Ron Scharman is the Co-founder and CEO of Astra Digital, a digital marketing agency for the wine industry, and CEO of FlyWithWine, a unique storage suitcase for traveling with wine. He has over 30 years of experience in the direct-to-consumer industry, working in COO and President positions with New Vine Logistics (Wine Direct), eWinery Solutions (VinSuite), Chatterbox Wine Marketing, and VinoVisit.
Ron is an instructor for a wine e-commerce course and direct-to-consumer wine marketing seminars at Sonoma State University’s Wine Business Institute. Ron received his MBA in finance and his bachelor’s in agricultural economics from Cornell University.
Here’s a glimpse of what you’ll learn:
- Ron Scharman shares how he took his brand from the runway to great heights through innovative marketing techniques
- Why you need to understand your audience to effectively market your brand
- How has retail marketing technology changed the online wine space?
- Ron explains why marketing software is crucial to scale your alcohol brand
- Why you should be tracking KPIs to measure and improve social media engagement
- How to drive results through virtual tastings, wine clubs, and communications
- The value of advertising to new customers to scale your winery
- Ron describes his thoughts on strong, seamless omnichannel marketing practices
In this episode with Ron Scharman
How do you improve the lifetime value of your winery’s customers? Is it possible to engage with consumers using creative content that is budget-friendly and advantageous to your brand?
Ron Scharman noticed turbulence in the way wineries utilize their digital marketing strategies. He has created a digital system to help wineries discover and engage with their audience. Ron knows that unless a metric can help you make a decision, it’s useless. By utilizing virtual tastings, clubs, and email marketing, you, too, can establish lifelong customers and drive results.
In this episode of Legends Behind the Craft, join Drew Hendricks and Ron Scharman, Co-founder and CEO of Astra Digital, as they have a conversation about how to connect with your consumers through digital marketing. Ron shares how technology has changed the digital wine marketplace, the importance of digital marketing services, and why innovative and engaging strategies can lift your winery to new altitudes.
Resources Mentioned in this episode
- Barrels Ahead
- Drew Hendricks on LinkedIn
- Ronald Scharman on LinkedIn
- Astra Digital
- “What Is The Value Of A Winery Email?” By Ron Scharman
- Tank Garage Winery
Sponsor for this episode…
This episode is brought to you by Barrels Ahead.
At Barrels Ahead, we know that your business is unique. That’s why we work with you to create a one-of-a-kind marketing strategy that highlights your authenticity, tells your story, and makes your business stand out from your competitors.
Our team at Barrels Ahead helps you leverage your knowledge so you can enjoy the results and revenue your business deserves.
So, what are you waiting for? Unlock your results today!
Welcome to the Legends Behind the Craft podcast where we feature top leaders in the wine and craft beverage industry, with your host Drew Hendricks. Now let’s get started with the show.
Drew Hendricks 0:19
Drew Hendricks here and the host of the Legends Behind the Craft podcast where I talk to the leaders in the wine and craft beverage industry, from tech companies that enable wineries to run at optimum efficiency. Today’s guest Ron Scharman. His contributions to direct to consumer wine sales segment are too numerous to mention. Today’s episode is sponsored by Barrels Ahead. At Barrels Ahead, we work with you to implement a one of a kind marketing strategy. When that highlights your authenticity tells your story and connects you with your ideal customers. In short, we help wineries and craft beverage producers unlock their story to unleash their revenue. Go to barrelsahead.com today to learn more. And I am super excited today to talk with Ron Scharman Ron’s the Founder and CEO of FlyWithWine, a unique wine travel luggage company that markets the VinGardeValise product line Ron also runs Astra Digital, a digital marketing agency serving wine industry clients in North America and Europe. Welcome to the show, Ron. And, again, I’m sorry for mispronouncing VinGardeValise.
Ron Scharman 1:23
That’s fine. That’s fine. Thanks. Glad to be here today.
Drew Hendricks 1:26
Oh, man, thank you so much for being on the show. So tell me so we’re right now we’re recording in January, and it’s brand new year, what’s in store for flavored wine?
