Social Media Takes Stage at WITS

Wisdom from the Wine Industry Technology Seminar: How to make the most of new platforms, inexpensive solutions

by Jane Firstenfeld & Jim Gordon
WITS keynote speaker Pete Blackshaw
 told his audience to remember that,
"Service is the new marketing."
Napa, Calif.--The multi-voiced conversation that represents the current state of social media took center stage at the fifth annual Wine Industry Technology Symposium in Napa on July 16 and 17. Speakers advised the 300-plus people in attendance that they need to not just use the influential new platforms, but also take control of the conversations about their brands.

On Friday morning Pete Blackshaw, executive vice president of digital strategic services at Nielsen Online, reviewed the current marketing landscape in his keynote address, "Dancing and Drinking with Megaphones." Few winery websites have actually graduated to Web 2.0, he said; by failing to adapt and become fully interactive, wineries have yet to take advantage of the "new media" and its ability to incubate conversation.

"In today's landscape," he noted, "consumers are in control." The power of search engines, for example, "rewrites the rules and is redefining brand equity," he said. "Service is the new marketing. It's the most important activity."

In monitoring online dialogue about wine, and "mapping conversations," Nielsen uncovered dueling influences, Blackshaw said, in which public relations and paid advertising in traditional media such as Wine Spectator, for example--are battling with the non-traditional, multi-platform "new media" of Gary Vaynerchuck and his Wine Library, where the New Jersey wine retailer leveraged his website as a launching pad.

In the online world of Facebook, Twitter and YouTube, wineries must become acutely aware of their brand DNA: How do people talk about your brand in the never-ending conversation of today's Internet? "Credibility is all," Blackshaw warned. Your company must earn consumer trust with authenticity and transparency, by listening and responding to what consumers have to say.

"Shape your image by managing the conversation," he stressed. Creating customer loyalty via interaction will result in increased consumer advocacy of your brand, helping you to attain the coveted pinnacle of "virality."

Getting commercial

Blackshaw's message was underlined by the first keynote panel, "Social Media and Commerce," moderated by Julie Brosterman, CEO/founder of Women & Wine. Panelists Stephen Gilberg, founder/CEO of DrinkTwits; Philip James, founder of Snooth.com and Adon Kumar, president of Wine-Searcher.com, spoke about building a community, making it relevant to the wine world and making it drive revenue.

The size of your online community, James pointed out, is not necessarily correlated with the revenue it generates. And, he noted, the online community "governs itself." So winery marketers must carefully nurture their own communities and use others to extend their brands, because, "Building your own is a long road." One of your most important functions, he suggested, is to feed your community with content.

Tech and three tiers

The keynote panel tapped three veterans of wine sales and information technology to discuss where the biggest returns on investment come from in technology spending and how trading partners can better collaborate. WITS co-chair Smoke Wallin moderated and asked each panelist for his biggest mistake in technology.

Eric Wilson, former CIO of Raley's markets, said a major lesson he learned was to have businesspeople in a retailing company lead the IT initiatives, and not the reverse. He stressed that business objectives need to drive change in a company's technology, and that business managers need to be heavily involved in a company's evolution toward technological efficiency.

From the wholesale/distributor tier, Bill Healey of the Charmer Sunbelt Group said his most sobering lesson was to understand the resistance to technological change among employees, customers and suppliers. Take time to educate everyone, urged the vice president and chief supply chain officer, whose company recently completed a lengthy conversion to an SAP system. Moderator Wallin joked that Healey was the only person he knows whose wine and spirits company had successfully completed conversion to the notoriously intricate German software product that handles enterprise resource planning (ERP).

Representing wineries, Robert Celsi of Trinchero Family Estates reminded attendees of the difference between pioneers and settlers (pioneers are the ones with arrows in their backs), adding that small wineries should let the big wineries be the pioneers. He also echoed Healey's point about taking time: "In IT, you take one bite of the elephant at a time."

The conversation centered on electronic data interchange (EDI), the process of connecting trading partners on the same systems so they can communicate seamlessly. Most big retailers now are ordering electronically from distributors, Healey said. It may be out of reach for most small wineries to participate in the three-tier EDI, but there are things they can and should do.

