With a year that can be well described as “special” now thankfully dwindling into the past, we’re beginning to feel a restored optimism as we look forward to 2021. And as we know, it’s never a bad time to create good strategy, so what better time than now to be building our strategies for keeping our wine club members close.
As we continue to adapt to the new reality for wineries and tasting rooms, we are learning more about the importance of strategically pivoting our business models towards better capturing and retaining wine club members — the core drivers of our DtC channel. The most recent numbers from Commerce7 reports that wine club attrition rates in 2020 averaged out at around 23%, with an additional 3.3% of club members across the board requesting their club memberships be placed on hold; more than triple the rate for the previous year.
Here, we present 5 strategies for improving your wine club’s attrition rate (plus one bonus tip), but first we need to begin with a look at your current situation.
Conducting an Audit of your Wine Club
If you manage a wine club, you are, without a doubt, keenly aware of how many new members you’re signing up each week or month, and how your sales numbers are looking, particularly in relation to your projections or targets. But as a wine club manager, with a plate that is always generously loaded up with action items, how often do you get a chance to really dive in to the data and spend some time interpreting the numbers, seeking out and attempting to correlate trends, and understanding on a strategic level what needs to be done next?
One reason why it’s important to do this is that it can inform you what happens when a member leaves your wine club. Of course, we’re all aware of some of the warning signs that we’re being ghosted: bounced emails, non-working telephone numbers, expired credit cards that haven’t been updated, and those awkward moments when our club members pretend not to see us when we’re next to each other at the deli counter, (just as an example.) What other signals can we look for which might indicate decreasing engagement?
Opens and clicks emails, buys beyond standard wine club shipments, attends events, visits winery and brings friends (if local)
Opens emails, but doesn’t always click on a link, no problems with wine club shipments (all are received), may attend events (if local)
Emails never opened, sometimes bounced, requests to skip shipments or shipments not deliverable, never visits winery
Declining tasting room visitation, and wine clubs facing heightened competition for member wine rack space has meant that of the four ways to increase wine club revenue — 1) Get more members, 2) Sell them more wine, 3) Charge more for the wine, and 4) Keep members longer — #4 has become the most attainable goal, and is the focus of this article.
5 Strategies to Help Reduce Your Wine Club Attrition
1. Define Your Wine Club’s Positioning
Before we talk about your wine club’s positioning, let’s start with an exercise: In the next 30 seconds, describe the type of person likely to stay a member of your wine club for 5 years. Go!
Knowing who your wine club members are will help you understand how consumers perceive your wine club. From there, you can begin to think about how well this perception is serving your winery.
Looking at the traits of your longest-standing members will inform you what kind of people your wine club resonates with most, but looking at the traits of your newest members will let you get a feeling for how your wine club is being perceived currently. Of these members, who buys the most wine? Who brings the most friends to visit (and possibly the most new customers)? And who consumes the most of your staff’s time?
After going through these exercises you will be able to gather information about what kind of people you want to appeal to, what they care about, and therefore, what you should be doing to make sure they remain loyal club members.
2. Create a New-Member Onboarding Program
What happens when someone joins your wine club? Do they receive a welcome email right away? Do they receive a hand-written note from the host who signed them up? Anything else?
Chloe Tyer, Director of Membership for the iconic Napa Valley winery Heitz Cellar in St. Helena, describes the 24-48 hours after a new member joins their wine club as the time interval that sees the highest cancellation rate. “People are visiting Napa from Chicago and they have six hours to visit five wineries. They have these … sparkling Napa eyes — everything is beautiful, they love all the wine, they love the vineyards, they’re in love with their partners, and then when they get back home and they’re back in their routines and the credit card bills start coming in, with all the wine clubs they joined, they start thinking, ‘What the hell did we do?’ — that’s when they start cancelling.”
As a wine club manager, you’ve seen more than enough new club members who joined while they were visiting the winery, had a good buzz going on, and liked the idea of getting their tasting fees comp’ed, only to reject the first shipment and quit soon after.
Tyer ensures that new club members receive a welcome email within 24 hours, and a Welcome Pack within 5-7 days. The timing of the welcome pack is intentional and is designed to coincide with the possible buyer’s remorse new members might be feeling after returning from their wine country vacations.
If a couple returns home after visiting Napa and they’ve joined five wine clubs, and one of those sends a hand-written note welcoming them to the club, along with a high-end print piece which explains all their member benefits, which wine club do you think they’ll stay with?
Wine club on-boarding processes are pretty scant, with almost all wineries having nothing in place beyond a single welcome email. Some wine club managers report sending out a hand-written note to welcome new club members, which helps create a feeling of connection.
