Grand Reopening: How Wineries Can Bounce Back From The Shutdown
The Coronavirus shutdown is like nothing we’ve experienced in our lifetime, and it has been devastating to the wine business. The shutdown has been especially hard on smaller wineries. Seventy-eight percent (78%) of an average winery’s revenue comes from the tasting room and wine-club sales (Silicon Valley Bank).
According to a Wine.com survey conducted in April midway through the shutdown, tasting room sales were down an average of 74.5%, and over 62% of wineries had slowed production. In fact, American wineries lost over $40 million in March alone and are expected to lose close to $6 billion on an annualized basis as a result of the pandemic and shutdown.
To compensate, small wineries, which account for 97% of all wineries, have had to be very inventive using curbside delivery, virtual tastings, home deliveries, reduced shipping costs, and special promotions to try to stay afloat. As Steve Saxton, founder and owner of Bravuro Cellars in Newberg, Oregon, said, “Thank God we have the wine club, but no visitors mean no new wine club members or tasting room sales.” Small winery operators expect it will take at least five months just to return to normal business in terms of traffic, employees, and sales. That’s a long time to live under the ‘new normal’.
That’s why kick-starting your winery’s ‘reopening’ is so important. Think of your reopening as a Grand Reopening. Here are five digital marketing strategies and tactics you can use now to bring back loyal visitors and get new ones while also setting up your winery up for success long term.
1. Don’t Cut Marketing or Advertising
It’s tempting to cut back or eliminate advertising and marketing all together after taking a big sales hit, laying off employees and taking pay cuts. However, numerous studies dating back to the 1960s consistently illustrate that businesses of all sizes that continue to invest in marketing and advertising in down markets not only enhance market share and brand preference during the downturn but also when things improve. Your competition is likely to cut or eliminate marketing and advertising, which means you shouldn’t.
Plus, in down markets advertising rates are cheaper. This is especially true in the digital space where small wineries live. Digital ad rates are already down 41% YoY (Wall Street Journal). This means you’ll get more ad impressions and exposure for your dollar, which helps your winery increase its share of voice and, market presence and potentially market share.
2. Prime the Digital Pump
Typically, wineries spend 3-6% of sales on marketing, and many industry experts recommend normally allocating approximately 60% of that to digital marketing. While you may not be able to increase the amount dedicated to marketing, allocate at least 80% of your marketing budget to digital during the Grand Reopening to get customers back and entice new ones. Why?
Unlike traditional marketing, digital (PPC, social, display, email, content, etc.) allows you to quickly target, test, learn, optimize and maximize the marketing and advertising tactics that drive the most traffic in the shortest period of time. This is especially important in the Grand Reopening phase when money’s tight and Return on Ad Spend (ROAS) and marketing ROI are crucial.
Also, digital, mobile, and social marketing allow you to engage with patrons on a personal level to enhance trial and loyalty and further enhance e-commerce sales. The sooner your winery stimulates sales, the faster it will grow again, and the sooner you can bring back employees, and return to profitability.
Allocate Upwards Of 80% To Digital Marketing to
Quickly Stimulate Sales During the Bounce-Back Period
3. Pay Attention to the Small Stuff
During the Grand Reopening phase, many potential winery visitors are going to be confused. They’re not going to know which wineries are open, which are still just doing home delivery or curbside pick-up, and what the hours are. By assuming otherwise could cost you sales. So continually inform your current, lapsed and new customers about your tasting room options, health and safety measures, and hours via updating your web site, app, Google My Business, email, social sites and even using paid social and display ads to drive home the details.
Here are other often overlooked digital tactics to make sure your digital footprint is prevalent, active, engaging and converting, all of which are especially important during the Grand Reopening:
- Make sure your website is mobile responsive; over 52% of all searches are mobile, and 61% of mobile searchers are more likely to contact a local business within one day if their site is mobile friendly (Junto, 2019)
- If not already doing so, make sure your winery is included in Google My Business to manage and enhance its online presence, including search and maps so customers can quickly find you, check your hours and reviews, and visit you.
- Continually check and update your site’s SEO and content in order to heighten organic search results. SEO is not a set it and forget sort of practice.
- Encourage and track Google, Yelp and Trip Advisor reviews. Over 67% of winery visitors check the reviews when they begin searching for new winery experiences (North Bay Business Journal).
- Conduct a web site technology and user experience (UX) audit to ensure the site is aligned with and propels the KPIs, CTAs, and tasks you want site visitors to accomplish on your site – from finding your location, to joining the wine club, to shopping for wines and e-commerce.