Ron Scharman 1:38
Well, unfortunately, due to the pandemic, only crime, wine travel is still restricted. But I think the breakout of people wanting to travel certainly domestically, which happened last late spring, which brought a lot of travelers to California from other places in the US was was just great for our business. We’re still missing all the international travels from Asia and Canada, and Europe, and South America that used to come to to wine country. But the US consumers are certainly traveling and buying a lot of our products. Well, that’s
Drew Hendricks 2:17
fantastic. I’d taken a step back, I guess I jumped to it a little more, to give us a little background of FlyWithWine. Idea Come
Ron Scharman 2:24
FlyWithWine was started well, our company FlyWithWine started six years ago. But before that, two years before an inventor in North Carolina, in New Mexico, guy named Barry wax, set an idea and invented this product, which was a wine suitcase, which was unique because there was nothing like that in the in existence. And he was looking for ways to market it. And he came to I came to know him from my prior company I was running, which was Vinovisit.com, which was a like an open table for wineries winery reservations. And we had a huge database of people who made reservations of wineries. And we built an E commerce site on the on the vino visit reservation platform. And we would send out emails and market wine country products like barrel furniture, like a cork accessories, stemware, winery maps, and the number one selling item was this wine suitcase. I got to know the founder and in 2016 when vino visit was sold, I decided to leave and start up. Well two companies one was Astro Digital, the other was FlyWithWine, which is our DBA. And I partnered with the inventor to basically help market that product to the wine industry and ultimately took total control of the products were basically the the exclusive marketer and seller in in North America right now and Europe to some extent. But it all started with you know, just realizing that people who are in wine country really love the product. And and that was before we got into tasting rooms got into other other sales channels as well. But so it was also a time when I was traveling overseas a lot. And I was in Europe going to wineries Germany, France, Italy, Spain. And the idea of trying to get wine back to the US typically through the winery’s would send you to mailbox etc. And you’d go there with your wine and they would ship it and God knows how long it would take and where we go and whether we even get there and how it’d be handled. And I went through that a few times. And so it was clearly I was looking for a product that could could could address that. And that’s what how I discovered the founder of the VinGardeValise.
Drew Hendricks 4:53
That’s, that’s, that’s great. Sorry. That’s it. It’s a tremendous. I mean, it’s a great problem that you’re solving. I mean, I know I’ve traveled and Finding a shipper in the wine country is often one of the harder things to do all the wineries, shippers.
Ron Scharman 5:06
Well. The other thing is if you’re spending spending $200, a bottle or more on Cabernet or whatever it is, or Pinot Noir up in Oregon, you’re spending good money, or anywhere where you’re spending a high value. You know, you’re at your, you know, who knows what happens when it goes to UPS or FedEx ships on a loading dock in the sun in the sun in the summer and summer cooks? Or freezes in the winter? Instead of putting in in the suitcase and taking with you on the plane? No, no, that’s that’s kind of the whole point. And it’s really, I mean, this was our greatest year ever this past year, and we’re over 300 tasting rooms. We’re on Amazon, we’re Neiman Marcus, we’re in total wine and Dillards. And you know, we’ve really built a really great put footprint, in addition to our own FlyWithWine website.
Drew Hendricks 5:54
What sort of feedback? Are you hearing from the wineries that are selling? Well, wineries,
Ron Scharman 5:57
we had to convince them initially it was quite an obstacle, and originally had to do with our consignment six years ago, because they wouldn’t. They just didn’t believe that their customers would want a wine suitcase. And they kept saying you don’t understand. There’s a problem that we’re solving a problem where they say, well, it’s too expensive merchandise to sell. And I would say, Well, this is this is a sales tool. It’s not a piece of merchandise, you’re solving a problem your customers have, trust me, once you have it, they will you will sell it, it will sell more wine. And once they got that message, and we’ve done training over the years with them that they really upsell customer customer may only want to buy six or seven or eight bottles and you’ll upsell them, you know, to a case because you have one suitcase, right? It’s just became really a great sales tool and increase the you know, the other other part of it is that obviously goes into the sales calculations for bonuses and everything in the tasting room. So once they start selling it you know the Hey to eight to stop. And it’s really built quite a following in. In California, Napa, Sonoma, Oregon, Washington our primary markets doing really well.
Drew Hendricks 7:08
That’s amazing. It’s it’s all in here all its worldwide right now and sold in wineries across the across the world as well as in large department stores. Where do you see the biggest growth segment is it as wineries are expanding out more to Amazon and to the traditional retailers?
Ron Scharman 7:27
Well, we’re just working now, for example, signed a deal with the PGA we’re going to be working with the PGA on a whole wine and golf lifestyle kind of thing. Because obviously, people are sick and tired of getting golf hats and shirts and paraphernalia at these tournaments. And with no little, you know, we have three sides of the suitcase of piccolos five bottle the petite eight, and the Grande is 12. But you can put your your clothes and wine in the suitcase. That’s what makes it unique, right, you can mix and match what you want. So getting a little small suitcase, why suitcases as as you know, in these tournaments, or in the pro shops, I mean is very exciting for the PGA. Now the thing is add specialty, you know, giving, giving it as a gift, whether for sports teams, or Las Vegas hotels, or whatever it may be. And then there’s the whole travel tourism side where people are doing to group trips to wine country. And what we do is we put custom plates on the on the suitcase, see the logo of the winery, or the name of the sponsor. And so when tourists come, it could be like Yokohama tire that comes to Napa. And they they have they bring 60 of their their important sales folks to Napa. And when they arrive at the hotel, and the room is this is a wine suitcase with their name on it. So I mean, those are, those are kind of the the more outside of the box kind of things that we’re working on instead of just, you know, putting in selling in wholesale channels, you know,
Drew Hendricks 8:59
I mean, that’s, that’s a great, that’s a great value added. That’s a great swag gift. I mean, it would really get that over the golf shirt, as you mentioned. Yeah, yeah. And it’s not a it’s has to increase the direct to consumer sales in the winery. Because now that people don’t have an if they’re gonna buy the suitcase, they’ve got no excuse to fill it.