Ridge Vineyards, with tasting rooms in Lytton Springs (Alexander Valley) and Monte Bello (Santa Cruz Mountains) has had a formal on-boarding process in place for ten years. Ryan Moore, VP of Consumer Sales for Ridge Vineyards explains that new members receive a welcome email on the day they sign up, and a Welcome Packet is ready to go out in the mail that same day. The Welcome Packet includes a standard letter explaining their member benefits and what to expect in the coming months so there are no surprises, a hand-written note from the person who worked with them, along with that staff member’s business card. Additionally, the welcome email contains a link to a page on Ridge’s website which gives 10 suggestions for getting the most out of their membership. Lastly, new members who display as not having opened the welcome email receive a follow-up phone call just to make sure the email was received and if the member has any questions.
The number and quality of these touch points during the period before the first shipment, the more personally invested (that is, loyal) your wine club members become. Likewise, adding an additional touch point between the first and second shipments can securely cement your club members in place for a longer term. After that, it’s your job to continue to get to know your members and show them that you care.
At Kunde Family Winery in Kenwood, near Sonoma, Wine Club Manager Chris Trinks attests to the importance of excellent customer service at every point of contact with a club member. “Access,” Trinks says, “Is why people join the wine club, and excellent customer service —in person, on the phone, and by email — is what makes our members stay.”
3. Provide Dedicated Wine Club Training for Your Staff
Are your tasting room staff incentivized to sign up as many club members as possible? Or are they incentivized to sign up people who will stick around a long time? Knowing that it costs significantly more to sign up a new member than it does to keep an existing member, this is where your focus needs to be. If you pay your tasting room staff a meaningful amount for club sign-ups, but also consider early departures into the compensation calculation, you’re probably more likely to sign up members who will become more loyal to your winery, because you’re a good fit.
Helping your tasting room staff understand the needs and desires of the different demographics that come into your winery will go a long way towards matching people up to the appropriate wine club, or speaking to them about the club in a way that resonates. Millennials, for example generally are in it for the experience, while Gen Z, who began coming of drinking age in 2016 and are pegged to be the largest generation of wine drinkers, are generally less about cool experiences than they are about cool products.
4. Follow Your Wine Club’s Trends
How effectively is your winery able to track the behavior of your wine club members? Do you have technology in place that allows you to see when a member’s engagement drops to a lower level? Whether your winery is large enough to have a technology solution to help you, or you’re exporting data from your CMS into Excel in order to do hard battle with pivot tables, knowing where your members are, in terms of their membership lifecycle, is crucial in knowing how to speak to them.
What patterns can you identify related to how or when your wine club members decide to leave? Do your members typically leave after a certain amount of time? Or after they’ve accumulated a particular quantity of wine?
Chloe Tyer and Ryan Moore both describe how they are able to monitor club member engagement, and send only relevant emails based on knowledge they’ve gained about their members’ preferences as the relationship continues. Additionally, the winery management tool Commerce7 now has built-in algorithms for predicting a member’s likely cancellation, claiming a 90% accuracy.
5. Offer Longevity Incentives
How are your wine clubs’ discounts structured? Is it a flat percentage regardless of tenure? Does the discount deepen after 5 or 10 years? Do longer-lasting members receive more benefits? If you offer your maximum discount the moment a person joins your wine club, there is little left to surprise your members with over the long haul, and as Rob McMillan says (do I need to mention who he is? We all know him, right? SVB? State of the Wine Industry Report? Yes, you know) “You can’t keep shipping the same thing, because it won’t give them the same zing.”
Also, instead of offering your club members a discount on wines during their birth month, send them a gift instead. Send them a wine key with a hand-written note, or a winery t-shirt — something that isn’t a sales pitch, and use it as an opportunity to let your members know how much you appreciate them.
6. Reconnect With Former Members
Ok, this one isn’t about retaining wine club members, but it’s still a worthwhile thing to do. Most people who opt out of your club didn’t suddenly start hating your wines. There’s a very good chance that they opted out for some other reason; either they weren’t keeping up with their wine shipments or they had too many clubs, or whatever, but if offered their old club discount on their next order, there’s a very good chance they will happily take you up on that offer, and even decide to rejoin.
At Heitz Cellar in St. Helena, Napa Valley, where former members are referred to as Wine Club Alumni, the word, “Cancelled” is never used. Tyer, who lives by her credo that “There are no bad break ups,” makes it a point to keep in touch with her wine club alumni. “They didn’t stop drinking, they don’t hate wine, maybe we just weren’t right for each other at that particular time,” and so she sends a monthly email that is non-transactional, just to stay in touch.
As a Napa Valley winery, efforts like this serve to help all of us. There are no hard feelings, no bad tastes left in the mouth — visitors to Napa still get to cherish the time they spend here, and they’ll return someday too.