Do you know where your DTC growth comes from? There are five main areas to consider. Those channels include tasting room, club(s), web/eCommerce, telesales, and events. Are you really looking at the numbers, setting goals, developing strategies to meet those goals and have determined key performance indicators for your winery or distillery? If you have answered no or not really, then perhaps reading further will help you better assess how best to set-up your craft beverage business for success.
For those wineries and distilleries that have a tasting room, many would agree that most of the winery DTC revenues are generated from the tasting room. Club sign-ups are usually initiated in the tasting room and at events held on or off-site. Events at the winery also generate revenues but again the initial point of contact is the tasting room. In general, the tasting room is the main channel for DTC revenue dollars. According to the WBM “two-thirds of DTC sales flow through the tasting rooms.”
Once staff have signed up visitors in the tasting room to join the club, the club channel is the next main producer of DTC revenues. Club billings can give the craft business a boost during a time of year that is slower than high season and offers a new release sampling to folks that are already fans of your brand. Often the club billing, whether monthly, quarterly, etc. can supersede the tasting room revenues in that same period. For smaller craft beverage businesses club is often the leader in revenues some months during the fiscal year.
While telesales data was not really discussed much in articles reviewed for writing this piece, the old technology is new again and very much a part of new DTC business these days. Some wineries outsource tele-sales. Whether you conduct telesales campaigns in-house or outsource them, there are some wineries that report telesales have become the largest driver of new DTC business, (C. Penn, WBM, May 2011).
Online, web or eCommerce as its known while important is not the main driver of new DTC revenues. There is a limited number of people who will seek out a wine online and buy without any winery visit. Usually eCommerce sales are driven by wineries who send offers to customers already familiar with the winery or distillery and have tasted the product. In an article from Wine-Searcher News & Features, an Oregon winery executive said she noted online sales at 3% while tasting room sales were 20% in the same period. In the same article Judd Wallenbrock, President and CEO of C. Mondavi & Family, explains that currently online cart sales account for just 5% of the total DTC revenues, the majority coming from wine club and tasting room sales. Nevertheless, Wallenbrock and others all agree that the online channel will become more important in the future; and is already important to micro craft beverage businesses with limited distribution.
Knowing where your DTC growth comes from can help you plan to maximize your ROI. Look at your revenue numbers in each channel to see where you are currently. Then you can set reachable goals, note your key performance indicators, create dashboards to measure and display results. This helps you evaluate how well your goals are being met based on the KPI’s. From this point you can change strategies and processes as needed to improve performance. Always assess the KPI’s to see if they still align with goals so you can adjust them as needed.
Since most of your revenues come from the tasting room, make sure you have a strong POS system that can capture customer data. Having a complete system allows automation of tasks requiring less labor. Imagine having a sales system that allows you the ability to segment your lists (email, club, pos, events, telesales), sort through a data bank of 18,000 data points versus 65 data points, gives you dashboards to monitor your progress, and much more.
For more specifics now on Active and how Active’s All-In-One POS software sales system; and how to give your winery/distillery business a boost in efficiencies and an uptick on your bottom line (ROI), contact Thomas@activeclubsolutions.net to request a demo.
About Activ8 Commerce:
Activ8 Commerce, Inc. is a leading provider of DTC sales solutions (Mobile Winery POS, club software, ecommerce, website design). Our mission is to provide a single and comprehensive sales system for firms selling direct to the consumer. Activ8 Commerce has been providing DTC sales solutions to wineries, distilleries, and wine stores that seek to elevate sales and maximize service. Today the company has an entire suite of sales tools all in one single database. Activ8 Commerce’ commitment to developing and continually improving its sales software and service has made us a leading and well-respected partner and provider of direct sales software with a commitment to quality and customer success.
For more information, visit activeclubsolutions.net. To Request a Demo email Thomas@activeclubsolutions.net or call 1-877-441-2582 x. 52.