Ron Scharman 9:20
Right. And we do also drop ship for all of them. So if they have somebody that wants once that comes into the tasting room, and they want us to drop ship it for them, we can ship the suitcase anywhere in the country. Also will have some of the wineries will, you know come holiday time will buy 50 suitcases they’ll fill it with wine and send it out to their top customers or they’ll do a wine club shipment for their high end wine club and they’ll ship it out to their top customers inside the suitcase, which we put in a gift box. We have a white gift box that we do for them. So there’s lots of different ways they can use it for loyalty and retention at the wineries and you know, it’s again, it’s a it’s a tool. It’s a sales tool. It’s not just a piece of it. You know, a souvenir,
Drew Hendricks 10:01
just luggage, not just a product and wineries. They’re all everyone’s looking how do you distinguish yourself? How do you differentiate yourself in in this marketplace? And that’s kind of shifting it. That’s your background. You’re kind of one of the legends and direct to consumer and some of the creative strategies you put together. How did you get your How did how did you get your background in direct consumer? And what led you into that?
Ron Scharman 10:26
Well, it’s, it’s one of those things where like, people will ask me, I teach at Sonoma State. Also, younger people asked me like, how did you get to do what you do now? And I said, Well, it’s sort of a little bit of planned randomness. You know, you planted a planet of randomness in your life, and you meet people that change your life. So I had been after grad school, I went into banking, and was doing investment banking and got into doing workouts and turnarounds. In working for a small I left to start with the to two bankers, ex bankers to start a merchant bank. And we invested a bunch of companies and we started doing workouts turnarounds in retail companies. And that led me to get involved with equity, private equity funds, like Goldman Sachs, like Natalie high yield, Morgan Stanley, and others that had investments in retailers, where the principles were, the founders were principles and I would be brought in to help run those companies to help in a sense, protect the the founders from the, the investors, so that you know, and grow those businesses. And one of them was a cosmetics and fragrance chain that was in about an eight states. And then in 2001, I was recruited to become a CEO of morale and company in New York, which is, you know, pretty was very sophisticated in terms of the channels they were in. It’s one of the largest retailers in the Northeast, and they had their shop at Rockefeller Center, they had a wine bar, they had another restaurant, they open wine auction house, wine storage business, and about 2 million catalogs a year that we we sent out through the New York Times. blue bag, they stuffed it in with the newspaper as well as the mailing list, and we had two websites. So and it was a big private investor, Stevens investor Stevens investments out of Arkansas, who had invested in originally Walmart, and they owned 50% of the company. And of course, they thought 50% meant that they had control well, when the other 50% could say no to anything, it became a real stalemate. So they brought me in as sort of the voice of reason to deal with them real families. And during those four years, was really when this is prior to social media, but still ecommerce was right after the you know, 2001 was the the meltdown of.com But still people were you know, ecommerce was was just in its in its nascent stages in the wine industry anyway, but we had we we did really well with Bert, you know, I was able to integrate catalog ecommerce and an outbound telesales team of 10 people it was really great plus introduce wine education, we have Morel Wine Institute for Education Morel wine events, I started for, for wine events, that focused on the on the folks that were in the investment banks, accounting firms, law firms, high net worth individuals roll get together. And you know, and, you know, get, you know, convene around one common theme, which was great wine, and morale had 75% of the customers morale. I should say at that time. 75% of the wine that they sold was was over $30 A bottle is 2001 to 2005. So you may not know the significance of that, but at that time, that was that was better than anybody we really had that high end. We had a vault It was literally store was it had been a vault of a bank at one time in the back was a vault where we kept all the crown jewels. It’s just they had the Ocean Division. I would go to the auction went around auctions and I would have a paddle and I’d be buying wines at auction to put in the vault. And so we became as an example, the only one probably in America, but certainly in the New York area. If someone was doing a high end dinner on the Upper East Side of New York and they needed, you know, a cases of vintage wines of Harlan or Opus, or whatever it might be. We would have them in stock because of the the way I use the auction house to feed it a little ahead of my time in that regard. But in a sense, I got a good A good really understanding for wine consumers really good understanding of imports versus domestic wines at price points that was sort of my, my great education in wine, commerce, not, not just ecommerce, but wine commerce marketing. And so in 2005, when my I’ve one son in college, the other one was was going to college, my wife and I decided to move out to Napa, which we had gotten to know from the early 90s When I was running a company in LA and come to get to know Napa. And so when I arrived, the 2005 was a whole new scene, I mean, a whole new thing with with a Granholm decision having been announced that that basically said that states cannot discriminate against in state and out of state wine shippers are wineries but they could complicate. So they passed all these specific laws to complicate interstate shipping, even though it was technically so called legal. You needed permits and everything else. And so I came out to Napa and I was recruited to run new vine logistics, which is now wind direct, but that was like the pioneer in wine, winery fulfillment and in in compliance, because we had a sophisticated technology and algorithms to manage the licensing process. That was before this was no ship compliant at that time. So is really the one of the pioneers in that whole area. And we were able to ship to something like 32 states that time using this, this this complicated three tier shipping mechanism. And we you know, we got a lot of wineries on board doing that. And after two years, I really felt that my heart was really in marketing and sales and not in not in managing logistics. But I really believed in the future was ecommerce and so I invested in a friend of mines business, which was a winery solutions that was 2007, which is now Vince sweet. And we built that up into you know, one of the largest e commerce players in the wine industry and got to you know, we had about 801 requires time. And I focus more on the marketing, you know, an education side. And I got to see again at that time, ecommerce what people wanted was a shopping cart. There’s one in 2005 people were still faxing business coming in via faxes and telephone. Why do we still not have shopping carts, if anything, they might have a web page for information. But it really started around 2007 which is the same time that Facebook launched and a smartphone launch. So that’s 2007. Before that, there was no iPhone, there was no no Facebook. So those things tended to really drive awareness and people decided really that they needed to have shopping carts. So we really mushroom that company up. And then of course, long came other competitors in the industry. And you know, right around
Drew Hendricks 18:17
2004 I had the intellect which was helping independent wise stores with their ecommerce systems. I can tell you what, I can commiserate what an uphill battle that was convincing them.
