Tuesday, October 12, 2010

It’s What You Don’t Know That’ll Hurt Your Wine Business.

Brad Post:

Ask most winery owners how much they know about their customers and you’ll likely get the same response I frequently hear: “I know my customers pretty well”. Moreover, most winery owners also claim they know the preferences and kinds of experiences visitors have at their winery.

Or at least they think they do.

Blockbuster, the now defunct video store, once thought the same thing. All it took was one disgruntled customer, who later built another more responsive enterprise (i.e., NetFlix), to run the former video rental business into the ground and out of business.

Paying attention to our customers and understanding their experiences is crucial to keeping a business running effectively. We know our customers – or at least we think we do, but more accurately, we know our “regular” customers.

What do we know about those visitors who never return?

When I was living in Seattle and working at a marketing research company, as research analyst, a challenger to the prominent Seattle coffee giant asked us for help. This new coffee business surely understood the market, just like winery owners do, but they asked us to delve a little deeper and to help identify possible unmet needs.

They understood the business of coffee. They understood they didn’t know everything about their customers. They understood there was a possibility of an untapped market segment they might fill. They asked for research help because they weren’t market research experts.

Ultimately this new business challenger successfully invaded the market space formerly held by the coffee giant and has seized market share. Using qualitative and quantitative research methodologies we were able to uncover dissatisfied customers and key into a new, formerly untapped segment.

It’s what you don’t know that’ll hurt your business.

The danger of believing we know everything about our customers may be our biggest potential pitfall. In the winery business we do everything: we grow and harvest the grapes, run the fermentation operations, do our own bottling, and transport and sell our wines.

Focus on the Fundamentals of Wine.

Wineries should focus on winery related activities not on research. In the computer programming trade there is a maxim that goes like this: garbage in, garbage out. The same adage works for the research business: poorly designed research yields and questionable findings.

Professional researchers understand the complexities of conducting social research. Consumer behavior research requires a comprehensive set of tools that include qualitative methods: interviews, observation, and focus groups; and quantitative methods: survey research (mail or Internet), and even experimental designs (e.g., which communication program is most effective or which label design will sell more wine).

Building a long term research program to assess consumer satisfaction is fundamental to a winery business. Knowing what your customers love and sometimes more importantly, what your visitors do not love, can make the difference between success and failure.

Just ask Blockbuster.

1 comment:

  1. Great Story, I believe your philosophy is accurate, knowing your customer’s needs are important. Meeting customer’s needs could be challenging, moreover important to choose the things that will give the best in returns.