The concept of CRM – customer relationship management – is one that tends to get a lot of overuse in conversation… but underuse in actual execution.  In our industry, wineries and wine retailers are now beginning to focus more and more on selling direct to the consumer, and recognizing the need to manage the customer relationship. The need to manage customer information and data typically initiates the development or use of a CRM “system”, providing a database in which customer orders, service requests, and the like can be managed. And, typically, that CRM is silo’d in distinct purchasing channels; a POS system in the tasting room, an ecommerce platform, a call center management application. Unfortunately, the data typically captured in each of these is unique to its own discipline or need, which therefore makes the data pushed out from these systems just as unique. Customers are certainly able to interact with a brand across multiple channels – purchasing online, then calling customer service with an inquiry, and perhaps visiting a tasting room the next month – so by keeping the various platforms silo’d, we never get a true 360degree view of an individual customers’ behavior.

CRM is typically also considered solely a marketing concern – or it is used to describe the technology platform utilized by marketing to manage customer data. However when managed holistically within a company or for a brand, its application can and should provide critical input into sales & outreach efforts, customer service, product development and so much more.

So what is CRM?
CRM is the discipline of managing and nurturing a brands’ relationship with its customers. Applied effectively, it can assist in increasing profitability, reducing costs, and creating brand loyalty. CRM efforts can be designed to achieve a number of critical customer engagement goals:

• To acquire new customers
• To nurture current customers | move them “up the ladder” towards loyalty
• To retain current customers | maintain their loyalty
• To bring old customers back | recognize missed needs & encourage them to return
• Reduce the overall costs of all of the above
  

The discipline of CRM can be broken down into 5 basic steps:

Step 1: Strategy, implementation & adoption
This step involves the initial concepting for CRM strategies, the construction of technology solutions to support those strategies, the development of processes for executing CRM, “buy in” from both critical stakeholders and top management, and the commitment to an ongoing discipline of customer management. It's important at this step to define the list of questions you’d like to ask and customer behaviors that you'd like to better understand in order to improve your relationship.  By defining both of these in advance, you can then define the types of data you will need to capture.

For instance, if you want to know if customers are responding to certain marketing efforts you’re undertaking, it will be important to assign the marketing execution information to the customer record; Jim White received a direct mailer on July 2nd. He made a purchase through the website on July 8th, buying the product that was promoted in the mailer He called the contact center on July 10th and placed a second order of the item on promotion as a gift . Data fields critical to capture for the above scenario include: all customer information, shipping information (identifying a different recipient), marketing source code (the mailer), order information (what was purchased, at what price point/promotion, date/s purchased), and channels purchased through (contact center, ecommerce).

Step 2: Data Capture
It is at this critical step that most CRM efforts fail. And sadly, this is typically the step at which most wineries are stuck.  Knowing which data points to capture (per the above) is critical, but getting staff to ask customers where they heard about a promotion, or if they would like to provide an email address during a busy day can be a challenge. Establishing “buy in” and a discipline for data capture is mandatory. Some wineries are incentivizing their staff to capture complete data – pizza parties at the end of the day for meeting email name capture goals, bottles of wine for exceeding goals. Do you know where your data capture discipline stands?

• Consider your data capture rates – do you know what percent of your tasting room traffic is joining your email list? Or what percent of your contact center calls are being tracked by individual customer?
• Consider your existing data – how complete is it? Take a look at your email list. What information do you have about those customers – likely only the email address. Do you have first and last name? How about address – or a Zip Code to allow for geo-graphical targeting?

Step 3: Learn
At this step, the rubber hits the road. With the now complete information that you have captured, it’s time to start asking questions. Consistent evaluation and reporting on customer behavior across all channels, in response to all marketing initiatives, and through defined time frames will allow you to learn about both general and individual customer behaviors – and most importantly - respond to their needs and reward desired behaviors (step 4). Take a look at the regular reports that your teams are generating regarding customer behavior. What else could you ask. Is there cross over behavior between different purchasing channels? Are there improvements you can make?

