Though winery staffers focus a great deal on signing up wine club members, they often pay little attention to maintaining existing customers’ interest in the brand. The lifetime value of a committed club member can translate into steady and reliable cash flow. This is where customer relationship management (CRM) comes into play.

Today’s uncertain economy makes now an ideal time to take action and seek potential revenue streams that other industries are actively tapping. Restaurants, hospitality providers and retail boutiques have embraced direct-to-consumer (DtC) CRM, but the wine industry is sorely lagging. Wine industry-specific building blocks can help wineries design and implement CRM plans, be they through software, hiring specialists or taking courses to sharpen DtC CRM skills.

Everyone else is doing it
Increasing the CRM DtC sales element starts with creating a positive and memorable experience when guests first set foot in the winery. Guests must have a rich sense of a winery’s brand to develop a deep commitment, so the bar for a pleasant and focused customer experience must be set high.

When it comes to CRM, Dawn Wofford, owner and managing partner of Benchmark Consulting in Napa, Calif., advised, “Wineries need to open their minds up to what other like-minded industries with affiliated demographics have done and been successful at. When you arrive at a Ritz Carlton or Four Seasons Hotel, they know your name right when you pull up, whether you want a newspaper, what kind of coffee you like.” Wofford cited the opportunity to capture credit card and client data the moment a client walks into a business.

“There are ways to make people special and welcome,” Wofford said. She has noticed that wine is getting better and prices are getting lower, yet customer service is getting weaker because wineries are losing sight of the details. “Those bits of information make all the difference in the world.”

Craig Root of craigroot.com, based in St. Helena, Calif., is currently consulting for seven different winery tasting room startups in five states: North Carolina, Texas, New York, California and Oregon.

Root remarked that good restaurants know a customer’s favorite dish and even where his favorite table is. He related how his local pizza place can tell by looking at his phone number on caller ID that he likes blue cheese dressing served on the side when he orders a salad.

“A lot of tasting rooms have the same ability via their POS software, but they don’t bother to collect and analyze the data. You should know that Ms. Jones really likes your Syrah. You need to make sure you’re capturing good information from the staff and from your POS.” In the world of CRM, the main thing is keeping accurate information about who your best buyers are. According to Root, wine club members or customers who spend more than $1,000 per year in the tasting room should be the primary target.

Software solutions
For those who operate tasting rooms housed in perpetually cash-strapped wineries, the inability to invest in and implement a state-of-the-art CRM solution can be a constant source of frustration. But it’s one to which winery owners must never surrender. Not only do winery owners need to find the time to focus on this potential revenue source, they need to find a tenable solution to accomplish it. At the very least, a tasting room staff member can maintain a spreadsheet or Access database of top winery clients with names, addresses, email addresses, birthdays and favorite wines. Extra points for dates of visit, when and how the client was last contacted, special orders and recent purchase details.

Rick Patton is the hospitality manager at 10,000-case Alpha Omega Winery in Rutherford, Calif., which focuses almost entirely on DtC sales. (See “Selling at the Source,” Wines & Vines, January 2011.) Patton currently uses a client book to record his CRM efforts. He favors an actual book over software because, he says, there’s no way to parse things together by spreadsheet. Patton has been selling wine for eight years now and has clients in his book that have followed him through stints at four different wineries. Patton is considering using Salesforce.com for CRM because, as his winery’s client base gets bigger, it’s getting harder to keep track of detailed information in a book. With functioning low-tech methods such as this, there’s no excuse for a winery not to address CRM. Be sure to occasionally scan or photocopy your client book pages for data backup.

Paul Mabray is the chief strategy officer for VinTank, Napa, Calif., which consults wine businesses looking to market their wines online and wine tech companies looking to market their products to wineries.

Mabray has noticed a trend in the wine industry of using CRM data to build lists and market to them, a tactic he describes as “reactive.” “What’s missing in the industry is actionable CRM,” Mabray said. “Whatever platform you’re interacting with the consumer in, you need to be able to see patterns in that customer’s purchasing and tasting behavior and myriad other details that make the gestalt of what the actual customer is.” At that specific point of contact where the activity is happening, a winery representative must be able to act with the data in front of them.

When considering CRM options, Mabray cautions that purchasing CRM software will not fix the weak link in a winery’s DtC chain. “CRM is not a panacea. The software can’t fix customer relationships, only people can.” You have to have a unified effort toward customer service. CRM solutions must integrate well with point-of-sale (POS) and legacy systems such as QuickBooks or Excel.

