What type of club works best for your winery?

By Ken Abbott, Woodinville Winery Services

The foundation of a winery is often the wine club. These are the customers that believe in the wine and love the winery. Most importantly, they are the customers that support the winery financially. Wineries could not do what they do without the support of a loyal customer base. The average winery realizes almost 25% of their sales through club or subscription customers. Some premium wineries can put that number as high as 80%. When setting up or maintaining a loyalty program, a choice needs to be made by the winery. Should you have a subscription or a wine club? There are important differences. Depending on what the winery goals are, the strategy of each should be considered.

Based on what is found on the internet, subscriptions and wine clubs seem to be synonymous. When looking up the options, you will see the terms used interchangeably, making the definitions a bit ambiguous. Wineries, curators, and non-producers all have versions of subscriptions or clubs that they have styled to their own liking. No matter what a winery chooses to do, they can format their loyalty program in a way that suits them best, which often leads to clubs taking on aspects of both versions of loyalty programs. Creativity and innovation can make a club more attractive, so the variety is great. However, for the purpose of what we are doing here, we will try to break the methods down to the basics so we can make the differences visible. Knowing the basics and the feel of each loyalty program helps us move in the direction that fits our goals. 

Subscription Wine Club

The movement over the last decade has been subscription clubs. These days, the typical consumer has an average of 4 club-type subscriptions for a variety of services or products. It is a very intuitive and low impact way for the customer to interact with the provider. It is a model that basically puts the control into the customer’s hands. Subscribers tend to be people who like variety and choice without a lot of extras. They are a group that likes to try things out and experiment. They enjoy the background stories, and the innovative ways wine can be made, but are not deeply connected. Members of these clubs, according to the data we have so far, typically do not have long tenure as a member. In most cases it is less than two years. 

Due either to the recent emergence of this option, or the preference of different 

age groups, subscription members also tend to be younger with the average sale being less. Sometimes, a subscription allows for wine discounts and sometimes they do not. Subscription programs can offer wines based on periodic shipping, but most are fluid and offer the member a way to buy wine over time that they choose. Their monthly fees are banked at the winery, until a time that the member wants to use the built-up credit towards wine. Many subscribers are customers introducing themselves to a new product or industry. Let’s define what a typical subscription to a winery entails. Despite the variety of descriptions, there are some basic characteristics:

· Billed monthly.

· Customer chooses wines.

· Customer chooses shipping times and methods.

· Can be entirely virtual.

· Usually are not event based.

· Subscription fees are banked toward credit at the winery.

· Do not offer exclusives on wines or events most of the time.

Traditional Wine Club

Most wineries are familiar with the traditional model for wine clubs. This model is controlled by the winery more than the customer. The typical member has a tenure longer than 2 years and for some wineries, the tenure can be decades. There are almost always discounts for the wine in exchange for the winery shipping or preparing periodic allotments either monthly, quarterly, or bi-annually. Members of these clubs tend to have higher than average lifetime value to the winery and are very connected to the brand. Wine clubs offer exclusivity and feel very special to the members. The majority of these members will visit the winery on occasion to partake in free tastings, special events, or private tastings for members. Wine clubs tend to have a few more restrictions but offer more of a personalized approach to the member. While some customers don’t like their wine chosen for them, it does allow the winery to plan for precise inventory depletion. This membership tends to be more of a relationship-based model. The basic tenets of the wine club can include the following:

· Winery chooses the wine.

· Winery chooses shipping considering the weather.

· Discounts are given on the wine.

· Club member is charged for the wine at the time of allotment.

· Special club events.

· Exclusive access to wines or pre-release wines.

· Most members will visit the winery in person.

· Free tastings to members who come into the tasting room.

· Personalized approach to the member.

There are advantages and disadvantages to both types of clubs. How you approach a club may tie into how you plan on marketing or modeling your customer service. The average price per bottle can also influence which club works for you. Most, but not all, subscriptions are for wines that have a lower price tag, while wine clubs tend to have a higher price tag. That does not mean that one or the other works better for a price range, but it could indicate which type of customer is trending towards each methodology. Many see the advantages of having two or more clubs. For example, a winery could offer a subscription club which might satisfy the early adopters or the wine curious, while also offering a wine club for the more devoted members. Also, keep in mind, these parameters are guides, not set rules, so you can customize whatever club you manage.

The important thing is that no matter which way you choose to go, you must support and administer the club in a way that will keep those club members coming back for more wine. Consistency in product, communication, methodology, timing, and more, are all extremely important to the club member. They want to know what to expect, and they want it to be easy to understand. Make sure you are responsive to the members, and plan for the customer service you will need to provide. If you want to grow your club, set it up in a winery specific software that will make it easier to grow and manage. Check out software systems like Orderport, which has a reputation for fantastic club management. Club members have a myriad of choices, and you want to make sure they choose you. Give them lots of reasons to choose your club.

If you would like services for managing or setting up your club, contact Woodinville Winery Services. We can evaluate your needs and administer a customized club management approach that works for you. Let us do the work for you.

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