Does Social Media Payoff?

I came across a new study (July 2009) yesterday prepared by WetPaint and Altimeter entitled ENGAGEMENT:db. The study tracks and ranks the top most valuable brands and how they are engaging in social media.

The study included rankings in the  Retail, Leisure, Consumer Electronics and Products, Business Services, Food & Beverage, Financial, Apparel, Manufacturing, Auto, Media and Technology industries.

Specifically, they focused on the:

• Depth of engagement – How many channels and how many individuals in the company are engaged in Social Media (Starbucks got the top score of 127 engaging in 11 different channels.
• Engagement Profile – The study defined four profiles:

1. Mavens – Engaged in +7 channels w/above average activity (Starbucks and Dell in this category)
2. Butterflies – Engaged in +7 channels but with below average activity (American Express and Hyundai here)
3. Selectives – Engaged in 6 or less channels w/above average activity (H&M and Philips in this category)
4. Wallflowers – Engaged in 6 or less channels but below average activity (McDonalds and BP here)

• Financial Performance – Focusing on a financial correlation between those deeply engaged and those that outperform their peers.

The conclusi0n: Heavy engagement and focus on social media does pay off. The Mavens ended up on top and outperformed the other groups in revenue growth (18%) as well as gross (15%) and net margin growth (4%). As you might expect, the Butterflies came next, followed by the Selectives (although the higher activity kept this group closer to the numbers of the group above), and finally the Wallflowers fell in negative territory.

Although ranking the top 100 brands, the study provided additional insight into four brands including some best practices:

• Starbucks: Deputize people throughout the organization, Understand how each channel provides a different dimension of engagement, Central coordination, Find champions who can explain and mitigate risk
• Toyota: Be in it for the long haul, Pick channels carefully, Spread engagement to employees beyond the Social Media Team
• SAP: Open the platform to everyone and anyone, Encourage employees to tap into Social Media to get work done, Engage in new channels where people already are, Support engagement as an extension of the company culture
• Dell: Be conversational from the start, Make Social Media part of the job, just like email, Modularize and synchronize content across channels

Key Takeaways?

• Engagement via social media is important – and it can be quantified
• What’s in it for me? There does seem to be a correlation between social media engagement and financial performance metrics – revenue / profit
• Emphasize quality, not quantity – fresh relevant content and engagement is king
• To scale engagement, make social media everyone’s job
• Doing it all may not be for you, but do something - ignoring social media risks falling behind
• Find your sweet spot – better to be consistent in fewer channels.

OK … so how does this correlate to the wine industry? There aren’t many wineries with the size and resources of the companies listed above. In fact, many wineries may not even have a marketing person at all let alone a Social Media team available to engage as suggested by the study. Oftentimes the winemaker is also the farmer, owner, chief administrator, spokesperson, tasting room manager, and/or top sales person, not to mention various other potential assignments.

Does that mean there are no lessons to be learned or takeaways for wineries to think about? Not at all.

Manyof these best practises outlined above are already being used successfully by wineries. I can assure you that some of these are in play by the top 50 wineries on Facebook.

So what are the wineries doing:

• Seeking out current and prospective customers
• Engaging them based on their interests and concerns with relevant, consistent and timely content
• Building a dialogue with them in order to better understand and satisfy them
• Keeping the discussion on-going

Eagles Nest Winery of San Diego is  a prime example of a winery that understands the value of social media. Dennis Grimes is the winemaker as well as a blogger, a video producer, taster, and administrator of Eagles Nest’s own social network built on Ning. Eagles Nest has a fan page on Facebook and is the #1 winery on Twitter with over 6000 followers, and was recently featured on another blog – Best practices on Twitter: Wine industry.

Wineries may not be able to do things at the same scale, but the benefits are there and the opportunity is waiting.

I expect that over time there will be more and more evidence of the benefits (in revenue and profits) of engaging in social media and networking.

Preface:

Earlier this month I posted a blog entitled: Wineries using Facebook? You bet!

This was the result of research done on June 23rd and June 24th, 2009  regarding the over 500 wineries that have a presence on Facebook.  The data collected reflected observations and information readily available on the winery fan pages of  the top 50 winery pages.

The new survey below  provides some additional insights from the wineries themselves.