Step 4: Apply
With robust customer behavior data and the knowledge of which behaviors you want to reward, smart marketers can now segment and target their customer in marketing initiatives and refine customer support strategies based on those identified behaviors; all the way down to the personalized level. In addition, by profiling  "best customers" or desired customer segments, you should now be able to inform and develop new products and programs to better meet the needs of customers. At this step, you can begin to test assumptions and new strategies, learn from the results, and refine your overall efforts.

Step 5: Predict
Another step which is often missed is the use of these customer and purchase behavior insights to find trends across demographic, psycho-graphic, geographic, purchasing (RFM) and other data profiling baselines. Once recognized, the information can be used to "predict" potential new customer profiles and behaviors and better inform the tasks necessary to bring those customers in; whether purchasing consumer lists, deciding which publications to use to reach your audience, identifying appropriate events to participate in, or simply to find new potential customers in your own database.  

The benefits to implementing a true CRM discipline are plenty

• Improved service, loyalty, and retention
• Higher sales productivity
• Increased market share
• Added cross-selling and up-selling opportunities
• Streamlined sales and marketing processes
• Increased call center efficiency
• Higher close rates
• Better profiling and targeting
• Reduced expenses
• Higher overall profitability

Wine Business Monthly recently published an article (July 2010) evaluating several of the available systems which wine suppliers are using to perform CRM strategies.  A consistent themes throughout the article – coming directly from those who are either responsible for their own CRM or for helping clients implement CRM - is the idea that CRM is a discipline – not just a set of software tools or basic marketing executions.  That said, however, there are several who provide CRM-based tools. While each of these providers may serve the basic needs of the winery direct marketplace in one form or another, as an industry overall there is still limited customer segmentation being done, limited reporting and sharing of information internally, and (perhaps most importantly) limited adoption of the critical CRM discipline throughout organizations

Opportunities abound!

So what can you, as a business seeking to create a deeper and more meaningful engagement with your customers, do? Here are a few starting points:

1)      Consider your customer management discipline. Take a look at your channel management processes. At the most basic level, I bet the opportunity exists to simply integrate all direct sales channel data (POS, ecommerce, wine clubs, call centers, etc.).  

2)      Review the data that you are actively or have potential to capture. Think ahead to the questions you’d like to ask about your customers. Does the data captured in your system/s allow you to find that answer? If not, how can you adapt your processes or systems to allow you to capture that information? Do you know what percent of your database is “actionable”? Meaning, is the data complete enough to use? For more information on keeping your data clean, see How Clean is Your Data.

3)      Monitor your data capture processes. Are staff members aware of the need or benefit to capturing complete information? Are they actively asking customers for complete information? Are they entering the data into the system/s on a timely basis? Monitor your customer information capture rates. At the most basic level, define what percent of your customers are joining your mailing list after visiting the tasting room and work with your team to increase that percentage!

4)      From a customer perspective – are you still mass marketing to both aquire and retain your customers? Try a few segmentations based on whatever parameters you currently have access to.  Monitor how they respond. Segment. Test. Apply. Repeat.

5)      How about your truly loyal customers. Do you know who they are? How much they spend per year? How much you might spend annually to retain them – or keep them interested and purchasing? How frequently they buy? What they buy?  

6)      And what about those customers in the second tier - what does their profile look like compared to your top tier? Are you spending more or less to retain this segment? What can you learn about your top tier of customers to inform strategies to move the second tier up?
 
For CRM to be truly effective, an organization must understand not only how CRM can benefit it, but also how its discipline must be adopted and championed throughout – not just within a marketing or technology department. 

According to a recent study by the CMO Council, 54% of loyalty & rewards program members are thinking of leaving their programs or even defecting from those brands altogether due to the barrage of irrelevant messages, low value rewards, and impersonal engagements they received from the programs (for a copy of the full report, visit here).

Wow! The programs which those brands set up specifically to create loyalty are actually causing the exact opposite behavior: defection? 