Ron Scharman 18:29
Well, some some didn’t even, you know, didn’t you know, didn’t believe it. Even even later on just as an anecdote. In 2014 to 16 I ran I left the winery in 2014 really to focus on marketing, pros running vino visit and chatterbox wine marketing, which did telesales, one of our clients was, was Shapell, a, and they still had 5% of their sales at the high end, Prichard Hill. 5% of their customers still preferred to fax in their orders because they didn’t trust putting their information in shopping cart. And it’s 2014. I mean, it’s now eight years, but it’s still, it was hard to believe that that faxes are still you know, still prevalent, still important. So. But in any case, the E commerce I really saw that whole evolution of E commerce 2007 was was Facebook and other social platforms. Smartphone was only 2010 that the tablet iPad came out, which is pretty amazing. 2012 was the advent of html5 which was it was an incredible advance because it replaced the need to have Adobe you know, Adobe Flash which you know, that scrolling problem but you’d sit there waiting, waiting, waiting waiting for the images to load. And html5 which is a content programming language allowed much faster. or speed on on mobile mobile devices. You know, and then you go through the advent of you know, the smartwatch and Alexa and all the other smart, you know, voice activated technology. And now we have augmented reality. And now you’ve got you know,
Drew Hendricks 20:22
you got to get the metaverse
Ron Scharman 20:24
Metaverse, you got everything else. So I mean, we’re, you know, gone through all of that seen all of that, and how the implications, what implications are for marketing, you know, I’ve been fortunate enough to see and be able to look at trends and try to be ahead of the curve. Also, having come from outside the wine industry, I, I’ve been following, and watching retail marketing technology all along the way, and trying to implement ideas from outside the wine industry into the wine industry wherever possible.
Drew Hendricks 20:54
That’s, that’s important. And that’s I’ve been in and out of the wine industry for the last 30 years. And what I always tell us some of the stuff that I learned in hospitality, or in the legal side of the work, they’re on the cutting edge of what marketing has been doing, until I bring that back into the industry, and so much value. You talk about a lot of the history of technology over the last, you know, 20 years, what’s that common theme or that mindset with not just the retail customer, but with wineries and retailers selling wine? I mean, there’s, I, I’ve got an idea for the evolution, but maybe you can, I’d like to hear what you’re thinking,
Ron Scharman 21:28
well, terms in terms of what well, like Well,
Drew Hendricks 21:31
back in the day, so we actually share a very common history I to kind of stumbled into the wine industry. I graduated with a degree in philosophy and attic Greek, and then got an MBA in finance, but needed to find a job in San Francisco back in 93, and got a job as a stock boy in a wine store. And it was right then where we helped them build the first you know, website. And then we actually ran out, we actually were running some wine auctions in the mid 90s. And the wine store. But I always saw that our customers and maybe it was because the San Francisco, but we always had a very tech focused customer base, where they would love every new trick and every new kind of way to buy wine. But what I saw was the resistance being on the wine side, and being on the actual store of selling the wine, not embracing it, and wanting kind of that old, kind of old school Hanso hand conversation, touched the bottle, then make the sell. And I see that kind of evolving of last 20 years. Yeah,
Ron Scharman 22:33
I mean, I think wineries that the real issue is that traditionally, the owners of wineries came from outside the wine industry. And we’re really successful in other businesses forgot everything they learned once they came into the wine industry, you know, so and wineries will spend a million dollars on landscaping, but they won’t spend 10 cents on marketing. So that’s that’s that mindset permeates into what how they approach technology? Because when there’s a cost associated with technology, just like with marketing, it’s they don’t look at it in terms of what is this going to do for me? I mean, how much more productive what’s my what’s, what’s the benefit of this financially, they only look at it as an a cost. So they don’t, they don’t really, you know, they don’t like they don’t view view in the same way other than in the accounting department. So accountants tend to roll the room. So accountants need software, they get software, maybe the wine makers get it too, but marketing and you know, the other aspect is software is a tool technology are basically a set of tools. And if you don’t have the people that are capable or willing to use the tools, it’s a waste of time. I mean, we had one great example. I don’t know what the year was, was maybe 2009 or something. We had my E winery days, we had all the great big clients, big wineries were our clients for we did all the websites for Constellation for Gallo for Diageo for Treasury, Kendall Jackson, I mean, we had them all. And I remember constellation had this decision, they wanted to implement Oracle CRM, not just in the, in the, in the headquarters, they wanted all the way into the tasting rooms. And so they spent a couple million dollars with Oracle and they spent a ton of money with us to do a hell of a lot of custom programming to to implement the system for all their wineries. And they were never able to roll it out because it was such resistance to the complexity of running reports because they were the tasting rooms and the marketing people at headquarters also were used to you know, easier systems to use. They tried to use Oracle which was was very complex, and you needed to have programmers in house to do the