The survey request was sent  to each of the identified wineries shortly before the July 4th Holiday and was kept deliberately brief to encourage participation.

Although it would be optimal to have heard from all 50, I am very happy with the 28% response rate I received, particulary since I have no personal connection with these wineries, and so it was very gracious of them to take the time to respond to the survey.

So first let me say: THANK YOU! to all the wineries that responded. (One reason I love the wine business is because of the passion and sense of sharing I see from so many in this industry! )

Survey Results:

Note: In several instances percentages do not add up to 100 since multiple responses were possible.

When did you build your winery page on Facebook?

The two highest percentage categories (35.7%) either built their Facebook winery fan page less than 1 year ago or less than six months ago. Another 21.4% more than a year ago, and finally, 7.1% less than 3 months ago.

This is a very interesting piece of data in that the vast majority (+70%) of the respondents of the top 50 winery fan pages were built less than one year ago, suggesting relatively good acceleration in terms of building a fan base.

What activities were used by the winery to help publicize the new Facebook page?

 The top activity (71.4%) was through traditional email or newsletter. The next closest activities tying at 57.1% were the placement of a widget or similar on the winery website and messages sent to Facebook fans by winery employees who  have their own account on Facebook. Other activities included PPC on another website (7.1%), PPC on Facebook (7.1%), other (28.6%), and finally, no additional activity (7.1%).

How is the Facebook page supported?

The top answer (57.1%) indicated that a single person manages the page, but multiple people participate. In some cases, these might include shipping department personnel if a shipping question is asked, or a marketing person if there was a question regarding an event or offer.  28.6% assigned a single person with 14.2% having assigned multiple people. None of the respondents supported the page ad hoc.

Which applications on the page seem to be of most interest to your fans?

In the initial research I indicated the various applications implemented on winery Facebook pages (photos, videos, favorites, links, contests, etc.).  However, additional insight is needed in order to better understand the effectiveness of these applications.

 The top two activities scored the same at 64.3%. These included events and discussions of new offerings.

The other activities of most interest included photos at 57.1%, videos at 35.7%, favorites at 14.3%, and then lastly all at 7.7% – discussions on awards, discussions on methods or processes, and discussions on “green”  (wind/solar/water reclamation).

I do believe that a more thorough vetting needs to be done regarding applications and activities.

Perhaps another survey in the future?

Does your winery participate in or use other social media or networking sites?

92.9% of the respondents indicated that they do participate in or on other social media or networking sites. The remaining respondent indicated it would soon setup a presence on Twitter.

Of the 92.9% that do participate elsewhere, 84.6% do so on Twitter, 38.5% have a separate blog, 30.8% participate on Wine2.0, 23.1% on LinkedIn, and 23.1% on the Open Wine Consortium. 7.7% indicated participation elsewhere (MySpace, Flickr).

What benefits have you achieved from investing in a fan page on Facebook?

  Finally, the proverbial question that is often asked regarding whether it is worth the effort for a winery to invest in social media. The top answer at 71.4% was gaining a better understanding of and alignment with customers. Following fairly close behind at 64.3% was an increased interest from customers or prospective customers. The remaining responses were increased stories or acticles on the net (28.6%),  increased interest from retailers, distributors or importers (14.3%), incremental members in wine club or similar (14.3%), incremental sales (14.3%), identification of new business partners (7.1%), and finally, no benefit has been realized to date (7.1%).

Summary:

So …. what are some conclusions I may suggest as a result of the survey (in addition to those from the initial research)?

1. Social media investment can build results fairly quickly. Case in point, three quarters of the top 50 respondents have built the most fans after having setup the dialogue with their customers (i.e., built their Facebook fan page) less than one year ago. You noticed, I did not suggest a quick direct payback such as incremental sales. Social media does not by any means guarantee immediate or even short term increased sales revenue. However, increased connection and dialogue with customers is significant and beneficial.
2. In order to grow fans on the Facebook page, wineries have resorted to a mix of more traditional (email/newsletter) activities and relatively new social media (widgets on website) actions.
3. None of the respondents have left the building and maintenance of the page to chance. All have one or multiple people assigned, and most have assigned the job to one person to manage.
4. All use one or more applications to help engage their fans. In some cases the simplest and most obvious work the best (photos, events, discussions of new releases).
5. Over 90% have invested beyond Facebook (with over 80% also investing in Twitter)

Finally, all of the respondents have indicated that they feel the investment has a value, although a few have not been able to directly tie the benefit to the investment.

