Last Updated on June 1, 2022 by Troika Gellido
As times change, it’s time to pick up a new playbook for selling and marketing wines.
For nearly a decade, the standard playbook for marketing wine has surrounded the three-tier system of producers, distributors, and retailers. This system worked well for a long time, but as the market changes, wineries can no longer rely solely on the three-tier system.
For his Legends Behind the Craft podcast, Drew Thomas Hendricks sat down with wine marketing expert Ben Salisbury of Salisbury Creative Group to discuss the modern ways to sell and market wine in the US.
The Way Times Are Changing
Many of us are familiar with the tried and true three-tier system comprising the winemakers, the wine distributors or wholesalers, and the retailers.
Lawmakers put this system into effect after the fall of prohibition. The hope was that these tiers would allow for stronger legislation and that the added cost would deter frivolous spending on alcohol.
Under the three-tier system, winemakers produced and bottled the wine. They then sent the wine to a wholesaler or distributor, who would then sell this wine to retailers.
These retailers sell this wine to consumers, either off shelves, like in a liquor store or grocery store, or by the glass or bottle in a restaurant or bar setting.
Markets change, and we have to adapt to that change. That’s not to say the three-tier system is completely useless. On the contrary, it has several benefits, and there’s a time and a place for it. However, in today’s wine industry, it can not be the only method for selling wine.
Why the ‘Old Playbook’ Won’t Cut It
The old way of doing things had wineries creating solid partnerships with their distributors. That partnership allowed wineries to educate and work with their distributors so the distributors could make sales possible.
However, recent changes have made relationships like this difficult to maintain. In the past decade, the number of new wineries has exploded while the number of distributors has shrunk considerably.
Because this ratio is so unbalanced, sales and marketing must go back to being the producer’s responsibility. The distributors are simply too overwhelmed.
Distribution representatives used to have a manageable portfolio, and retail buyers could taste 60-70 wines a day and have a good view of what the distributor could offer. “But that’s no longer the case,” Hendricks says. “You can’t just shove the burden off to the distributors and expect it to be sold.”
Because so many brands are now flooding the market, buyers don’t have the time to sit down and hear the sales rep wax poetic about the wine. Having a great product is no longer enough.
“Number one of the new playbook is don’t depend too much on your distributor,” says Salisbury. He doesn’t mean not to use them at all. “They’re an indispensable part of the three-tier system and probably never going away,” he continues.
However, gone are the days when distributors could distribute and market products for every client. Instead, they are now considered the logistical side of the process. They’re in charge of moving the product, but the wineries must be in charge of selling it.
The next play in the new playbook is to acknowledge that not all buyers will receive your product the same way in every market. Therefore, before you can begin to sell, you have to research the market first. You have to know your ideal customer and what other major players you may be competing against.
Doing this research gives you realistic expectations about what your goals should be and allows you to tailor your approach to each client.
Modern Ways to Sell and Market Wine in the US
In the new playbook, there are two crucial things to keep in mind. One is that it’s all about building relationships. The other is that your marketing has to take advantage of digital options.
Focusing on the following tools will help you effectively sell your wine in the modern market:
- Lead generation
- Email marketing
Customer relationship management, or CRM, is a service you need for genuine, long-term relationships with multiple clients. CRM software allows you to manage all your customer information in one place. By pulling up a customer’s account, you can see how many times you’ve been in touch, their needs, contact information, and any research or notes about them.
There are dozens of CRM companies to choose from. The one that’s right for you will depend on your company’s specific needs, but at its core, each company has the same goal: to help you manage your relationships with your customers to meet their needs effectively.
“Follow-up is the key to great sales,” Salisbury explains, “and the best way to have perfect follow-up is using a CRM system.”
Too often, we fall into thinking of sales as purely transactional. “Real selling requires 10, 12, multiple touchpoints… it’s a longer-term play,” says Salisbury. He quotes Mastering the Complex Sale author Jeff Toole, “A sale should be nothing more than a by-product of a much larger relationship.”
Salisbury identifies the three most important things for selling wine on-premise:
- Putting the customer’s needs first
- Having a long-term approach
- Bringing real value to the business relationship
Using a CRM allows you to do all these things. By managing your client database with CRM software, you can quickly grab your phone and pull up all the information you have on a customer.
Where in those 10-12 touch points are you? When was the last time you spoke with them? Do they have specific needs, like wine for a Sunday brunch or happy hour? Do they sell by the bottle or by the glass?
Hendricks sums it up: “In CRM, the sale just happens naturally.”
Without relying on your distributors, how do you land customers to add to your CRM? While networking and industry events are still valuable to your business, your day-to-day marketing should be based on lead generation.
Lead generation is the process of drawing in potential clients and piquing their interest so that you can form a relationship that will eventually lead to securing their business. With the internet constantly at our fingertips, generating leads is now easier than ever. However, it’s not always as simple as throwing up a few Facebook ads.
