January 2008 Issue of Wines & Vines

Tasting Room Rewards

How staff compensation can raise the bar on direct sales

by Jane Firstenfeld
Peaks Winery
Ancient Peaks Winery's new tasting room in Santa Margarita on the Central Coast is already drawing crowds; many of its tasting room employees earn college internship credits as well as salaries.

  • Tasting room staff represents the front line of a winery's sales force, often selling the majority of a boutique operation's production.
  • Though most employees work part-time, they need to be compensated appropriately.
  • Recognition can be almost as important as monetary rewards.
  • Recommended compensation varies among consultants and wineries, so seek the balance that's best for your situation.

Tasting room and wine club sales remain the most reliable and profitable marketing channels for boutique wineries throughout North America. Yet the most productive face-to-face salespeople--the people who sell wine by the bottle, case or wine club membership in winery tasting rooms--are part-time employees, often paid $8 to $10 per hour and untrained in effective sales techniques. Innovative strategies for motivating and compensating this all-important front-line sales staff are essential.

I spoke with a representative sample of professionals who focus on tasting room sales for multiple wineries, and with individual tasting room managers to find out the norms and their recommendations for compensating and motivating sales staff. They did not agree on all points, but there was general consensus on the following:

  • Recognize that visitors' interactions with tasting room employees can make or break their entire experience with your winery.
  • Learn what--besides salary--really motivates your staff members.
  • Encourage wine club sign-ups with commissions, but make sure staffers don't force the issue with high-pressure selling tactics.
  • Accurately measure tasting room performance, and reward it frequently.
  • Support a sense of teamwork among staff.
  • Be creative with your compensation plan--non-monetary rewards can be very effective.

A survey conducted for the article "Selling Face to Face" (Wines & Vines, June 2008), graphically revealed the impact of tasting room sales in small wineries across the continent. Perhaps predictably, our results varied by region: The vast majority of respondents from the central and eastern states reported that tasting room sales accounted for 76%-100% of their direct sales. A smaller percentage but still a large number of Northwestern and California wineries relied as much on tasting rooms for direct sales. About three-fourths of all respondents produced 10,000 or fewer cases per year. For wineries like these, the face behind the tasting bar literally becomes the face of the winery. Therefore, keeping employees, keeping them happy, and teaching them what and how to sell is of prime importance.

Who's minding the store?

According to winery sources, the labor pool for tasting rooms primarily consists of four types of people: teachers, retirees, at-home workers and students (some of whom hope to use their tasting room stint as an entrée into the industry).

Owners of small wineries may have gotten into the industry as a lifestyle choice, and that also may be an important issue for their tasting room employees. Advertisements for tasting room attendants tend to emphasize "outgoing personality" above wine expertise, but once on board, these server/salespeople must have sufficient knowledge to educate wine novices and converse with real or would-be experts.

Peterson WInery
Peterson Winery in Healdsburg is a client of consultant Rebecca Germolus. Here, owner Fred Peterson's brother Mike pours for the public.

To these people, part-time employment may be a benefit in itself. Flexible schedules can be a plus. Compensation can come through a feeling of inclusion: attending winemaker dinners, learning details of the vintage directly from the grower, and barrel tasting with the winemaker. Wineries should be aware of whom they hire and what they are looking for in the job, according to Rebecca Germolus of Maximum Value Marketing in Sonoma County. "One size doesn't fit all," she says.

Part-time scheduling does not necessarily mean that wineries are trying to avoid paying benefits. In the tasting room, where servers may be pouring only a few wines per season, it can be a key to avoiding employee burnout. Welcoming customers behind the bar--and completing successful sales--requires a certain amount of showmanship; but like actors in a Broadway play, the performance can get stale. Craig Root of Craig Root & Associates Visitor Management Resources, St. Helena, Calif., recommends tasting room staff work a maximum of 20 hours per week. He also recommends that each shift contain a mix of older and younger employees with different skills and demographics to relate to the variety of customers who may arrive on a given day.

A logical practice is to include tasting room staff in the larger corporate structure--invite them to winery milestones, harvest celebrations and wine club activities. "It's so easy to do, not that expensive, but it makes the front line feel like part of the culture, and gives them additional talking points with visitors," says Dixie Gill Huey of Trellis Wine Consulting in Vancouver, Wash., who teaches wine marketing at colleges in the Northwest (See her "Marketing Matters" column). "Recognize that their interaction with visitors can make or break the entire experience. The visitor is going to associate the employee with your brand."

Join the club

Virtually every winery has a wine club by now, and selling the wine club to tasting room visitors can hugely impact the bottom line. The average salary being advertised for tasting room employees is between $8 and $12 per hour, although workers can often double their take-home pay with club sales commissions.

Typically, incentives are structured as a fixed bonus per sale--$5 to $20, depending on the level or length of the membership purchase. The margin for a wine club membership, which is retained an average of 18 months, can amount to 50% for the winery, while tasting room bottle/case sales bring a 30% margin. So wine clubs can be the winery's biggest, and most reliable, cash cow. Tasting room staff must be trained and motivated to milk that cow.

"When the winery can't sell a wine to a wholesaler; when the tourists are gone, what keeps them going is wine club shipments. It's guaranteed cash flow," says Veronica Barclay of St. Helena, Calif.-based Barclay & Co. Staff must be rewarded for signing on members, she stresses. "Anyone who is not doing it is a fool."