Now for some questions:

• Could a winery build a page and accelerate even faster using more non-traditional means? For instance, using more PPC on Facebook itself to attract new fans.
• Would discussions on “green”, biodynamics, or similar draw more interest if the winery is able to identify and seek out potential fans who have strong interests in these topics?
• Can a winery gain higher participation and integration with its actual location, website, and social media presence by focusing on more integration between the three? As an example, prominantly display its fan page at the tasting room on a system and encourage visitors to input their comments and impressions from the tasting / tasting room experience (to the fan page on Facebook), then posting scrolling updates to comments on the website?
• Have all of these wineries focused as highly as they could on setting social media goals and then measuring and adjusting in order to gain a better understanding of the costs and benefits of the activity? Have they fully leveraged the excitement and enthusiasm of their customers whenever possible through testamonials or similar?

There are many additional questions to be asked..and answered. I am hoping that over time and following  interaction and dialogue with wineries that have and will invest in social media, that I will be able to report more details in the future.

Lastly, again…

My sincere thanks to all the wineries that participated in the survey and congratulations to all that made the top 50!

In wikipedia, marketing differentiation ” is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market.

Further it suggests that “Differentiation is a source of competitive advantage…. Marketing or product differentiation is the process of describing the differences between products or services …. This is done in order to demonstrate the unique aspects of your product and create a sense of value. Marketing textbooks are firm on the point that any differentiation must be valued by buyers.”

I chose to use this particular definition because it touches upon almost all the salient points of why differentiation is so important to any business, and certainly no less important to those in the wine industry.

Reviewing the highlights above:

1. Differentiation allows your wine business to be more visible to a targeted audience of wine enthusiasts.
2. It provides competitive advantage when clearly defined and clearly communicated to that audience.
3. Competitive advantage is achieved because the differentiation conveys a sense of value that directly correlates with the values of your customers.

Differentiation has always been an important principle in regards to successful marketing. However, it takes on even greater leverage in the internet era of social media and networking. Why? Because of the critical need and ability to selectively target and connect with your current and/or prospective customers.

So what was missing in the definition?

The fact that differentiation is NOT relegated only to your product and service! In this age of social interaction, it can relate to the product or service (varietal, blend, wine club, tasting room), but it can also relate to many other things, such as background, gender, culture, production methods, beliefs, memberships,passions. even a target generation.

Case in point: I recently had a conversation with Galen Struwe, President of Desnous Imports LLC, whose website is Sacrebleuwine. Having established profiles and a presence on Facebook, LinkedIn, Twitter, MySpace, and YouTube, he gets the power of social media, and more importantly, he understands the importance of connecting with his target audience. Look at his webpage. He is selling fine wine from France. Do you see any pictures that relate to bottles of wine, grapes, or vineyards? No.

What you will see is a very conscious effort to connect with a specific target audience. Visit the site.  Click on the picture of Laetitia Bleger, Ms. France 2004. Hey .. we are talking about wine here! We are talking about a winery in Alsace where Ms. Bleger is adding a passion for wine to her resume.  

You will also notice a very visible area that offers visitors a chance to share the site and contents with their peers and friends. Is this differentiation? You bet.

 However, whatever differentiation you choose (and it can be more than one), it must be part of your overall marketing strategy and it must be genuine. 

Disingenuous differentiation will be spotted almost immediately, and will likely backfire badly in conjunction with social networking.

For more details on how to differentiate your winery with examples of those that are using differentation, check out this related article I just posted – “Wineries: Differentiate to Increase Business through Social Media”.

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Last evening I was fortunate to attend a tasting of Paso Robles wines from Four Vines and J. Dusi Wines in Sturbridge, Massachusetts. Bill Grant of Four Vines and Janelle Dusi (wine makers) presented their wines, provided some history and anecdotes about their wines and wineries, and generally interacted very well with an appreciative crowd (over 100 fans).