kind of things needed to do so they ended up just basically grabbing it. And so even at a lower level, that’s the fear factor of well, if we implement this technology we’re gonna have to people have to learn and I’m more comfortable with the system I know than the system I don’t know. So that often became a reason why great example is, you know, AMS, which was around forever. It’s, it’s like the dinosaur of the wine industry, because it was the one unified system that had accounting, warehouse inventory management, winemaking and everything, any commerce, but the shopping cart was really underperforming. It was really not not up to par. I might say more, but you stronger words, if I was if I had a glass of wine with, but it was, you know, it was always behind a tunnel to the trouble is that the people who made the decisions were the accountants they wanted, they wanted AMS the people in the marketing departments wanted the winery, they wanted Vince sweet, rich now why direct, they want commerce seven, they want something else. But you know, it took it took an AMS didn’t integrate with anything in those days. So it was really resistance, we had situations where we were able to convince the winery 221 was actually to who had AMS to have us build websites for them, they ran it for six, eight months. And then they were forced by pressure to turn them off and go back to AMS again, because there was set because of the lack of integration problems. Even though the marketing solution, you could sell a lot more wine. But it didn’t matter if the accounts couldn’t figure things out. So I think technology in the wine industry is very often a problem of people that are not willing to do work around it is sometimes required to get a better outcome for the user and the end user, the consumer or for the marketers, or because they’re just resistant to change period. You know, they like things the way they are and and fax machines work fine. Why should we have a shopping cart?
Drew Hendricks 27:03
You know, there’s there seems to be an undo respect to the thought of yesterday being better that kind of gentrified farmer, the very low fi technology, whereas any sort of e-commerce is an infringement any sort of automation, or any sort of predictive selling is an affront to that idealized dream of the way wine used to be, is kind of what I see a lot.
Ron Scharman 27:27
Absolutely, absolutely. And, you know, I think what’s changed, the big change came when, when there was a transition of, of generations, where the younger generation coming in said, hey, you know, and social media, same thing with social media, you know, it took a while for people to get with social media in terms of the importance for for marketing as a channel, you know, it’s not just noise, it’s because because, you know, this gets me to Astro, our digital agency was was was was born with a concept that social media got a bad rap in the wine industry, not just in the wine industry outside too, but specifically in the wine industry, because they never had any metrics around it. So nobody could prove their work. So we created an agency that was really what we call metric driven digital marketing, making sure that we could create certain metrics or KPIs that we could measure you spent $1,000, on on advertising, digital advertising, what did you get for it? Could you tie that transaction, Google Analytics or someplace else? So you could say, Okay, I know that I got every 1000, I got 5000 back, that kind of broke, broke the the bit the myth a little bit, because we started to prove to clients and overtime got a pretty good reputation around, you know, that kind of, of social media marketing, which is, you know, some of it is just is just brand brand building enhancement. But what has to pay for itself has to be something that you can measure improve, actually drives results
Drew Hendricks 29:01
to a smaller winery that maybe doing it themselves and not able to hire an agency to set the KPIs. What’s the starter KPI that a winery should start tracking on social media?
Ron Scharman 29:13
Well, first of all, there’s a little bit more around that. You can’t track you can’t, you can’t pick a KPI unless you’ve got the ability to track. So the question is, forget what is the KPI you got to be tracking. So all your social media posts, as well as your emails and everything should have tracking codes, we call them URL, you know, urgent, you know, UTM urgent tracking modules, or COVID is a snippet of code. So every social, everything has to have codes. Then you have to have Google Analytics set up on your website. So you can track where your sources are coming from Where’s traffic coming from? And ideally, depending on the the ecommerce platform we have something that called a Google Advanced e commerce set up so that you can actually measure a social media post or $1 spent on boosting that to a sale. So I mean, I think it’s more about being able to track sources before I do anything else. So you got to have the tracking setup to see, okay, for every, for all the posts, I’m doing what is happening? Well, you know, how many, how much traffic? Am I getting to my website? How much engagement I getting, like shares, whatever it might be? And, and how much what conversions Am I getting from that? Just doing those those things will allow you to make intelligent decisions? Because, you know, I have a saying, which is, unless a metric can help you make a decision, then it’s useless. I mean, so just tracking I know, some people, you know, and, you know, I’ve worked for people like this over the years, they’d have these flash reports, all this stuff. And then or board members companies have run, they’d have all the demand for this information. They never look at it. Right? So a metric in its own self does is useless unless it can help you make a decision. So the same thing with social metrics, you can you know, you can you can track everything. But the question is, what am I going to do with it?
