San Rafael, Calif. --- Wines & Vines In early December 2006 surveyed the wineries in our database of more than 4,000 across the United States plus others in Canada to get a self-assessment of how the wineries are doing in direct sales. We asked what areas they still don't feel confident in, and how their direct sales successes are divided among the various sales channels. We sent e-mails to several thousand winery e-mail addresses, and asked the recipients to take our survey on zoomerang.com. More than 350 wineries responded, giving us a sizeable sample.

Who Responded

We asked the recipients of the emails to answer them if they were in charge of direct sales, or if they were not, to forward them to the person in their winery who is in charge of direct sales. It turned out that the boss usually thought she or he was in charge of direct sales. Sixty-five percent of respondents said they were the president/owner/general Manager. The next most popular job function responding to us was sales/ marketing, with 37 %. Tasting room managers were next.

Doing Well, Thanks

A major portion of the survey asked respondents about their attitudes regarding direct sales. Did they feel confident with the direction their direct sales efforts were taking? To what extent did they think they were taking the steps regarded by many experts as the essential ones? And so on.

On six out of eight questions, the respondents' answers showed more confidence than doubt in how they were proceeding. On two of the questions, however, respondents said they needed help.

Unsure How to Improve?
The survey asked how strongly respondents agreed or disagreed with this statement: "I should improve my company's direct sales, but don't know what changes to make." Not a problem for 52% of respondents, who disagreed or disagreed strongly with that statement. Still there was a significant minority of 34% who agreed or agreed strongly that they're frustrated and need direction. (Note that we probably asked that question backwards, so disagreeing was positive reaction in this case.)

Know Your Top Consumers?
The survey asked how strongly respondents agreed or disagreed with this statement: "My winery has identified and has a strong relationship with its top 50 direct-sales consumers." Fifty-seven percent of wineries said they agreed with that statement. I called several small wineries to follow up on this survey, and found that some of them know all of their top 50 retail customers by name and could probably pick them out of the crowd at a Warriors game. Those are the people who come to every wine club event or who visit once or twice a year and buy multiple cases.

Confident in Marketing?
The survey asked how strongly respondents agreed or disagreed with this statement: "I know how and where to spend my marketing dollars to increase direct sales." This was a gray area, but generally positive. Slightly more people agreed or agreed strongly (42%) than disagreed or disagreed strongly (39%). And an unusually large percentage had no opinion, which is probably not a good sign. My anecdotal phone-call evidence suggested that many wineries have long sent a print newsletter and have tried e-mail newsletters, but don't feel confident in this medium.

Taking Names?
The survey asked how strongly respondents agreed or disagreed with this statement: "My winery has focused well on collecting postal and e-mail addresses from direct sales customers." Here's an area where wineries are confident they are doing the right thing. Only 20% disagreed or disagreed strongly with the statement, while a respectable 60% agreed or agreed strongly. I guess they've been listeing to the same advice I've heard at numerous industry conferences in the past few years. Names, addresses and e-mail addresses are the key ingredients for your outgoing direct marketing.

Reaching Out Regularly?
The survey asked how strongly respondents agreed or disagreed with this statement: "My winery communicates at least quarterly with our direct sales contact list." Thirty-six percent agreed strongly and 33% agreed that they are communicating regularly with their customers. One small winery said the general manager herself calls each wine club member once or twice a year. Others send print newsletters, invitations to special events, and sometimes e-mails.

Giving Staff Incentives?
The survey asked how strongly respondents agreed or disagreed with this statement: "It is important that my direct sales staff get direct financial incentives for sales and gathering contact information." Almost half the wineries agreed or agreed strongly that staff members need to be incentivized for direct sales. Next year we can ask how much they are compensated.

Need Help, Please

Even though wineries seemed confident in many of the categories of direct sales, they still didn't think they had all the answers.

OK With Status Quo?
The survey asked how strongly respondents agreed or disagreed with this statement: "My direct sales programs are doing fine and I seek only slow growth." The broadest question we asked was basically, "Are you happy with your direct sales?" The answer was no, we're not, and we want them to grow a lot bigger. A total of 68% of respondents answered in the negative, and very few had no opinion on the topic. I guess it was a softball question, because what business doesn't want to increase sales? What good business is content to rest on its laurels? But clearly there's a strong desire among wineries to do a better job of direct selling.

Brand Marketing Tied In?
The survey asked how strongly respondents agreed or disagreed with this statement: "My direct sales efforts are closely tied to my brand/distributor efforts." A clear majority of respondents said, NO, "I have not tied the two types of sales efforts together." In fact, it might seem counterproductive to some marketers at first, but the two should go together and help promote each other. Fifty-seven of respondents disagreed or disagreed strongly that they've tied direct sales efforts closely to brand sales through their distributors. Only 27% said they have made the connection.

Most Effective Channels

The Wines & Vines survey asked wineries to reveal what proportions of their direct sales revenue are derived from four direct sales channels. Our feeling going in was that some of the channels are probably not being utilized as fully as they could be, so we wanted to confirm or debunk that assumption. Our assumptions were largely borne out. We know from lots of previous feedback that tasting rooms are essential to many wineries, especially small ones, and we got a resounding confirmation of that.

The survey asked, "How much of your direct sales come through each of the four direct channels?"

Tasting Room
Forty-eight percent of respondents said the tasting room accounts for 51% or more of their direct sales. Only 23% of those surveyed said the tasting room was responsible for 10% or less of their direct sales. Clearly tasting rooms remain extremely important for direct wine sales.

Wine Clubs
Only 7% of the wineries said they received half or more of their direct sales revenue through their wine clubs. But a reasonably good portion, 37%, of wineries got between 11% and 50% of their direct sales through the club channel. So it seems to be a good solid second route after tasting rooms.

Web Sales
Direct sales through their websites still seem to be a low priority for many, many wineries when you look at these figures. Only 2% of respondents said they do more than 75% of their direct sales over the Internet. Another 1% does between 51-75% of their direct sales this way.

Mailing List
It's much the same story for mailing list sales. There are notable exceptions among producers of small, highly sought-after wines, but very few wineries in the survey are making their payrolls based on mailing list sales.

Personal Connection

It all comes down to this: Getting up close and personal with your consumers is extremely important. Savvy sales and marketing directors, third-party sales agencies and sharp winery executives all make the same observation. It's the personal connection with a consumer that turns them into a regular customer. Whether it's at a winemaker dinner, or even better in the winery tasting room, or even better yet being involved in an activity at the winery or having a personal tour with the winemaker -- the closer the exposure to the craft of winemaking and to the people responsible for it, the better the connection is. This is how wineries win consumers for the long term.