Why engaging with consumers is key

I receive a plethora of  studies from companies claiming to have the newest, latest and greatest information when it comes to consumer research and social media.   There are two studies that really grabbed my attention.   I wanted to share that  information with you.  

Chadwick Martin Bailey and iModerate Research Technologies released a study on “Why Social Media Matters.”    The study included statistics from Facebook and Twitter on the increase in social media usage.  The numbers are staggering.   There are more than 400 million active users on Facebook.  More than 20 million people become fans of Facebook pages every day.  Twitter is seeing 50 million tweets per day.  The study also found that 51% of Facebook fans and 67% of Twitter followers are more likely to purchase from the brands they follow.   

 Ogilvy Chicago and Communispace Corporation also released a study called “Eyes Wide Open, Wallet Half Shut” on the post recession consciousness.  What piqued my curiosity was how the consumer “circle of trust has shrunk to include that which is close, tangible and personal”.  Consumers are more active, deliberate and complex than before. They are doing more research, reading more labels, comparison shopping and talking with their peers before making purchases. 

Josh Mendelsohn, VP at Chadwick Martin Bailey states,  “Companies not actively engaging are missing a huge opportunity and are saying something to consumers – intentionally or unintentionally – about how they are willing to engage on consumer’s terms.”   I agree with that statement. 

Brand affinity is now being determined more by what consumers are saying than by what companies are saying.  Allowing consumers to take the lead in the conversation about your brand is a major shift in corporate marketing strategy,  however, it sends a very clear message to your consumers.  It says “we value you, your opinions and your input.”     The  companies willing to make this shift and create a personal relationship with consumers will reap the benefits with increased fan page growth and retention, peer referrals and most importantly, sales.

A thought from the consumer side of the tasting experience

At the beginning of the year, I sifted through numerous packets of information from webinars, conferences, blogs and reports to see what everyone was predicting for 2010.   A fair amount was grim news from distributors and on-premise accounts, but the glimmers of hope came from the consumer direct sales channel and the marked increase in social media usage.   Our company has long recommended social media and the consumer direct sales channel so this did not come as any surprise to us.

Catalyst also looks at marketing from a consumer’s perspective, because we are ultimately consumers.   We go to a lot of wine tasting events, both large and small, to see (and hear) what’s going on.   As a fellow consumer, let me give you my perspective on a somewhat disturbing trend I’ve noticed this year.

At each tasting, when I found a wine I really like, I indicated how much I enjoyed it and asked a few more leading questions like “what’s the price point, where can I purchase this”.  In each case, my questions were answered but what surprised me was how few people asked me if would I like to join the mailing list or become a “friend” of the winery, even when the mailing list was sitting on the table in full view.

For a long time, wineries thought once consumers tasted the wine, the wine would sell itself.  That’s true to a certain extent, but now, customers want more.  We want to be part of a community; we want to interact with other like-minded consumers.  In today’s market, inviting a customer to join your community is just as important as the tasting experience itself.   If you don’t offer a complete customer experience, we will go to your competitor to find it.

Even though  the mailing list sign up sheet is sitting in full view, don’t assume because it’s there, everyone will sign up.  Ask us to join the mailing list, invite us into your community. You’ll be pleasantly surprised by the reaction.  You’ll probably even get a sale.  Hmmm…. make the wine and then sell wine by creating a relationship with the customer.  Now that’s a complete customer experience!

Timely Reflections

Three years ago, I broke a wine glass in my hand and damaged the nerve in my right thumb.   After three years of procrastination, I finally made the decision to get it repaired.   Two days before Thanksgiving I had some surgery.   I thought I was going to get  a few stitches and a band-aid,  but instead I came out with a right arm bandaged half way down to my elbow.  OK, time for plan B…

Being right-handed, I realized recovery was going to present a few challenges that weren’t on my “to do” list.  I had to either figure out new ways of doing things or ask for help.  During the last month, I did a fair amount of both.   For the first time in over 40 years of sitting at the “grown up”  table,  I had to ask somebody to cut my meat on Thanksgiving.   A mascara wand in my left hand became a weapon of mass destruction.   My neighbor came to my rescue when I needed help opening a can a soup.   Friends who brought me dinner got added to my BFF list.     When I tried to go back to work too soon, I listened when a  girlfriend told me I wasn’t ready yet.

In a way, the last month was a reflection on what’s been happening in the wine industry.  This year presented challenges that weren’t in anyone’s plan B, C, or D.  Whether those challenges were large or small, we all had to figure out different ways of  doing things or  be willing to ask for and receive help when we needed it.   Whatever  your circumstances were,  I hope you too,  found the solution that worked best for you.  I also hope you found some humor in those  moments and used it as a launching pad for recovery, both literally and figuratively.