4. Search and Social Success
There are numerous digital tactics to build awareness, traffic and sales. But paid search (PPC/Google Ads) and paid social media advertising are often two of the quickest ways to stimulate sales.
Paid search campaigns can help wineries quickly enhance search share of voice, traffic and sales during the Grand Reopening phase. In fact, 90% of searchers haven’t made up their mind on a brand before starting a search (Status Labs). Thus, embarking upon or increasing geo-targeted paid search campaigns, and testing different campaigns, can literally help vault your winery to the top of search results to help your winery stand out to increase traffic and customer counts. In fact, 75% of searchers don’t go beyond the first page of search results (Junto), and most above-the-fold listings are now paid ad listings.
With regard to social media, organic posts on your Facebook and Instagram pages are a great way to connect, re-engage and quickly convert current customers with incentives and promotions – a key element in the Grand Reopening phase. Similarly, paid social campaigns are an excellent way to target and acquire new customers for relatively little money. According to a North Bay Business Journal survey among winery goers, 41% ranked social media as the place where they first learn about a new winery tasting experience. Additionally, 56% said that when they see information about an unfamiliar wine tasting experience in their social media newsfeed, they are “likely” or “very likely” to click on the post to get more information. And if you’re wanting to attract Millennials, 45% of Millennials expect more engaging experiences with brands, which points directly to social media (MGH/Total Retail).
5. Digital Marketing is No Longer DIY
In a relatively short period of time, we’ve gone from roughly 10 ways to communicate with customers (TV, radio, print, direct mail, telemarketing, etc.) to well over 50 (traditional + chat, webinars, social, web sites, paid search, apps, display ads, influencers, games, email, video, etc.). The breadth and depth of digital marketing has become so complex and data-driven that it has become very difficult to do it yourself.
For instance, Bravuro Cellars that sells only big, bold red wines in the heart of Oregon’s Pinot Noir country has such a unique niche that Instagram, SEO and paid search prove to be the best performing tactics. Conversely, a more conventional wine in a highly competitive space, such as Bogle, may rely on a broader mix of digital, including display ads, paid search, paid social, Yelp reviews, Trip Advisor and email incentives all working together to generate new tasting room customers and entice existing customers to return. No one size fits all.
Many wineries do their own digital marketing in-house to try to save money. In a strong economy, there’s so much business to go around that hit-and-miss digital practices often go unpunished. But not so in a down market when you have to make sure every marketing dollar works.
This Is No Time for A Learning Curve.
Digital Marketing Requires an Experienced, Integrated Team of Specialists.
Digital marketing requires an integrated team of specialists all working together to help achieve measurable KPIs and goals. Yes, there are plug-and-play winery templates. But beyond a website, light e-commerce and POS system, there’s a lot left to be desired when it comes to successfully strategizing and executing digital marketing to get people to the site and your winery.
It’s very expensive for small and mid-sized wineries to house and pay for the pool of talent and resources needed to be successful today. Salaries alone could easily top $200k for even a small team of mid-level digital marketers – SEO, paid search, content, social, web site/app design, analytics, etc. And this doesn’t even include the technology, hardware, software, and subscriber-service costs needed to successfully plan, implement and analyze digital, mobile and social marketing. This is no time for a learning curve when you need to increase sales now. Plus, you want to set yourself up for success and growth long-term, which requires on-going testing, learning and optimization of budget and message. You need an experienced, dedicated team to do this.
It is much more cost effective to hire an experienced digital marketing agency that knows the wine business and let them incur the overhead of the resources and talent vs. trying to do it in-house. Plus, because digital marketing, data and analytics go hand-in-hand, agency compensation can be partially based on achieving measurable results, which conserves cash flow and provides an added incentive for an agency to perform.
Done properly, digital marketing more than pays for itself with the ability to know that for every dollar spent an incremental dollar amount of revenue is generated, which is imperative in the Grand Reopening phase.
Most on-premise and direct-to-consumer wineries do have an advantage compared to a lot of businesses in the reopening phase. Most are located in scenic, tourist destinations that attract visitors who have been cooped up for months. But don’t rely on your local winery association or drive-by traffic to kick start sales and engage with new and old customers. Proactive digital marketing can help you leapfrog ahead rather than ‘waiting for things to get better.’ By then, it may be too late. Your friendly neighboring winery will have already beaten you to the punch.