The Marketing-Hospitality Gap

And the data behind it

A couple of weeks ago, I wrote about what the wine industry gets wrong about hospitality, and one of the things I mentioned was the gap between marketing and hospitality.

Commerce 7 (a leading wine industry software provider) recently released a report analyzing their direct-to-consumer (DTC) sales data. And that report backs up everything I said.

Fifty-five percent of DTC transactions occur at the point-of-sale, AKA the tasting room. These transactions account for over 36% of all direct-to-consumer revenue – second only to wine club channels at almost 39%. And even more importantly these transactions account for nearly 50% of all new customer acquisitions.

But here’s the disconnect: more than 54% of these transactions are processed as guest transactions and no customer date is being captured.

I completely understand how it happens — particularly on a busy Saturday — a poorly trained host is trying to processes a transaction quickly and it’s easier to just select the right bottles from a list and run a credit card. Hell, some customers even get annoyed or frustrated when you ask for identifying information such as an email address. And again, I understand, no one wants to give out their personal information when most everyday transactions don’t require it. But then again we don’t think twice about loyalty programs or showing our Amazon Prime code to receive that extra discount at Whole Foods.

The issue in the tasting room is also compounded by technological limitations — the lack of a keyboard, trying to enter information on a tablet while standing, slow wifi, etc. And again there’s that pressure to make the guest experience as seamless and as welcoming as possible.

But the data also shows that the tasting room is the best top-of-funnel tool for building relationships with customers. Approximately 14% of guests return to the tasting room within the first year. And almost a full 10% of guests go on to make an additional ecommerce purchase within the first 30 days.

I’m going to pause here for just a second to let those stats sink in…..

And what this really means is that NOW is indeed the time to strike.

And you cannot start building a relationship without first capturing data. Wineries need to start reaching out within that 30 day window.

But again, most wineries aren’t investing in properly training their tasting room teams. They invest in sales coaching and focus on the short-term strategy of driving the day-of bottle and wine club sales. But these coaching programs miss the critical data side of the equation, and most importantly, they don’t help people understand the WHY.

This is where holistic strategic evaluation — like I offer to my clients — can ultimately help with long-term business gains. And you need the coaching to go with it.

You cannot ask your tasting room staff to focus on data capture without helping them understand why it is important and without properly incentivizing them to do so.

The second element is, of course, giving your hosts the tools, training, and time to properly execute. It’s not just new iPads or wireless keyboards but also making sure staff know how to use them.

It might sound basic but computer literacy and typing classes or software trainings can make a huge difference. I’ve seen firsthand how these investments can not only help hosts perform better but also elevate the guest experience.

And just to take it one step further, there are often real bottom-line costs associated with improper use of Point-of-Sale software or devices. The higher transaction fees associated with a card-not-present transaction vs a real-time transaction are not insignificant. Let alone accounting for the additional staffing hours and costs required to process transactions at a later time.

None of this is insurmountable. But it does require someone stepping back and looking at the full picture — not just the day-of bottle sale, but the guest who walks out the door and never hears from you again.

That guest? They were 10% away from becoming an e-commerce customer. They were 14% away from coming back. You just needed to get their email.

Start there. Build from there. And if you need a thought partner to help figure out the rest, I'd love to talk.