“You’ll need a lead magnet for something like this,” says Salisbury. A lead magnet is something that draws people in. Why should they click on your ad or give you their email address? What will they get in return? Your lead magnet needs to offer them something.
For your company, this could be an email list with coupons, first access to deals, and insider news. Or try offering exclusive access to informative webinars. Post educational blog posts to help familiarize retailers with your winery and the wines you offer.
Take advantage of platforms like TikTok, YouTube, and Instagram and give your followers an inside look at how you make your wine.
You also need to be sure that you’re marketing to the right audience. When you set up ads on spaces like Facebook, you can set your audience so that only specific people will see your ads.
For example, if you’re currently only set up to distribute within California, you want to be sure that your advertising budget goes towards directing your ads to people living in California. There’s no sense in those ads going out to people in New Jersey, Alabama, or Ohio.
Once you’ve gained leads, the next step is to use email marketing.
“We like to use Facebook and Instagram ads for the purpose of enrolling email subscribers,” says Salisbury. “Then, later, expertly and patiently use email marketing to nurture and then convert them into sales.”
In most cases, you won’t be sending the same emails out to a new subscriber as you would to an established client. Your subscriber list needs to be segmented to tailor your emails to the appropriate group.
Using your CRM, you can track which categories each client falls into. Are they new, or have you worked with them before? Are they a restaurant or a wine store? What types of wines are they looking for? When you keep track of all that information in CRM, you can quickly pull it up when the customer contacts you.
Understanding How to Do Things at Scale
Scalability refers to selling, producing, and distributing the greatest amount of product while maintaining integrity and increasing costs. So what does this mean for wineries?
“A seller and a buyer sitting at a table drinking samples, this is not scalable. It just can’t get you where you need to go,” says Salisbury.
“But if you do a webinar where you’re giving expert training on blending, for example, and the only people who would be interested in a webinar like this would be very experienced, very knowledgeable sommeliers. And you had 40 or 50 of them show up for that webinar, and they had to register for that webinar. That could be the beginning of managing a relationship with a large group of trade buyers. This is infinitely scalable.”
Every company has a finite amount of time and resources for marketing. You have to find the most effective way to reach more clients while working within these constraints, meaning finding marketing strategies that introduce you to a greater range of clientele and are also buildable so you can continue to expand and grow.
Making Brand Stand Out Through Better Customer Relationship
“A lot of winers have a lack of understanding of what motivates a restaurant wine buyer, or a retail wine buyer,” Salisbury says. He identifies two key things that motivate buyers: a unique and profitable product and an uninterrupted supply.
Right now, the market is saturated with superb wines. To secure buyers, you need to do your research on potential clients and form relationships to determine how you can help them. Great wine isn’t enough anymore.
“It’s figuring out, ‘here’s a weak point in your portfolio, here’s how our wine will fit the bill there and solve your issue,’” says Hendricks. This is only possible by forming a relationship with your client. When they know that they can trust you and that you’re trying to fill a need, the sales come naturally.
Supply chain issues have hit every industry in one way or another. However, when you have a customer relying on your supply, especially a restaurant, you need to have ways around those supply issues.
Ways to Use Data to Better Navigate the Three-Tier System
While going digital and forming relationships with your clientele is vital in the playbook, that doesn’t mean the three-tier system is going anywhere. However, it’s essential that your direct-to-consumer team isn’t completely separate from the three-tier team. The best way to ensure communication is by using a CRM system.
When both sides of marketing share the same customer management, you’ll gain a more complete picture of your client base. Both sides can see the markets the other is working in, and they can communicate and see if there’s an opportunity for both to operate.
What Data and Modern Tools Can Do to Help Winery Businesses Forge Better Relationships
As mentioned above, today’s market relies on cultivating relationships to create long-term clients. The best way to do this requires four steps.
First, as we know, is using lead magnets to generate leads. Advertise wine online through platforms like Facebook or Instagram to get email subscribers.
The next step is research. Once you have someone subscribe, you need to do some homework. Utilize tools like LinkedIn, Google, Yelp, and Facebook to figure out what type of business they are, their location, customer base, and hours.
No one wants to click a link to sign up for emails only to spend five minutes filling out a form. Don’t make your customers do that legwork, do it yourself.
Enter all your research into your CRM. Once you’ve put in all the information you have, you can proceed to make your first contact with the customer. Make sure you log all contact within your CRM to help you know what stage you’re at in your relationship.
Researching ahead of time allows your first interaction with the client to feel more like a conversation and less like an interrogation. Research allows you to anticipate some of your clients’ needs, and those clients will appreciate the due diligence.
Times have changed. There are now so many ways to gather and organize the data on your customers. Utilize these to form relationships with your clients built on trust and communication. Let the new playbook take your wine business to new heights.