CREATING TRUST – USING ALLOCATIONS EFFECTIVELY

Selling via an allocation method is commonly associated with the higher-echelon of wineries.

But just because we all want our wines to command the demand of Harlan or Kosta Browne doesn’t mean wineries should jump into an allocation model. This doesn’t automatically make your wine scarce, rare, or desirable.

Consider this: allocations are less reliable than a Club because you don’t have the permission to run the card – the customer actually has to accept their allocation. So, you’re really using a scarcity tactic (“Act now while supplies last“) which indicates there is a lot of trust involved.

We’ve all seen those mattress, futon or electric stores that are forever “Going out of business” and offering “crazy” prices. But after they’ve been going out of business for three years, as a consumer you start to realize that the marketing tactic is a lie. You don’t buy there ever again.

Allocations in a New Winery

Unless you have a well-known winemaker or parcel of land, or a great rating or press, it will be hard to induce purchase without trial. And allocations, by nature, are not about trial. Allocations are not based on the customer’s need or time-frame; it is when the winery says, “you can have it”. The customer must trust to purchase 3, 6 or sometimes 12 bottles at a time that may, or may not, be relevant to them. Therefore, launching a new winery on allocations is not recommended.

Allocations in an Existing Winery

Base your decision on some metrics – like your traffic, segments, how your customers respond to various offers and sales patterns. It is best in this scenario to employ allocations for specific types of products.

Limited Releases

These are usually time based, or inventory based.  In time-based examples, you are offering a wine for a pre-release to get orders ahead of time.  This could also be a “post-release” or library find of some aged wine that has been stored for years and now a small amount is available.  In either case, sometimes anyone can buy, or just a select group, but the release is time-based.  An inventory based limited release would be if there was a small lot available.  This may be an experimental blend from the winemaker, a great grape purchase that couldn’t be passed up, or perhaps bad weather that limited production in a usually productive vineyard or lot.  In these cases, inventory is driving the availability and it usually not time based, but until supplies run out. [1716183_small]

Wine Club, or Customer Segmented Allocations

Here your scarcity tactic is not based on time, or inventory, but the customer. You may want to have wines that are only available to the Wine Club, or follow up the attendees of a harvest weekend party with an order on the wines they blended. It could be as simple as selling the last 10 cases of your Chardonnay to Chardonnay buyers. The idea that “You can have these, but youjust can’t have that one” is a powerful selling technique.  The objective of the strategy here is to segment out a customer segment and either make them feel special, increase sales, or hopefully both.

Now is your time to weigh in. Are there any other examples of where you’ve seen allocations used effectively?

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