As a wine industry consultant, Mabray is a fan of software applications that are tailored to the unique needs of the wine industry. “Solutions have to organize three types of data into a meaningful record by marrying three systems: POS, wine club and ecommerce, ideally in a cloud-based computing service,” he said. With cloud-based computing, everything is done online and hosted on a secure, remote server, eliminating the need for disks, maintenance or software updates. Customers can securely update their own records. An informative video about cloud computing can be found at greatvines.com.

With an office in St. Helena, Calif., GreatVines is a Salesforce.com partner. Using the force.com platform, GreatVines has built a specific packaged CRM and analytics solution for the spirits, beer and wine industries, but it is direct-to-trade (DtT) only. GreatVines is touted to integrate successfully with legacy systems such as AMS, QuickBooks and JD Edwards. The standard price is $150 per month per user with a 10-user minimum. Implementation costs range between $5,000 and $15,000, which includes customization, data import and training.

Jim Thompson, executive vice president of technology for GreatVines, said, “The whole reason people use these systems is to better understand their customers. It’s having the ability to log every click and touch point and quickly profile a customer’s likes and dislikes. You need to understand and react quickly to your data.” Thompson highlighted the need to be able to generate reports on demand rather than wait for month’s end. “Live, real-time data should be accessible online to all users. If sales goals drop, an email warning can be generated.” This assures best practices for sales activity tracking where tasks can be set and followed up.

Record points of contact

Brent Johnson, sales manager of Abbotsford, B.C.-based Vin65, said, “You really want to get the full 360º view of the customer. To be able to tie in all of your points of contact with one consumer in one platform is essential.” All points of contact include: an online form or response via the winery website, orders, club membership, up-to-date order history, credit card information and point-of-sale details from the tasting room.

Another important feature of CRM software is native email analytics of clickback information, how often a user opens email, what links they clicked on and what emails they received. Johnson advised, “Marketing managers need to make sure the information they’re communicating is relevant to the customer. For instance, if you have a wine event on the West Coast and the customer lives on the East Coast, it’s irrelevant to them. Managers must be engaged with each communication.” From his personal experience, Johnson cites a three-email window of opportunity. “After the third email, they’ll start ignoring and deleting you. They don’t take the effort to read it if it doesn’t regularly apply to them.” The CRM effort must dive down and segment groups with personalized communications.

The monthly subscription fee for Vin65’s software package is $250 per month. Initial setup can cost up to $6,000 for a small- to medium-sized winery and $8,000-$20,000 for a larger winery.

For $100 more per month, Vin65 can develop a smartphone version of the winery’s site. This enables the winery to use an iPad or similar tablet device in the tasting room to track a customer’s wine preferences and ratings with a spectrum of one to five stars. Favorites are denoted by clicking on a heart icon. All data is saved to a customer’s profile on the winery’s database, thus setting up a detailed case history based on prior visits.

The 500-case Pithy Little Wine Co., San Luis Obispo, Calif., is currently using Vin65’s tablet-based rating system in its tasting room. Jeff Munsey, vice president and co-founder, reported that it’s going well. “From our perspective it has been very successful. Munsey mentioned the need for customers to get past their own insecurities with using touch-based tablet devices. “Some people are apprehensive about using them. After years and years of being asked to write their information down on a form, this is something new and people are skittish.”

iPad in the tasting room
Pithy Little Wine Co. uses iPads in its tasting room for three main reasons: First, it’s a quick way to capture information for the email list. Second, as a platform for securely signing up wine club members, completely eliminating the need for insecure paper forms. Third, the iPad wine list interface helps guide passive self-directed customers. “It allows them to explore the winery at their own pace in an interactive way.” Munsey noticed that the deeper customers got into the exploration of the wines through the iPad, the more likely they were to make purchases. “It’s not an exact science, it comes down to the empowerment of the customer to pick and choose what’s interesting to them. They can drill down to what they want to focus on; it gives them more things to discuss and opens up greater dialogue because you can’t always fit everything on a wine tasting sheet.”

Munsey mentioned that the other benefit to a tablet-based CRM solution is the off-site ability to take orders and collect transactions. “It allows us to really serve the customer in an easy and secure way,” he said.

Pithy Little Wine Co. maintains three levels of its wine club, covering a diverse range of affordability that’s divided into three categories: drink, share and collect. The $30 one-bottle club member receives a “drink” shipment, the $80 two-bottle member receives one “drink” and one “share” bottle, the $150 three-bottle club member receives the same wines as the two-bottle member plus one “collect” bottle. “Vin65 makes it seamless to speak to and manage each of these tiers,” Munsey said. Pithy Little Wine Co. also uses CRM to send out discounts and incentives as well as introducing new releases.