Drew Hendricks 31:15
That is fantastic advice. Now, that kind of like the way you describe that. I often describe it as if you’re not tracking anything you’re doing branding. Once you start tracking once you start, yeah, you’re doing marketing. But too many social media sites are just branding, enhancement. And it could
Ron Scharman 31:32
be bad branding. If there’s no even way to measure whether it’s good or bad, right?
Drew Hendricks 31:39
Oh, yeah. No, if you’re just posting it out there and hoping they’re gonna go, yeah, so how they say that. And now with the wineries you talk, I love the quote about the million spent, you should be spending at least as much on your lands on your website, as you do in your landscaping. In that, in that makes to a lot of wineries or to a lot of wineries, especially in Napa and Sonoma, where you’re on a well traveled Wine Route. It is the landscaping that may lure draw the person in as they drive by. But in today’s expanding wine world, there’s a lot of wineries that are in you know, our lawn pokes garage district bring that 10 city that really isn’t lowering the people in based on the landscaping, and the only thing you really have is your digital footprint, which is your new landscaping. Do you see this evolving within with these new digital natives? And how do you how are you at Astra in I’m gonna I’m not gonna steal it. But I’m we’re confronted with the same ways. How do you convince them that there’s a new breed coming up in the digital landscape? Maybe the new landscape?
Ron Scharman 32:37
Well, I mean, it started for us back in in the fires in Santa Rosa. I mean, I think it’s three years ago. And wineries in Napa were closed for a month and a half because of the smoke that came from Santa Rosa. And a president of a pretty famous winery called I’ve known for years, my software days, called me and said, Ron, my customers are dying, getting older. We have more fires than ever. Can you help me? I need to get new customers, how am I going to get them? And I can’t tell you how many conversations permutations on that I’ve had over the last few years, promoters of wineries realizing that the days of just you know, great location is all you need. Right and a pretty tasting room that there’s no annuity and that you know, there’s too much competition when when Napa had had you know, 200 wineries versus 1000 or 1100. Now maybe half which open to the public and Sonoma the same thing explosion was easy, but now the competition is like so fierce. So I think the battle is over in the regard the only question is making the case in a way that they can justify the the economics I had a referral yesterday from a goes back to my vino visit days a winery in Sonoma makes beautiful wine smaller over time they’ve grown that their bankers Silicon Valley Bank riemeck recommended us to them because they really need to improve their their top line numbers. And that’s a convincing thing they never would have. We’ve talked to them for years never but they weren’t going to do anything but their banker recommended they do something right. Everybody’s out there recommending you know digital marketing strategy, whether you do it in house or or you outsource it. You have to do something you can’t stay. You can’t stay passive. The other thing is one has to think about this. If the wine market overall in the United States, Sony growing by 1% Now here and so more brands are growing really strongly. And imports are growing. They’re making great wine all over the world. Like whose height is Just coming out of who’s losing it, right? It’s coming out of someone’s high. So you can’t just assume the past is not a great predictor to the future. And so every people worried about this. I mean, we, you know, I was very heavily into doing webinars during the pandemic. And a lot of it, it was really about politely getting off your ass and doing something and thinking in terms of virtual, you know, virtual tastings or virtual wine clubs and using it as another channel, communicating with people that can’t visit so often not being so dependent on this, this opiate, which is the walk in wine club member, you know, and so a lot of people got the message. And a lot of people develop that channel and or, you know, have mixed it in now, obviously, there was a fatigue factor. But I think wineries today, most wineries realize they need a digital strategy. That’s like saying, I need to lose weight, or I need to, you know, I need to cut down on sugar or whatever it might be, doesn’t mean that they’re going to actually spend money to do it just yet. But there’s an awareness, there’s an awareness,
Drew Hendricks 36:09
it definitely is. I like to mention top line revenue. And that’s where I think a lot of people mistake marketing, they confuse it again, with branding. And really, they’re like the new term that’s coming out, I’m still not used to using it. But it’s tying marketing into revenue and having that full revenue operations, and full revenue strategy, because a lot of marketing, the whole purpose of it is to boost revenue. So it shouldn’t be tied with sales, and it should be tied with the that kind of operating segment, which is where you get the commerce in. And I think presenting marketing on that level, becomes a little more intriguing to wineries and that they can actually see that it filtering down to the bottom line and not just more of a vanity type of process.