The study maintains that companies are using the programs to deliver general discounts, savings, and perks to an aggregated mass of loyalty program members, ignoring the actual insights into each individual customers’ behavior which could help provide more relevant, targeted and meaningful communications and drive to the ultimate goal: capturing both mind and wallet share.

The necessity and value of implementing a direct marketing discipline of data analytics to inform 1:1 communication and marketing opportunities in the exact type of program which begs for it (a “LOYALTY” program!) can’t be emphasized enough – or demonstrated more prominently than with these statistics.  

So what are those companies doing with their loyalty programs? Here’s a snapshot of how companies are actually using the data gathered. Bottom line is that only half of the brands leveraging loyalty and rewards programs are actually using the data to improve their sales, increase consumer brand affinity and create even deeper loyalties with their customers.  

Email is an effective means of communication with your customers, and one that – when managed appropriately – can help bring cost efficient and effective results. But there’s one element we don’t generally spend a lot of time on – and that’s the Subject Line.

The Subject Line is the introduction to your email that appears in the in-box of your email recipient, and – much like a billboard as you’re cruising down the highway – has about a 3 second chance of convincing the recipient to take action – specifically to Open the Email.

It’s worth paying attention to. Subject Lines represent one of those often-ignored marketing levers that can greatly influence ROI. We all do it: spend time, money and effort in the planning, designing, and manipulating of the body of an email marketing release, and then casually throw a Subject Line up during testing – the point when we’re reminded we need to add it.

In reality, your Subject Line can be as impactful as the body of the email. It’s important that you put some time and thought into the development of the Subject Line. Case in point:

• Use specific spam-filter unfriendly words and your message won’t be delivered.
• Use exclamation points and excessive capitalizations and your message will be ignored as spam, or even caught by spam-filters before it’s delivered.
• Use a Subject Line that has nothing to do with the content of your email – and risk confusing your audience – or worse yet, leaving them feeling deceived.
• Use a Subject Line that’s irrelevant or flat, and your message is ignored.

On the flip side, when used effectively, Subject Lines can have great impact on driving Open Rates up – your primary objective when setting a Subject Line. Some techniques to think about when setting yours:

• Be Direct – Tell your recipient what you want them to act on.
• Connect the Subject Line with the promotional messaging in the body of your email.
• Avoid capital letters (no SCREAMING!).
• Avoid excessive exclamations or punctuations.
• Keep number of words limited: Let your recipient see the full Subject Line in their in-box.
• It’s not mandatory that you include your brand name in the Subject Line. Consider and use appropriately.

Some examples that I’ve received recently which represent the above strategies:

• Great for Giving: Monogrammed Gifts (William-Sonoma)
• Last Chance – Only One Day Left to Save (Cellar 360)
• Gift Ideas for Wine Lovers (In Wine Country)
• 15% Off Personalized Wine Gifts - 4 Days Only (Windsor Vineyards)
• Just Arrived: Perfect Holiday White, 91 WS under 11 bucks (Wine Library)
• Free Shipping. Brilliant Gifts. (Crate and Barrel)
• Thoughtful Gifts for Everyone on Your List (Room & Board)

There are plenty of examples of what NOT to do.  In the interest of protecting the innocent, I’ll leave it to you to scan your own in-box and see what catches your eye. In the end, Subject Line development isn’t an art. It’s an easy – and necessary – consideration point in your Email Marketing strategy.

For some additional thoughts on this subject:

• Email Subject Lines: Do Symbols Hurt Email Marketing Response?
• Best Practices in Writing Email Subject Lines

The above was originally posted on the REThinkWine blog in 2008. Thanks to IBG for the repost rights..

The following was originally posted on the REThinkWine blog in Feb 2008. Thanks to IBG for the repost rights.

Found an interesting chart today on marketingcharts.com defining the top online retailers by conversion rate.  This chart shows the total percentage of visitors to a website who completed a transaction during their visit in the critical December timeperiod. All I can say is “Wow”. Check this out:

First, to refresh any memories, a website conversion rate is the percentage of visitors to a website who took a desired action – in this case, placed an order. So, from this info, it appears that nearly 30% of all visitors to thepopcornfactory.com placed an order in December! It should also be noted that retailers only qualified for evaluation in this list if they had a minimum of 500k page views in a month. That’s a lot of popcorn transacting across the web. 