Four Vines / J Dusi Tasting

First to the wines. A total of 10 wines were tasted during the event including 9 from Four Vines and 1 from Dusi Wines (see list below). Much of the grapes were sourced from the vineyard itself and the surrounding area in Paso Robles, and the rest from other prime grape growing AVAs in California such as Dry Creek Valley and Russian River.

I can’t say this for every tasting I have been to, but for this one all of the wines tasted (with the exception of the Naked Chardonnay) were full bodied, complex, a virtual (no pun intended) pleasure. This is not to suggest the chardonnay was not well made. Rather, the chardonnay is one of Four Vine’s entry level offerings. It is a very good every day quaffer, but simply did not have the same kind of complexity as the other offerings.

My personal favorites included the Sophisticate, Anarchy, and a very different style but nonetheless very well made, abeit more femine style Zinfandel from J. Dusi Wines. The 2005 FV Zin Port was also really nice with a great balance of sweetness and alcohol, and a mouthfeel and finish that went on and on. Wiht that said, I can say that all of the wines are highly recommended!

Bill Grant & Janelle Dusi

Besides the tasting itself, both Bill and Janelle got the crowd going with anecdotes about making wines, winery costs, quality, wine storage,  and tidbits about the different varietals including of course Zinfandel, but also Syrah, Mourvedre, Petit Syrah, Tempranillo,
Malbec, and Petit Verdot (really enjoyed the Monachy as well, which is a blend of the last three and normally only available at the winery).

However, being a long time marketer I also wanted to take note of the great teamwork that went on to make this event a success. Keeping in mind the current recession, competition continues to be very keen for wineries around the world. There are neary 6,000 bonded wineries alone in the US all competing for shrinking dollars.

Bill Grant (left) & John Hannum

In order to standout in the crowd, wineries need to provide access to their wines so that avid wine consumers have a chance to try their wines and become loyal fans. That said, having worked in marketing for many years, I was very pleased to see such great cooperation between the wineries (Four Vines and J. Dusi Wines), the distributor (M.S. Walker), and the retailer (Yankee Spirits).

The adage of the evening was  “if you can’t get the people to the tasting room, get the tasting room to the people”. In this case, Yankee Spirits advertised the event to their mailing list, which consists of customers of their Sturbridge, Swansea and Attleboro locations. These locations are spread apart, about 2 hours between Swansea and Sturbridge and 1.5 hours from Attleboro to Sturbridge.

This distance would most likely have discouraged some of the participants from attending. However, Yankee Spirits tried something new last night: they offered to bus their customers free of charge from the other locations to Sturbridge. This was a win win for everyone – for the wineries, retailer and distributor it no doubt translated into incremental sales, and for the customers an evening to try some new wines and learn more about the industry.

Bravo to all those involved.

Now  .. for the Pièce de résistance !

There is a great deal of buzz today about social media and how wineries can take advantage of it to increase their visability, grow brand recognition, and increase sales. Here is an example of marrying smart traditional marketing and social media: the wineries, distributor and retailer setup and sponsored the event, and now I am taking that event and splashing it through my blog, Twitter, etc.

Social media and net working are not to be feared  .. it is simply another set of tools to help connect with your current and prospective customers.

All in all …. Great wine, Great grapes … and a Great tasting!

For more information, visit Four Vines and J. Dusi Wines.

List of wines tasted at event:

2008 Four Vines Naded Chardonnay
2007 Four Vines “Biker”
2007 Four vines “Sophisticate”
2006 Four Vines “Maverick”
2007 Four Vines “Anarchy”
2006 Four Vines “Loco
2007 Four Vines “Peasant”
2006 Four Vines “Monarchy”
2007 J. Dusi Zinfandel
2005 Four Vines Zin Port

The landscape of social media is anything but straightforward:

1. Social media continues to evolve and change not only each day, but sometimes hourly. Unlike the photo above, social media and networking is not “written in stone” or constant by any means. Social network sites, wikis, blogs and microblogs, and bookmarking sites appear, evolve and sometimes disappear overnight.

2. As suggested in #1 above, social media and networking refers to a large number of potential activities on the net. Here is a brief list of the possibilities:

Personal Social Network Sites: These are sites such as Facebook and LinkedIn where like individuals can connect either individually or through membership in one or more groups.