Ron Scharman 36:51
Well, one thing I dwell on, and stress a lot with wineries is the idea of new customer acquisition. Like, what’s the value of a new customer? You know, I have this whole thing, I’ve wrote a blog, you know, what’s the value of an email? Because wineries are so you know, and I explained to one is that the whole mathematical calculation, how you how you can figure out what the value of an email is. So and in Napa, I mean, it’s anywhere from 15 to $35. And calculations I’ve done for an email. So why are you not compensating your tasting room staff heavily for the value of an email, and, and yet, you may give them an incentive for wine club, but email, maybe you don’t think of so important. But the reality is that the value of a customer which comes from having that email is so important, because that’s the annuity. To give you a situation analogy, analogy situation, which is just the opposite is FlyWithWine, most people don’t need more than one wine suitcase. So I have to calculate, okay, what’s the most I can spend to acquire that new customer? Right, if the if the if the suitcase sells for $350. And my profit margin is let’s just say it was 50%. In theory, I shouldn’t spend more than $175. Or even less than that, because I customer 90% of the time is not gonna buy another suitcase. Now, they may refer me something else, right. But a winery, the lifetime value of a winery. A winery, customer could be the wine club members, probably 2000 If you add any other sales, maybe three or 4000. So in theory, they should be able to spend several $1,000 in advertising, just to get a new customer. Yeah, but believe me, they don’t, they will do that. They don’t you know, not initially, initially, you make the argument? I’ll tell them I’ll ask, okay. You tell me what the value of a new customers for you. And I’ll give you the numbers, okay, we’re going to use your number. And we’re going to roll out an advertising budget based on that. Right, because at least we have a metric, you know, the value of a customer that we can tie to an advertising spend. But that’s that’s the same thing as tied to the top line, you got to somehow tie it to the revenue number, what’s the value in revenue number? And then it’s easy the math, it’s all mathematics?
Drew Hendricks 39:11
No, that’s, that’s great advice for any winery on figuring out what’s your customer cost of acquisition, and what’s your lifetime value of that customer? Right, right? How do you increase that? How do you do they keep them club members longer, bring in new and that kind of ties into content? And I know that’s very important for Astra and what your what is what, what in your what advice? Would you give wineries creating content on their site? Aside from just gotta have good energy? Everyone’s got that?
Ron Scharman 39:39
Well, I think what what wineries have don’t understand in a real in a real time sense is that is the importance of relevance for content. There’s a seasonality factor. You know, you have to make sure you can’t just, you know it if you’re looking at wineries that that will will show photography from winter when it’s summer or summer when it’s winter, or spring when it’s full and vice versa. So having relevant content that’s timely, that’s ongoing. And it’s really again, it same thing with websites. You know, it’s about the consumer, not about the winery. Right? So that’s, that’s one of the key things that I have to go into. Just Can I pause one second? Because you’re back in business again.
Drew Hendricks 40:31
Yeah, talking about content and having it relevant and resonating with the seasons and resonating with the customer. That’s he hit the nail on the head there, and that it has to resonate with the customer. In your opinion, how many wineries actually understand who their buying buyer persona is?
Ron Scharman 40:50
Well, it’s, it’s, let’s just say that most don’t. And what’s interesting is, whenever we start with a client, we do something called a digital audit, we analyze the winery against three competitors. And we go through whole analysis of, of their social media footprint of their email, how they appear in third party sites, user experience in a website, SEO and a bunch of other things. But one of the things is, if we do the brand persona, who do you think your customer is? We ask them, then we analyze their social media stats to see who they are, we look at Google Analytics who’s coming to the website. And very often, it’s totally different than who they think who they’re who they think their customers, because they may think of it anecdotally, from the tasting room scenario, like who’s walking in, you know,
Drew Hendricks 41:45
and the customer to be?
Ron Scharman 41:48
Right? Well, aspirationally, then you can say, here’s who we’d like it to be. And we do that with that’s maybe a recommendation, we can see clearly from the social and the Google Analytics. And even from MailChimp. Well, stats as well, we can see pretty much who their customer is. And so, you know, and very often, they’re often off the cuff remark and their social media, the look and feel of the website, very often is not consistent with who the you know, who their customer really is. And so that’s a real aha moment for them, you know. So I think assuming is not never a good idea, you really should look at, at the information that’s available to figure that one out.
Drew Hendricks 42:28
Absolutely. Because then I guess the choice is either, these are the type of people that seem to be resonating really website. But these are the type of people that you would really like to have will either have to alter it to where you’re aspiring to reach, or you need to keep on going and know that your marketing needs to be directed towards this existing your existing customer base. So it can even resonate a little bit more. Absolutely, absolutely. That you see a lot of the kind of the newer, newer, I wouldn’t say younger ones, that’s the wrong term. But there’s a lot of very mission focused wineries coming out. And they, it’s very easy for them to attract a certain audience, because they’ve kind of laid it all out on the line on what their what you’re going to be like, and then they attract it. But a lot of people, a lot of the wineries start with a vision of or they start with a dream, a founders dream. And they I think a lot of wineries assumed that the type of people that are going to come to that winery, are the ones that embrace the founders Dream, which found isn’t often the case.
