No doubt there are financial pressures being in the wine business.
As a winery owner you have put out thousands, sometimes hundreds of thousands, of dollars getting your wines ready for sale.
Then you hire a marketer and expect sales to come. Seems reasonable, right? But the marketing person focuses on things like database growth, branding, distribution, social media, website design and other things that aren’t bringing sales in. What are they doing? You get frustrated. After a while you start to think a) this person doesn’t care about ROI and b) this person is showing a total lack of urgency or understanding for your cash flow needs.
Speaking for my peeps, allow me to provide a perspective on how sales and marketing differ, and how you need both for a healthy winery business.
Marketing is “the four P’s” – Price, Product, Packaging, Place. It is setting the foundation for your business. A smart marketing partner will ask about your cost of goods and competitive set to understand if you are priced appropriately in the marketplace. They will take things into account such as the history of your vineyard, winemaker, scores or style to ensure you’re positioned correctly in the right price-tier for success. They will do research about your varietals and competitive set to ensure your style of wine is going to resonate with a customer segment to ensure you’re not talking to yourself. Along with this is your brand considerations – how you are portrayed online, in the tasting room, or on the retail shelf – that is where the packaging comes in. Is your overall brand reflecting your wine style and price? Finally, they should look at your channels – are you a healthy mix of DTC and 3-tier for your style, price and brand? Or, should adjustments be made for the health of your business.
If you’re lucky, this marketer can then drive down into each channel and propose tactics that will meet the overall goals of the winery. Should you be working on growing your mailing list, or converting a list you already have? What other channels can be useful to you, such as outbound, email or social media?
This is how you build your business. That is ultimate goal of a marketer – to have a healthy business.
Sales are interested in, well, sales. They are usually provided incentive on volume (cases moved) and their ultimate goal is sales. A good sales person will hustle and get those sales anywhere they can, unless they are given more complex goals like margin or channel goals. Meaning, unless you direct them otherwise, a large discount sale at woot.com or pallet at Costco fits the bill.
Marketing takes longer, is more thoughtful, relies on data and adjustments. Sales is faster, but in many cases harder, work and is more relationship-based and relies on being at the right place at the right time and skills as a salesman.
Two very different animals.
Marketing starts with the 30,000 foot view, and drives down into channels, tactics and goals. Along the way, there may be key tools needed (e.g. a CRM system, a website, a database) that they need to research and create. At the end of the work, hopefully there are leads, or prospects being created.
Sales starts with these leads, and does everything possible to convert them to a purchase. They look at offers, portfolio mixes and targets to close their deals.
Neither Sales or Marketing will provide the complete picture for your winery. Marketing’s deficit is that they aren’t on the street, seeing accounts or consumers and don’t get the immediate feedback to the strategies. (Is the product priced correctly, for instance? Is the Wine Club message compelling?) Focus too much in this area as a winery, and you run the risk of cash flow issues. You may have a nice database set up and website, and gorgeous branding, but nobody is pounding the pavement or pouring wine for consumers.
Sales’ deficit is they are focused on the sale, and not necessarily the health of the business. So they need direction on the types of accounts or consumers are appropriate. Focus too much in this area and you are almost certainly going to hurt your brand by discounting, over or under pricing, or placing your wines in inappropriate channels just because there is a sale to be had.
But…. put these two together, and you have a strong team that is directing the brand, product and placement and someone else who can provide feedback and bring in the cash.
Depending where you are in your life-cycle, you’ll need more focus in one area or another. If you’re new to the wine business, Marketing is a great investment to ensure you’re on the right track. But at some point, you’ll want a sales channel – either a broker, distributor, tasting room or someone out there getting your wine in front of people who by.
When does that transition take place? Having set up several wineries from scratch at this point, I can advise to expect at least a year of set up. This includes permits, pricing, tool development (a database, email platform, website, tasting room). All the things you’ll need to be able to hit the ground running in sales.
While you can, of course, start sales from the second your first bottle comes off the line, it is sort of like spinning gold from straw to start selling without these tools in place. It is extremely hard. And slow.
At some point you’ll have the infrastructure in place and then a sales team comes into play. Look for professionals in either three tier sales or consumer sales that have prospect lists and relationships.
Then expect these two disciplines to talk, and frequently, to ensure your overall business is on the right track.