Focused (Wine) Social Network Sites: These are sites such as Adegga, Snooth, MustLovewine, Wine2.0 and many others whose members focus on wine in general. Here too there are groups within these sites that focus on specific aspects of wine such as tasting, varietals, distribution, etc.

Blogs and microblogs: Blogs are sites that “talk about” a particular subject (like ViralVines.com!. )In the case of wine it could be focused on value priced bottlings, varietals, wines from a particular region, winemaking, wine tasting, etc., or a combination of one or more of the above. Examples include Fermentation, ThinkWine, Dr. Vino, and many more. There are also microblog sites, the best known being Twitter, where in 140 characters or less a message (tweet) can be sent to 100 or 100o or 10000 followers multiple times a day.

 Media Sites: These  include sites for video upoad and review (YouTube, kyte), photos (zoomr, flickr), or audio (BlogTalkRadio, graperadio).

Wikis and White Label Social Networks: Wikis (pbwiki, wikipedia) are communities where users contribute directly to the site. White label Social Networks (Ning) allow anyone to build or start up a social network.

Collaborative tools: These are sites that support online collaboration including planning, calenders, and email such as Zoho, Zimbra, and Google (tools), as well as tools to support online events such as Webex, eventful, and zvents.

The key to successfully adding social media to your overall marketing is:

• ensure social media is not a separate activity; it needs to be an integral part of your overall marketing plan and activities
• understand (assess) where you are and what you expect from social media (set clear and measurable goals),
• understand the social media landscape – use tools such as mind mapping to help
• decide on how much or how little to invest in order to achieve the goals (where will you participate and how often),
• and then measure results.

Finally, you need to revise your activities based on your measurements. For instance, if you have decided to engage with multiple wine social networks and you realize through analysis that only two are providing the results you have set, you may want to drop activity on those that are not performing for you, and focus on only those two or investigate other potential sites.

There I go again … talkin up the grapes!

Assessment

Before stepping into the social media landscape, its important to do a self assessment. In order to be successful, the adoption of social media  should be well connected and integrated within the overall marketing plan and activity of the company.

You may feel some of the assessment is obvious. It may be. However, it never hurts to review goals and strategies. Times change, markets change, and personnel change.  Timely assessments help to get everyone up to speed and marching in the same direction.

Here are some things that should be part of your assessment:

1. What is your primary business mission, goal or objective? Yes.. I know it is to sell wine, but be specific: How much, though what channels, in what timeframe, etc.?

2. Do you have a presense currently on-line? Do you sell your wine online or is this site primarily an introduction to the winery and its wines? Do you make any special offers on this site? Do you list or promote events?

3. Describe your target audience. Yes, if  located in the  United States it includes those over 21. However, is it babyboomers? Millenials? Both? Others? This makes a difference in social media since specific targeting is not only possible, it is key. Your target audience will help determine where you will focus or not.

4. Are you currently engaged in social marketing? Are you or some of your employees active online? If yes, how experienced and knowledgeable are you? How much time are you currently devoting to social media?

5. If you or some of your employees are online, which social media and/or social wine  channels do you participate in? Why?

6. Why are you interested in focusing on social media/marketing? Is it primarily brand recognition? Direct sales? Driving more traffic to the tasting room? Reaching out to wine lovers that are also Green and/or organic supporters?

7. If you are active online, what is working well for you and what is not?

8. What are your competitors doing online? How has it impacted their business – for better or worse? If you are online, are you and how are you managing your reputation?

9. What are the results you expect from engaging in social media? How are you planning to measure these results?

10. What positive impact will your activity have on your current and/or prospective customers? This is your ‘giving back’. Again, social media is not about direct selling.  Its about dialogue and reaching out to current and prospective customers.

After the assessment … you’re ready to evaluate how to navigate the social media landscape. To be successful, you don’t have to play everywhere. In fact, you likely don’t want to play everywhere.  Like any other marketing activity you need to focus, test, measure, and adjust.

There I go .. talkin up the grapes again!

Whether a winery, wine retailer, wine broker or other wine industry organization, marketing is an essential part of your business.

You may not focus on anything and everything that might fall under the term of “marketing”, but be assured, if you have something to sell,  marketing is part of the business. For some it is a major part, for others more of an after thought, but for all a necessity to ensure sales and cash flow.

