Salisbury Creative Group – a wine business consulting firm focused on sales effectiveness. Their client base includes Gerard Bertrand (France), Sacred Hill (New Zealand), and Fetzer (California).

 

3 Not-So-Obvious Benefits of CRM

Whenever I ask people if their sales team uses CRM, I typically get one of two responses: “Yes,” or “What’s CRM?” If you’re actively leveraging the power of CRM at your company now, you already know the many benefits. I like to say CRM helps you, “box above your weight class” because you get far more done in less time. But for those who have not yet jumped on the bandwagon, this post may prompt you to take a closer look.

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So, what is CRM?  “Customer Relationship Management” is both a technology tool and a sales strategy. At its most basic level, CRM allows you to capture, store, and organize highly detailed Customer and Account information and share it across the entire organization. Today’s CRM got its start in the 80’s with the advent of digital rolodex tools (also known as Contact Management Software or CMS) like Act!, Goldmine, and Time & Chaos. The big leap forward came in the 90’s when companies took many features of database marketing, automated them (SFA), and combined them with contact management systems. CRM continued to evolve throughout the latter half of the 90’s and into the early 2000’s.

In 2007, Salesforce.com created the next big change by introducing the world to cloud-based CRM. These systems are subscription based, continuously updated and highly customizable.  Fast forward to today, there is a full array of very powerful CRM systems – Salesforce.com holding the largest share of the market with over $4 billion in annual revenue.

There are many benefits of utilizing a cloud-based CRM system in your sales process. Some of them are quite obvious like improved business relationships, better retention of your best customers, and driving steady sales growth. But here are some “not-so-obvious” benefits you may not have thought about:

1)      If you want something done right, do it yourself

Take, for example, the wine industry where you must use “middle men” or distributors to execute your sales and marketing plans.  It can be very frustrating to rely on a third entity -especially if that entity is serving many masters. Taking a page out of the direct-to-consumer (DTC) playbook, sales organizations can now manage relationships directly with restaurants and fine wine shops in a B2B fashion via email and social media interactions. The work of distribution still gets done (and expertly, I might add), but the brand owners themselves assume responsibility for maintaining and keeping those key customers by fostering strong, personal relationships.  I know several wineries, both large and small, who leave nothing to chance because they have a system for managing all interactions, conversations, events, and commitments with their best customers. A CRM strategy helps brand owners take full responsibility for the quality of their distribution while improving the “sticky-ness” of their top customers.

2)      For once, Sales & Marketing are pulling on the same rope

Profitable, healthy brands get built because sales and marketing work together seamlessly. Sometimes Sales teams lose sight of the importance of brand equity and, in the aggressive pursuit of volume, the temptation to lower price wins out. Marketing pros are often accused by the Sales team of being too disconnected to the “real world.” When a Marketing team’s campaign fails, they blame Sales for poor execution. When a plan succeeds, both Sales and Marketing want the credit. More often than not, these “disconnects” are caused by poor communication and lack of collaboration. Enter a cloud-based tool whereby everything is visible to everyone in the organization 24/7 and mobile, too. CRM helps facilitate a unified social engagement with customers plus provides full collaboration of “corporate knowledge” (read: no silos). And thanks to the abundance of hard data, there’s only “one version of the truth.”

3)      The Need for Speed on Steroids

Speed has become such a differentiator in today’s competitive marketplace. The need to adapt, respond, and innovate has always been around. But companies with both the will and the ability to accelerate the pace of doing business (well beyond their competitors) have a huge advantage. Huge! When people tell me they don’t have time to use CRM systems, I’m just astounded. Why walk when you could run? Why drive when you could fly? And why fly when you could interact in real time on your mobile device? It’s like when people ask me to give them directions or send them a link or “get back to them.” I’m like, are you kidding me?! This is 2016, there is no “getting back” to anyone! I can get anything and everything I need with a couple of taps on my phone – including any piece of Customer or Account info in my CRM database. I spend zero time waiting, inquiring, or wondering. Get out a pencil and see what your sales team is costing your company. Then ask yourself, what kind of return on capital could I realize if I could double or triple the speed at which things get done?

We are in the midst of a glorious era in the world of business – especially for industries behind the curve in the adoption of cloud-based technology in their sales & marketing process. Real, meaningful, and significant advantages await those who make the leap now. Within 5 years, everyone will be using CRM and, looking back, will wonder how they ever got along without it. I urge you to get out of the stands and onto the field – today! I can’t promise someone will “get back to you.”