Hiring solutions
Winery positions that include CRM responsibilities fall under the sales and hospitality banner with roles such as administrative sales support, customer service, hospitality manager and DtC manager.

Hiring someone to address your CRM-related needs is not without potential pitfalls. Wofford of Benchmark Consulting noticed a high turnover rate in CRM-related roles, saying, “The components of compensation are not enough to retain people who fill these roles. It’s a bigger thing than just getting some tasting room people.”

Craig Root lamented the problem of employing a single staffer who wears one hat too many: “Sometimes tasting room managers are stretched thin, so they don’t have time to focus on these details, do strategic thinking, implement and plan.” This is a grave mistake, according to Root. After five years (when a winery has an established clientele and thriving wine club) consider where the tasting room ranks in terms of winery profit. “It’s usually No. 1,” he said. Following this logic, the tasting room manager is the president of your biggest distributer. Top management often forgets this. As distribution presidents, tasting room managers need to be given time to develop, implement and maintain an effective CRM program. Root refers to this as a classic point of difference in how a winery distinguishes itself in the world of CRM. The shy and the lazy fail to connect with customers on a regular and meaningful basis, as do the overworked.

Considering CRM candidates
Carol Comini, senior recruiter from Personnel Perspective, Santa Rosa, Calif., said that CRM candidates must have a full handle on customer service, how to not only gain new customers but to also maintain current customers. Beyond that, Comini said, “Candidates must have a passion for the brand and the particular winery they’re working for....Typically for someone that works in this capacity, it’s their lifestyle. So even after work, their exploration of wine continues. It’s part of them and who they are.” When recruiting, this degree of passion should be easily recognizable. If you’re reading this, chances are good that you see this same type of person in the mirror every morning.

The importance of wine industry passion for a CRM-related staffing role was also highlighted by Theresa Macias, branch manager of Adecco Employment Services, Concord, Calif. Macias’ clients consist of large corporate wineries whose staffing needs are primarily for temporary seasonal production staff and hospitality-related education and service positions. Clients who rely heavily on seasonal staff typically maintain a lean full-time, structured and tenured staff with minimal turnover.

Though Macias’ clients want experienced candidates, she noted that the wine industry is very cultured. “Candidates must be driven, compassionate and passionate about the industry in general. They have to be able to deliver a cultural experience. Passion counts most. Without passion, people are only half committed to the experience.”

Dawn Wofford of Benchmark Consulting specializes in the staffing needs of boutique wineries with production levels of 200,000 cases and below. She suggests seeking out CRM-related candidates who have a hospitality management background. This includes not only winery experience but restaurant or event coordination as well. A candidate who has built a wine club is of extra value. “People who have experience in building a buying wine club are special. They know how to keep the top 50 customers buying.”

Wofford adds that not only does a CRM hat wearer have to recognize who their top 50 customers are, they must know how to gather data and effectively use it. Wofford said that some of her clients have requested that candidates be familiar with CRM-related DtC programs such as Advanced Management Systems (AMS) and eWinery Solutions. “Candidates must be technology savvy enough to pull data and reports while at the same time be able to access and manipulate the winery website. So writing skills are important, too.” Not surprisingly, social media familiarity is crucial as well.

Education solutions
Though there are currently no course offerings specifically geared toward CRM, the courses listed below cover DtC sales and, in most cases, touch on CRM techniques. Not only are courses informative and helpful in upping your DtC game, they can be good opportunities to network and share experiences with other like-minded individuals in the wine industry. Check course listings for times, dates and further details.

UC Davis, Davis, Calif.: Public Relations for Small Wineries. Details: extension.ucdavis.edu/winemaking.

WISE Academy, Napa, Calif.: Data Analyst Professional. $400 for two eight-hour sessions. DtC Metrics Intensive, executive level, $750 for one eight-hour session. Details: wineindustrysaleseducation.com.

Sonoma State University, Rohnert Park, Calif.: Selling through the tasting room, $150 for a four-hour seminar. Details: sonoma.edu/sbe/wine-business-institute.

Brock Cool Climate Oenology & Viticulture Institute, St. Catharines, Ontario, Canada. CAD$175 for a one-night-per-week, nine-week course. Certification program in wine sales and service. Spring 2012. Details: brocku.ca/ccovi.