Ron Scharman 43:26
Drew Hendricks 43:30
Yeah. And this has been a good conversation on it. I do want to ask though, right now, who is going into 2022? What advice do you have give wineries for the direct consumer?
Ron Scharman 43:42
Well, I think we’ve leapfrog five to 10 years in e-commerce. I said, I would say that this day was not supposed to come, but it’s here. The numbers I saw from clients what they did the last year 2021 And two, a 2020 and 21. were incredible. Blew my mind in some cases, and then investing in strong integrated we call omni channel marketing that integrates sort of seamless social media, email, AdWords other together in a unified way, can really bring great results because e commerce is here to stay. And if you don’t do it, someone else is going to do it and take it you know, again, that 1% You know, you got competition all over the place. And you got competition now whether it’s with drizzly or you know total total wine is growing like crazy. There’s a lot more you got wine calm. You got a lot of other places for people to buy wine online. Yeah. So you have to really think about how can I get new customers and then of course all the changes in privacy with with App iOS and with Google, that are going to make it a little more challenging to do get new customer acquisition, doing look alikes, and things like that. So I think one really has to be invested in this area. Because it’s hard to find more people work in the tasting rooms. All right, there’s more competition, people are going to, you know, for wine clubs that that than ever before. And the the old way of doing things, it’s just not gonna, not gonna help. I mean, for sure.
Drew Hendricks 45:32
Where would where would you like to see ecommerce systems go in the next year? I mean, we were talking can be platform agnostic, but the commerce sevens, the wine directs events sweets. So Ron, where as far as we know it wineries need to embrace it. But for the POS companies for the e-commerce companies, for the commerce sevens, the wine directs the Vin sweets of the world, where would you like to see their development progression go in their roadmap in the next year or two?
Ron Scharman 45:59
Well, I think there’s a lot of tools that are plugins for, for other platforms outside the wine industry, that it boggles my mind that you don’t have with a lot of the platforms. I mean, things like cart abandonment software, which should be a no brainer, which only one or two platforms have referral referral platforms. Easy, right? Why don’t we, you know, want to get more referrals. I mean, so we’ve had to Jerry Rick using using some, some referral software programs that should be built in, you know, retention, loyalty, such a big part of, of, of the wine business. So I think those are those are two examples of things that, you know, are really important that they should they should add
Drew Hendricks 46:47
that I would love to see that that you just hit the nail it to two things that we struggle with all the time. Yeah, they should be part of the system. So as we’re wrapping down, got asked to do by or most right now in the wine industry. Who do I Who do you admire most right now? I think
Ron Scharman 47:05
the one that really, I mean, it’s, it blows my mind, are the other folks who Tank Garage up in Calistoga. They’re the most innovative. Why marketers, ecommerce players in in person, you know the events, they do the whole thing. Shout outs ed feuchuk who’s like one of the real, real smart, smart marketers in the wine industry always has been known him for 15 years. Going back to my software days, but he’s really created what I think is a is a great example of how in a traditional marketplace like Napa, you could do something totally outside the box. Totally going after a different audience, creating such a great social media presence and doing it with a lot of fun. Yep.
Drew Hendricks 47:59
I was actually thinking of them when I said how many wineries understand the persona, and there’s a few upstarts that really get it. It was tank garage was in my mind. Yeah. Yeah. Love. That’s great. So when you’re not when you’re not marketing, when you’re not being entrepreneur? What keeps you busy?
Ron Scharman 48:17
Well, I mean, absent. COVID I mean, we were wine travelers have been all over the world. And we always go to Europe a couple times a year, we travel all the way down wine country. So you know, I missed that the most late late fall, I was able to get up to Washington for a week Washington wine country to those state, Oregon. So I hopeful as was to go to Europe in March, we’ll see. But to me, that’s it when I’m not doing that I’m hiking or reading. You know, but it’s all about it. You know, gotta have something to look forward to. Oh, yeah. Those trips that are the things that keep you you know, working 24/7 As long as I know there’s a light at the end of the tunnel. Is that is that trip?
Drew Hendricks 49:01
Yeah, I just postponed our trip to Piedmont we were supposed to go at the end of February now it’s gonna be 2023. But we got we’ve got a trip up to Oregon plan, so that’s gonna be fine. Great, Ron, where can people find out more about you? And Astra and FlyWithWine
Ron Scharman 49:17
FlyWithWine is you know, they go to flywithwine.com if they are interested in wine travel suitcase. We also are a huge seller of Gabriel Glas, which is incredible stemware from Austria, so that we’re also coming out with a wine hive, which is a a wine storage unit that’s in the shape of beehive cells, things like that coming up. So that’s that’s FlyWithWine And then there’s Astras www.astradms.com.
Drew Hendricks 49:51
For all your DTC winery needs. Yeah. Well, thank you so much for joining us today.
Ron Scharman 49:56
My pleasure. Pleasure being here.
Drew Hendricks 49:58
I’ll talk to you later Ron. All right. Thanks. You
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