I am grateful for the support of my friends, neighbors and business partners who were there when I needed them.    Even though that  scar will  remind me of  that stupid wine glass, I  also like to think that  same scar will  remind me of the abundance in my life as well.

Wishing  you and your families a Happy Holidays!

Are you keeping up with the changing consumer?

A recently released Social Media Study by Cone, Inc. along with a white paper from demographics expert Peter Francese called “2010 America” provide definitive information on the changing face of the American consumer, how they develop relationships with brands and the importance of social media in the consumer equation.   Here are a few highlights from both articles. 

In his white paper, Peter Francese states,  the average American has been replaced by a complex, multidimensional society.   According to Mr. Francese’s projections, the most prevalent types of US households are married couples without children followed closely by single person households.  Minorities are the new majority.  Mr. Francese also states that in 2010 Hispanics will be both the nation’s fastest growing and largest minority with 50 million people.  In the California and Texas, white non-Hispanics are the new minority. 

The Social Media Study from Cone, Inc. states that 60% of Americans use social media and of those, 59% interact with companies on social media sites.  Mike Hollywood of Cone says American consumers are eager to deepen their brand relationships through social media.  They view social media as a welcome channel for discussion rather than an intrusion.   Over 90% of social media users in the study believe a company should have a presence in social media.

 Understanding who your customer is and how they  develop relationships with brands is key to building a better connection  with your customer.  Creating a conversation directly with your customers through social  media is equally important to  building a stronger future for your company.

Something to think about

OK, so here’s our first thought to challenge your way of thinking.  When was the last time you thought about your customer’s experience of your product?

Most of the time customers tell us what they want by their actions.  They either purchase or they don’t.  Sometimes they want, or need, to be convinced about what your product will do for them.  We respond to so many product experiences on a daily basis we forget about what makes us respond in the first place.  Does product X satiate some level of curiosity or delight, provide a sense of community or just plain satisfy a desire?

Through the ability to interact with producers, customers and the quality of customer service are driving the revenue stream more than ever.  What customers say about your brand matters more than what you write about it.  Further, what your product or experience does for them matters most all.

When was the last time your customers shared their product experience with someone else?  If it’s been awhile, then it’s time to ask yourself the following question.  Are you giving your customers everything they need to share their experience with others?

Thoughts and observations from the Family Winemakers Event

Last weekend I had a chance to talk with quite a few vintners at the Family Winemakers event. There were a few things that were consistent in my conversations and tasting experiences.

Before diving into the real discussion I would like to say that the quality of wine continues to get better and better and the wine consumer part of me thanks you all.

Universally in my conversations, everyone agreed the current distribution model isn’t working. Occasionally a winery would mention a single distributor that was doing ok, but the same name never came up twice. The winemakers all lamented that they don’t have a solution so they continue to look for more and better distributors that don’t exist.

Everyone is talking about a social or online strategy but most don’t know what that means or what it will take to be successful. One owner said their strategy consisted of having their winemaker tweet –once- per –month-, not much of a recipe for success. Another common thread was the desire to have their wines placed in high-end restaurants in the East Coast and other primary markets. Well folks, that market is dormant. Ask any restaurateur; less people are going out, more folks are staying at home, and when they do go out they are buying less expensive wine. Ask any of the major producers why they are discounting their wines by up to 50% and they will tell you it’s because demand died a year ago.

The final commonality I observed was that each winery could only name a few geographic locations that were doing well for them. Once a particular area was covered, with a respectable distributor, pocket of club members, or particularly active small cluster of restaurants, they wanted to branch out into other markets. It’s certainly time to rethink that plan given today’s market conditions. There is one adage that works no matter the market or product, “It’s easier to sell more to existing customers than it is to acquire new customers”. Our suggestion is to fFocus on “owning” a specific market or geographic region by building deeper relationships with your existing customers. This will provide better returns than trying a broader but shallower approach.

I’m not saying don’t pursue other customers and markets, but by utilizing your existing customer/trade relations, you can leverage your strengths and get deeper into markets where you already have success. Build your best club members into brand evangelists, spend more time with a proven distributor or retail outlet. And nothing speaks louder than an existing customer sharing their experience with other potential customers, retailers and restaurants. Help them share it loudly and often through your newsletters, online communities, dinners, etc. Your best customers, retail outlets and distributors can’t be treated well enough.

Welcome!

Welcome to the first post of  Catalyst Wine Blog!  Our objective is to create a conversation around the intersecting worlds of wine and technology.  We’re going to be looking at marketing ideas from a consumer’s perspective and presenting  innovative  thoughts on how to increase a wine brand’s visibility and revenue during some rather challenging economic times.

Wine is all about sharing.  On behalf of Andrew, Chip and myself, we openly invite you to share your thoughts with us.   After all, we’re all in this together.

Cheers,

Janet Majors

Managing Partner