"Make sure your product description is done right and provided to your trading partners," Wallin said. Wilson, the retailer, said merchants need 140-character product descriptions from the wineries (same as the Twitter character count), and if wineries don't supply them, "We're going to make them up."

Celsi of Trinchero added that wineries need to take responsibility for pricing consistency across the United States, because this and other tasks important to wine sales are being pushed back on the wine suppliers. Wilson added that Raley's now uses an "e-contracts" feature online to electronically negotiate deals with suppliers.

Celsi seemed to sum up the take-home message for most wineries: It's OK to have a nice website and a Twitter marketing effort, but wineries should realized how little most consumers care about these. They still make many if not most decisions right in the store, based on the label, the pricing and the shelf-talker.

"It all comes down to making it easier for your trading partners to sell your product," he said. "You need to have a unique selling proposition, either from a profitability standpoint or a consumer preference standpoint."

Breakout sessions in brought specific, practical tips on topics including Technology Leadership, Consumer-Direct Sales, Trade Sales and Marketing and Vineyard & Winery Operations; some of these will be available in video form later this week at wineindustrytechnologysymposium.com. Here are some highlights we captured:

Emotional metrics

In Friday morning's first keynote panel, moderator Julie Brosterman reminded the audience not to forget that "Wine is an emotional thing." Emotions played a starring role in an afternoon breakout session entitled "Consumer Direct Metrics, Benchmarking & Best Practices." Moderator Tammy Boatright, president of Synchronicity Consulting, introduced the "consumer relationship lifecycle," which she likened to romantic relationships that start with awareness leading to conversion, engagement and loyalty. In winery-to-consumer-direct marketing, these states of attachment must be business-specific. Measuring these levels requires defining your consumers consistently within your own business strategy.

"The first part of a relationship is getting noticed," said Jennifer Becker, founder of Ensemble Marketing Group, who asked, "Have you noticed a decrease in traffic to your tasting room?" Several audience members raised their hands.

Maybe it's not just the economy, Becker suggested; maybe you're not generating awareness. Wineries need to define and enact an awareness strategy, she said. Potential sources of awareness include word of mouth; gatekeepers like concierges, neighboring wineries, etc.; events, advertising and media coverage, outreach including e-mails, and of course, social media.

Building, maintaining and using your customer database is key: Make sure your staff is consistently capturing data at your winery. Maximizing search engine hits through advertising, she said, yields great "bang for the buck."

Customer "conversion" is like a couple's first date, according to Pamela Hiett, regional direct sales manager at Jackson Family Wines. Put your best foot forward to create a positive customer experience--defined as a customer's perception of all interactions with your winery. Try to exceed expectations by optimizing four key elements: Consistently identifying and satisfying customer needs; intentionally articulating and understanding your role; differentiating your brand from your competitors and, ultimately, making your brand valuable to the consumer.

"Add value to your customers' experience," Hiett emphasized, by understanding their lifestyle and understanding your brand's values. There are numerous ways to measure your success at conversion, she said--average order value, contact information, club/web sign-ups, and revenues per case--but measuring is essential.

Dan Michael, marketing director, consumer direct sales at E. & J. Gallo, addressed engagement. It's a two-way street; no one gets engaged alone. "Call your 800 number," he urged. "Check the 'contact us' link on your website." These basic steps can help ensure that those who are interested will stay interested.

The "rules of engagement," he said, mean that both sides understand the terms of wine club contracts. The winery must acknowledge this dual commitment, keep its promises, know what the customer likes, celebrate your anniversaries. "Successful long-term relationships," he pointed out, are nourished by listening and an occasional surprise. "Keep your eyes on the prize"--customer loyalty, he said.

Wine club shipments can be a sore point. You've got to deliver, Michael said, or your members may be pacing the floor, asking anxiously, "Where's the baby?" You may have charged a member's credit card, but the transaction's not complete until the package is in his hands. "I hate returns," Michael stated. Successful shipments equal the number of delivered packages divided by your total active club membership, he said. Other metrics include attrition, reorders, website traffic, shipping vs. gross margin.

