Increase Tasting Room Conversion With One Simple Technique
What if I told you that our proven approach doesn’t cost you a single dollar, can be executed within five minutes of finishing this article, and can be put to the test with the next customer that walks through your doors. This is one of those rare times when it “isn’t too good to be true.”
Many wineries I consult with are focused on increasing tasting room foot traffic, but that requires lots of time, money, hard work and some luck to be successful. Beyond acquiring new customers, wineries should focus on the customers who are already walking through their doors and figure out how to increase the average spend per customer.
You can start by upselling your existing customers, but after a while you can only market to them so many times without losing effectiveness. Instead, I suggest you look at how many customers come for a tasting, but leave without purchasing and focus on converting them to new customers and eventually raving fans.
Data is key to your business and we cannot emphasize enough that you need to track your foot traffic and conversion with your POS system. The easiest way to do this is create SKUs for each tasting: a paid version, a “comp” version of that tasting, a club member tasting, an industry tasting, and finally a non-taster. If you cannot break down the last 100 tastings you hosted and put your “tasters” into one of these five buckets, then you are not collecting enough data.
The most important metric to track for this exercise is how many visitors pay tasting fees and do not buy wine. If it is less than 20% then your tasting room staff is full of all-stars! For wineries over 50%, you should step back and ask yourself why over half your visitors don’t buy your wine?
Large wineries that host visitors by the busload might claim that certain customers are “not buyers” anyway, so why fight a losing battle? Small wineries may suggest that visitors are more interested in the experience than in buying, which sometimes is true. However, by segmenting your foot traffic, you can drastically reduce the reasons why a customer does not buy your wine whether you are a small or large winery.
The easiest way to sell more wine in your tasting room today is to lower the number of bottles a customer needs to purchase to waive the tasting fee. There is no perfect number of bottles, but we suggest doing some math to determine your threshold. I put this practice in place at a large Napa winery and the success was instantaneous.
The entry level tasting fee was $20 and we lowered the waiving threshold to one bottle. The lowest price bottle on the tasting was $30 and the most expensive was $60. At the conclusion of the tasting, customers who loved the wine made a purchase anyway and usually bought multiple bottles. For those customers on the fence, we made the math so easy, that is was a no-brainer to buy wine.
The staff would tell the customer, “Look, the tasting is $20 and I know you enjoyed that $30 Sauvignon Blanc. You can certainly pay the tasting fee, but if you spend $10 more, you get an amazing bottle of wine to take home.” When the customer realized that the $20 was a sunk cost and therefore the bottle was only an extra $10, the purchase was practically guaranteed.
The $30 bottle was the lowest hanging fruit, but for the customers that fell in love with the $60 Cabernet Sauvignon, the pitch was, “You already have $20 towards that Cabernet you loved. You can pay the tasting fee, but you might as well take home a bottle of wine you know you will enjoy.”
Tasting fees can generate a great source of revenue and profitability, but no winery can financially survive on tasting fees alone. The point of the business is to sell wine and capture customers. Wineries have two choices, let someone walk out the door having only paid a tasting fee, or loose a bit of margin on your bottle, but acquire a customer. Odds are, they will take that bottle of wine home and share it with friends while recounting the great experience they had in your tasting room. This type of customer is much more likely to buy your wine at retail if you distribute, or visit your website a place a follow up order. Chalk up the lost margin to “marketing” and rest assured that you have a new fan in the making.
I have been preaching this technique for years and have had push back from many saying they cannot afford to give away the tasting with a one bottle purchase. That is very true for small wineries that offer personalized multi-hour tasting. However, reconsider your threshold and experiment for a month in your tasting room. Instead of the typical six bottle purchase to waive a fee in high-end tasting rooms, try only three bottles.
Experiment with raising your tasting fee and lowering your waiving threshold. Ideally, your tasting fee should be at least 50% of the cost of your lowest price bottle. If so, it becomes a no- brainer for customers to purchase a couple bottles of wine while you waive the fee.
Remember, a $10 profit margin on a bottle of wine is much more valuable than a $20 profit margin on a tasting fee for a customer you will never see again. Acquire the customer, get their contact info, then focus on creating a customer journey that turns them into raving fans.
We invite you all to commit to this experiment for the next 30 days and share your results with us. Let us know how it goes or reach out to discuss this strategy further by emailing me at simon@hwy29creative.com.
Simon Solis-Cohen is the founder of Highway 29 Creative, a leading digital and creative agency serving the wine industry. He challenges clients to think about the future and constantly innovate. The agency chases data, not fads, and provides one-stop shopping for wineries looking to enter or jolt their direct to consumer sales. Their approach starts by designing and building a website focused on conversion (wine sales, club sign ups & tasting room reservations) and then dives into each digital channel with consistent and effective content and messaging. What to learn more or looking for advice? Shoot Simon a message at simon@hwy29creative.com.