Social media (sometimes confused with or used interchangeably with Social Marketing) is simply another option at your disposal – another choice within your marketing options such as strategy, branding, and competitive analysis.  Ready to include social media in  your marketing plans?

If you have read some of the more recent white papers from Vintank or Silicon Valley Bank, you are likely thinking about this more seriously than you may have been in the past.

So if you are thinking of including social media as part of your overall marketing strategy, there are certainly a couple of aspects that you need to consider (there are more but these two I believe represent an initial review):

1) Approach

Traditional marketing is direct. Your messages whether in print, mail, advertising, or other, are focused directly on selling. Using social media requires a different approach. Here you are sharing and opening a dialogue with your current or prospective customers. The good news is that unlike some traditional marketing activities, you can be very targeted in reaching your audience. The bad news is that direct selling doesn’t work very well. In fact, it is counterproductive.

To illustrate, think of what goes on in your tasting room (an integral part of your marketing activity).  Here you are engaging current or prospective customers in some kind of dialogue. In some cases that dialogue entails discussion about the winery or the vineyard, in others about processing methods, and in others the wine itself. In some cases it may simply be the weather and how to get to the next winery. 

If the tasting room patron sees the dialogue as positive, it may lead to a direct sale then and there, or it may lead to a sale from a local retailer in the future. The main point is that the positive social aspect of the conversation predisposes this patron to continue to buy or to become a customer of the winery. Social media is simply the ability to have similar “conversations” with a like-minded targeted audience across the web.

2) Cost

There is good and bad news here. The good news is that for once this activity will not adversely effect cash on hand or cash flow. Social media activity is relatively low cost. The bad news is that although it is low cost in dollars (Euros, Pounds, etc.), it is high cost in time and attention. Social media is not a one time activity such as an advertising campaign or winery special offer. It is on going, frequent, and its success is highly dependent upon relevant and interesting content.

So… are you ready for social media? Stay tuned… the next blog will talk about self assessment and how to decide whether making the plunge makes sense, and if yes, how to manuever across the social media landscape.

  No, no !! Not that closet … the wine closet!

 I’ve been a wine enthusiast ever since my first taste of Chateauneuf  du Pape many, many years ago as an exchange student in Fribourg, Switzerland. One wife, two daughters, two English son-in-laws and two grandchildren (not to mention the dogs and cats) later – and about 30 years… I can finally focus on  my passion.. Wine!

I’ve been on the sidelines for a long time reading and responding to blogs and articles about wine, but never initating the discussion. Well .. here I am..ready or not:-).

The world of wine has a lot to offer and talk about. Why the fascination? As Paracelsus once said (some time in the sixteenth century), “wine is a food, a medicine, and a poison, it’s just a question of  dose”.

Wine has been with us for well more than a thousand years. Careful with the dose, I enjoy wine.. not because it might be good for you (although that ain’t bad!), but more because of what wine represents.  To me wine complements and enhances food and it challenges me  to evaluate its appearance, smell and taste. But well beyond that, it reminds me of what is embodied in this thing called “wine”, such as history, geography, climate, culture, language and many things more.

With that in mind, this wine blog will touch on multiple issues dealing with wine keeping in mind that some are very well covered elsewhere, thanks to many passionate wine bloggers – thanks guys (Oops .. and gals)! So tasting notes, sure – but this is not the main focus.

The main focus will  deal with issues currently facing the industry that make it difficult for it to continue to grow and prosper. As with any business, the wine industry must be competitive and profitable. Issues spanning access and distribution, taxes, brand visibility,  and cash flow, make it tough to survive never mind prosper. As the saying goes, it takes a large fortune to make a small fortune in the wine business.

And this is particularly important for small and medium sized wineries who have neither the scale nor budget to circumvent the many impediments placed before them.

So now you have it.

Hopefully .. not “just another wine blog”, but one that you’ll find interesting, sometimes controversial (of course.. that’s always fun!), and informative.

PLEASE .. let me know what you think. As the name implies (ViralVines) ..we’re here to talk about and promote wine. If you have a particular area that you would like to focus on, let me know …always open to suggestions and dialogue.

Here I go again…… talkin’ up the grapes!