Again, wow.

I’ve been in the direct, online business for many years now. I have certainly spent my share of time obsessing over my own conversion rates, and how to increase them. I’ve hired agencies to help. I’ve tested different variables to help encourage purchase. I’ve implemented multiple promotional strategies (Free Shipping! 50% off! Buy this NOW!). All paid off in different ways, and I’ve felt relatively successful with my efforts, but never to the tune of 30%!

I have a new personal goal.

So how do you improve your conversion rate?  And what is it that’s driving such high numbers for these sites? I think it’s a number of factors – all of which must play together truly move the needle. Here are my 5 suggestions to start you along the path of improving your conversion rate:

1) Know where you come from.
Do you know your own conversion rate? You better, if you want to improve it. Use Google Analytics or other analysis tools to define (and monitor) your conversion rate.

2) Grab a friend
Grab a friend who may be unfamiliar with the nuances of your website and ask them to help you ‘experience’ your website. I suggest you ask them to do two exercises. And don’t forget to watch the entire process. Literally, stand over them – and DO NOT coach them along!

1. Ask them to visit your homepage and experience your site. Don’t tell them to shop. Don’t tell them to read. Just see what they do. We’ve talked a lot with our clients about the importance of having an easy and intuitive navigational path for our clients (see an earlier post by Ben Chinn, our Director of Web Design & Development: http://blog.inertiabev.com/index.php/2006/10/09/site-structure-and-navigation/), as well as the importance of asking for what you want with headlines and ‘Calls-to-Action’ on the part of the visitor. Both of these efforts can have the desired effect of leading your visitor through your website – ideally to YOUR desired end. Did your friend follow your desired path throughout your website? Did they ‘see’ and act on the things you intend your visitors to? Or did they miss key messages entirely?
2. Ask your friend to visit your website now with the goal of purchasing a specific product. Start them at your homepage, and watch the path to purchase. Did they get lost? Struggle to find the right page that the product would be on? Did they find the product and the ‘buy now’ button with the minimal number of clicks? Ask them what information they would want to see in order to make that purchase (price, label, tasting notes, reviews). Did they find what they needed? Did it take a few minutes or many minutes, and a lot of ‘back button’ usage?

3) Resolve to Test and Measure
It’s ok to fail. Seriously. That’s what testing and optimizing is all about. Set a plan for what you want to achieve (in this case, higher conversion rates), list all of the potential tactics for reaching that goal, and get started. There are a number of things you can test: headlines, promotions, graphics/images, positioning of information on a webpage, the order of your navigational links, etc. For each tactic tested, watch “before and after” results. Did things improve or get worse? If they got worse, great! You learned what doesn’t resonate with your visitor. Another item off your list…

4) Take Baby Steps
Don’t throw out the baby with the bathwater. Just because your conversion rates may be lower than you like, and the shopping experience of your ‘friend’ was clunky, doesn’t mean your entire site needs to be overhauled. Commit to taking baby steps to learning about improvements in your conversion rates. Implement small changes at a time, and measure their impact. Learn what helps your visitor along to purchase and what doesn’t. And give yourself some time to learn. Commit to testing something over at least a week, if your visitor traffic is significant enough to give you ‘usable’ data. If it takes a month to get a real read on results, then give it a month.

5) Be Relevant and Meaningful
Your visitor is going to engage with you, and continue to engage with you if you provide something relevant and meaningful to their needs. Think about your own online shopping experience. When you need something and a site has it, that’s relevance. But when you make that relevant product or information entirely MEANINGFUL to them, you’ve now started a relationship. How do you make things meaningful?

