Is Your Wine Trash or Treasure?

#winebiz: You’ve heard the saying that one man’s trash is another mans treasure. How is it possible that two people can view the same object completely different? Its the difference in how each man values the object in question and how the object makes them feel. What about your wine? Is it trash or treasure? It really depends on who is answering the question AND if they are a target consumer for your product. If they are your target – they better not answer trash. Value is a consistently misunderstood concept but it is critical to consider in any successful marketing strategy.

This is the time of year when the end of year news starts to wane  and winery neighbors come out of their cellars to see if they have a shadow then discuss microbial spoilage, stuck fermentations  and quite often these days – their strategy to market their wines and how to do it in the context of a changed economy. Take a look and listen at just such an exchange in the above movie.

How will you best express value in your marketing strategy this year? More tasting room focus? Social media? Wine clubs? Maybe conjure up animal spirits and go completely DtC through the Fifth Column?

Hopefully you’re recognizing consumer purchasing patterns have been going through wild gyrations in the past 5 years. That will continue but today, with the mass affluent consumer just starting to show some stubborn life as real estate prices bottom, its the perfect time to think about what will drive the middle class consumers purchasing this year and into next. Forget about Millennials or Boomers. It’s what we used to call the Aspiring Affluent that will be the next real growth segment though my bet it that is going to end up comprised mostly of Gen X –  the forgotten generation. Why will the Aspiring Affluent buy your wine and not your good old wine making neighbor’s wine in the next few years?

Of course the answer is: It depends on your business model, but that would be a cop out. There is an overall philosophy that you can apply no matter the model.

I consistently drive winery owners to identify their consumers through the use of CRM, and define a strategy to drive value. Now if you are selling out everything on allocation, you might say to yourself: “Self? I don’t sell on value. I am all about scarcity.” If that’s the way you’re thinking then you are lucky to be in business because all products are purchased on value. It’s your role as a marketer to define what value should mean to your consumer and make sure your buyer knows it.

Many winery owners over the years have told me “I just focus on wine quality and whats in the bottle does the rest.” Baloney. It’s important to recognize the wine you sell is inert. It is an amalgamation of chemicals. Of course, what you are selling is the flavor profile of the chemicals but more importantly, you are selling the quality of the product which is defined by all the Ps in marketing. Out of that mix you have to evolve a story beyond the special soils, long warm days and cool nights. You are providing an affordable luxury product to your consumer and they are experiencing something when they drink it. They more you can influence consumer experience, the more you can charge for your wine.

I’ve put this up before as a value equation to consider and it’s particularly important for the DtC model to consider this: All people want value. Value doesn’t mean ‘cheap.’ Value can be found in all price categories from luxuries to commodities. For fine wine we came up with this equation for the value model several years ago:
Here’s the math: if Perceived Quality were “4” and Price were“2”, Value with just those variables would be “2” (4 divided by 2). If we lower price to “1” Value goes up to “4” (4 divided by 1). Makes sense? Anytime you lower price, you enhance value. But there are other variables here. You can enhance Perceived Quality through marketing and promotion and on top of that, you can enhance the consumer experience. That Experience variable should be where luxury wine retailers spend their time because that’s the soul of the DtC model.

How you do that is very long discussion but before signing off this week, I’d like to ask how are you tracking consumer experience? How do you measure it? How do you know what someone in a restaurant experiences when they drink your wine? How do you know if one of your top influencers or wine buyers had a bad experience?

Feel free to offer your thoughts on the above, and offer ideas how you or your wine making neighbor enhance experience to drive value.

SVB on Wine

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