So far, a lot of wineries have not gotten the message. In our most recent survey, only 37% of responding wineries agreed that "It is important for direct-sales staff to get direct financial incentives for sales and collecting contact information."

People, including visitors on a relaxing visit to a tasting room, don't like to feel they are being "sold." The most important factor in wine club sales is, simply, "Letting your customers know it is available," according to Pamela Personette, director of hospitality training for Sonoma's Illumination Hospitality Group and an instructor for Sonoma State University's new tasting room management program.

Staff should determine if the wine club will meet a particular visitor's needs, and then sell him on the benefits. Wine club benefits can include special "members-only" events, discounts and even reserved parking spaces at the winery, in addition to monthly, bi-monthly or quarterly wine shipments. Commissions are established depending on the price-point of the memberships sold.

Barclay and Root believe that wine club commissions should be paid to the individuals who make the sale, rather than pooled. Barclay observes that even a relatively low $5 or $10 commission per sale can make a noticeable and appreciated difference, adding an additional $200 or $300 per pay period. Root recommends including commissions with every paycheck, broken out so staff can see the results of their efforts.

On the other hand, Germolus is a great believer in team-building. When a tasting room is inundated by a large crowd, "It's difficult to do wine club sign-ups individually." She believes teams that work together should share commissions. "If you do things as a team, there's less erosion than if everyone is working for themselves," she says.

Root contends, "When everyone gets the same, the hard workers get lazy." But, he concedes, "When you pay a high incentive, you may get 'club sharks' who are overly aggressive." These people must be warned, disciplined and perhaps eventually dismissed if they fail to pull their weight with other tasting room tasks.

At Ancient Peaks Winery's new Santa Margarita, Calif., tasting room, the wine club is still in its infancy, but employees receive a bottle of wine for every sign-up, and for every 25, the seller can select a $100 gift card of his choice.

Just rewards

Though typical tasting room salaries don't represent a living wage in many North American wine regions, all of our sources are keen on providing incentives in addition to club commissions. The most common is the employee discount, most often 50% for wine. Tasting room merchandise may also be discounted for staff, and this can be especially advantageous if employees gift family and friends with winery logo wear.

Setting sales goals by day, week or month also can boost morale and build team spirit. These should be tracked and measured; POS software makes it simpler for larger operations. At Lincourt Vineyards on California's Central Coast, everyone gets a take-home bottle when the daily sales target is met. In the same region, Beckmen Vineyards' tasting room staffers each take home a bottle with every paycheck, and they get another when sales goals are met.

Ancient Peak offers an unusual incentive for its new tasting room employees: many of them are students at nearby California Polytechnic University, where the viticulture/enology program now requires graduates to complete an internship. A tasting room job can supply that, in addition to the cash and prizes.

According to Dixie Huey, Willamette Valley Vineyards in Oregon maintains a system of internal sales competitions, in which tasting room teams are awarded cash for the most club sales or sales of a particular focus wine, for example. This, Huey believes, prompts employees to encourage each other to make more sales.

The tipping point?

As a long-time habitué of tasting rooms, I was startled to notice a number of openings offering salary "plus tips." Is tipping really gaining a toehold in tasting rooms? The idea seems somehow unseemly for wine country culture. The consultants agree that it is becoming more prevalent, and they say the concept is being driven by consumers, rather than wineries.

At Lincourt, "Tips are not expected, but are appreciated," according to a statement on credit card receipts. "People asked us," says tasting room manager Tory Peña. "Typically, groups will leave a tip," which is then pooled among the staff.

Undoubtedly, the practice of charging for wine tasting has accelerated the practice. Huey suggests it would be most suitable in tasting rooms set up like wine bars. One place this seems to be working well is at Gilbert Cellars' new tasting room on "restaurant row" in downtown Yakima, Wash. Tastings are $5 (refunded with any purchase), and small-plate pairings of food are served a la carte. Starting salary there is $9-$10 per hour, but servers are racking up tips of $10-$40 during the day shift, and twice that or more during the evenings, according to tasting room manager Anders Zwartjes.

We hope that some of our tips will help our winery readers to make the most of their tasting rooms, where the world comes to your door.

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Posted on 02.11.2009 - 07:55:17 PST
There's a lot more here than meets the eye.

As free tastings are replaced with paid ones, visitors are probably less willing to tip, given that in their eyes, they're already paying.

And while allowing individuals to keep rather than pool commissions, a tasting room could end up with a few decent earners, a couple of very aggressive (and possibly very off-putting) sales sharks, and the rest - who just want visitors to enjoy themselves and don't want to "push" too hard.

Setting the right atmosphere is key - make people feel comfortable, and have knowledgeable staff who can speak intelligently yet casually about what they're pouring and what's available. That's the best "sales technique" for a tasting room.
Metuchen, NJ USA

Posted on 06.28.2015 - 14:56:31 PST
I have worked in a tasting room (3) for over 8 years. It is a minimum wage job. Often times employees take this job because that is what the industry is in their town. Not compensating employees for performance is foolish. Your employee is your front line. They WILL make or break your brand. A "untitled" jar of cash on the counter doesn't ask for a tip, but it suggests. People are often uncomfortable on how to tip a Tasting Room Associate. Also, Tasting Room Associates do MORE than just pour wine (or they should!). A bartender pours a drink and gets $1 per drink. A T.R.A. educates, informs and often time is the concierge for their town. Show some gratitude! Give that person a few bucks. The guest probably had a great time, got educated and if the T.R.A. did their job, wine went out the door.
Take care of the staff, they will take care of the business.