• Watch how visitors move through your site. Which pages do they spend the most time on? This can give you an idea of the type of content your visitors are most interested in. Finding a lot of activity on your Recipe’s page? Put it up front! Make it easier to find your Recipe pages, add a link to this page from relevant product pages.
• Watch what visitors are purchasing. Likely the bulk of your sales are on products you’re well known for, have greatest distribution on, and/or highlight the most on your website. But if a sleepy Zin that’s getting no play on your homepage is actually selling fairly well, it’s telling you to give it some presence. Try it out. Suggest to visitors that this is a “Customer Favorite”, and post any reviews that you can get from your customers on that product.
• Don’t forget about your follow up marketing, as well: Email. Once you know what people are purchasing, and where they are going on your website, send emails that demonstrate this. I buy a lot of products on Amazon.com. And, at least once a month I receive an email suggesting other relevant products. This makes my experience with Amazon more meaningful to me. I buy. They suggest. I like that. 

What are you doing to stimulate conversion rates? Have you ‘experienced’ your website? Are you bringing something meaningful and relevant to your customers? Think of it this way: if your website was achieving a 15% conversion rate, what kind of sales would that translate to? Do the math. It's inspiring!

Again. Wow.

On the heels of a good telemarketing discussion in a recent WISE Academy session, as well as the blog we posted last week on tele-marketing, I had a chance to chat with Mark Parton, Founder & President of Call for Wine. For many small- to medium-sized wineries, the challenge isn't in having a good product to sell, or in having a good story to tell; it's in having enough TIME to make the connections with your customers and build a strong and trusting relationship. Call for Wine provides a solution for helping build those critical relationships through telephone outreach and conversation.

Customers joined your mailing list because they are interested in learning more about your brand or products; they agreed to make a connection, or initiate a relationship. Telemarketing is a great way to nurture that relationship and help provide customers with the connection they're seeking. I enjoyed my conversation with Mark and thought it may be beneficial for others to learn a little about them, as well.

WHO'S CALL FOR WINE?

An outbound tele-marketing firm specifically for the wine industry. They've been in business for over 6 years, with 2 call center locations (Northern CA and AZ), and 45 “seats” -- or staffers -- actively calling on behalf of winery clients. Primarily servicing wineries in the Northern CA area, they are helping several well-known wineries grow their direct businesses.

The CFW staff is trained and educated in wine; they run on-going internal training sessions, as well as invite winery clients to come into their offices and train the sales staff on the brands and products they’re helping bring to their customers.

WHAT DO THEY DO?

Outbound calling to customers on winery mailing lists
Call lists utilized are primarily purchasers from a winery’s wine club, tasting room, online or event participation lists. CFW does not conduct cold calling. They recommend calling customers no more than 2-3x per year, in order to help nurture - and not overwhelm - the winery's relationship with that customer.  They will only sell a winery’s wine to that winery’s customer list; no cross-list sharing between clients or cold calling is conducted.

Data hygiene
Cleaning up your customer contact list is critical. CFW helps by making the initial contact and confirming all phone, mailing and other information is correct. They de-dup lists for basic clean up and conduct NCOA processing, two standard data hygiene practices that many businesses overlook.

Data appending
In an initial customer outreach, CFW will ask for any missing email addresses or phone numbers to append to a winery's contact list; a valuable addition, as the cost to market online or by phone is considerably cheaper (and can be more valuable) than traditional direct mail outreach.

Outbound operational contacts
It's critical that wine club managers have up-to-date credit card information for all customers prior to running a club batch. CFW will contact customers with expired or declined credit cards and return updated and valid information for 40-60% of an invalid contact list. 

WHAT ELSE DO THEY DO?

Uncover new sales opportunities for clients
By learning from their outreach and customer conversations, CFW is able to suggest to clients new and potentially effective campaigns that will help service their customers and sell more wine.

Work directly with service providers like AMS, Nexternal and eWinery to update winery customer and order information directly into a winery's existing database; critical for real-time customer views and consistency of data.

WHAT RESULTS DO WINERY'S TYPICALLY SEE?

The chart on the right shows average statistics for CFW clients in 2009.

For more information on Call for Wine, visit their website at www.callforwine.com or call Mark Parton at 800.946.3705.