He urged winery-direct marketers to commit to an event calendar, create a signature event, and above all, lead with service. Active member retention strategies include "personal touch" programs, acknowledgement of milestones and surveys. Pamper your best customers with invitation-only events, in-home tastings and the kind of personal attention you'd lavish on your significant other. "Make them feel your brand is a service to them," Michael said.

Low-cost technology

"Free or Low-Cost Web Technologies to Run Your Business," a break-out session on Thursday, provided numerous tips to wineries from Mike Blom, the owner of Napa Barrel Care, who uses these at his business, and Brad Gates, director of infrastructure for Fosters Wine Estates Americas, who uses them at home.

One tip was to skip buying Microsoft software for your small business. Openoffice.org and others provide free software that replicates many of the functions of the MS Office suite. Rather than pay for servers and software to manage his 20,000 barrels and winemaking tasks, Blom pays $275 a month for Vintners Advantage, a web-based winery service.

Both Gates and Blom advocated web-based backup services like Mozy.com, Google Docs and Google Apps for small businesses rather than backup servers and/or software of one's own. Blom uses an online payroll service. Gates pointed out that wineries can handle label compliance online with the TTB and get approvals within 48 hours, rather than six weeks by mail.

Prescription for success

The final stop on the direct-marketing track, "Prescriptive Approach to Social Media Success for Wineries," brought on board experienced practitioners of social media. "Wine is a recommendation-centric product," observed moderator Laura Levy Shatkin, president of Winepeeks.TV. This alone makes wine especially well suited for consumer driven communiqués, even though some wineries and retail-direct marketers may be disappointed in the web as a direct-sales tool. "Buying online," Shatkin said, "is less important than the connection" created between vendors and consumers.

Tim Elliott of ACAN Media and winecast.net outlined Best Practices for Twitter's current 27 million users: First, "listen to existing conversations," he said. When you feel ready to join the exchange, "Brand your presentation with a customized background." Follow people who are tweeting at sites like winetwitter.blogspot.com and wefollow.com; share links, ask questions, be helpful and authentic, and speak with a "human voice;" announce your events and specials, and for every "commercial" tweet, post at least nine that are less commercial.

"Agent Red," the anonymous, self-titled founder of Thewinespies.com, presented an overview for B2B social media users: He recommended using a separate persona for business-to-business and consumer users. "Develop an authentic voice; be transparent and clearly identify yourself by your position," and, he recommended, "Adapt your voice to different venues." Asked later about these seemingly contradictory tips, he clarified that for overtly commercial messages about daily wine offerings and coupon codes, he is strictly business, "but I don't want to be crassly commercial in my personal tweeting." He did not explain, however, exactly how one can be what he termed "deeply personal" within Twitter's 140-character limit.

It's important to evaluate your competition, he continued, to understand your comparative standing in the social landscape; to reveal new strategies for your brand and to gauge customer reaction. Social media can help you to create cooperative opportunities via your social network. "Help others, don't expect the same; encourage dialogue, suggestions and feedback," and, he proposed, ask your competition to recommend you to their own customers.

Social media consultant Shana Ray said
that wineries, with their compelling
stories, are natural subjects for online
Consultant Shana Ray, mentioned that you can make your winery's presence felt by devoting as little as an hour per week to befriending bloggers, sending useful links, listening-in to Twitter and getting Google alerts. Ray recommended, however, making the social media part of your everyday work life with half an hour in the morning and another in the afternoon. "It's not a fad," she said. "It's a change in communication." Ray suggested that wineries ask customers to guest blog on their websites.

As with other marketing channels, target your audience. "You don't have to get everyone on the web," said Evan Cover, CEO of wine-data aggregator Cruvee.com. Monitor and listen, he urged. Build a strategy before engaging.

And, Ray added, "Integrate all your formats," so that your winery's essence remains the same across all your promotional platforms. She re-emphasized the compatibility of wine with social media: "Wineries have stories," she noted. "Wine is meant to be shared. People are talking about it, and you can influence what they say."
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