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Nearly all brands in all industries use incentives, such as discounts and rewards, to entice customers. But, sales incentives are not a one size fits all tactic. When used correctly, they can increase your profits and build customer loyalty. But deployed carelessly, you may see no effect or even lose money. So, how can they be used in your wine business to get the greatest effect? 

 

This article brings together several strands of research and offers guidance on developing a program specifically for wine consultants. The article doesn’t provide you with a one size fits all program. Only you can create the right program that suits your specific wine offerings and your specific group of tasters. However, this article provides guidelines to help you build a program that will work for you. And, it shows you how to put them together into a program.

New Versus Established Wine Drinkers

This study at this link compared states where wine discounts were banned and states where there wasn’t a ban. They found no difference in wine sales between these states. In other words, established wine consumers will purchase wine without discounts. The tasters that buy from you now don’t need discounts to buy. It’s also likely the case that customers that are new to you, but that are already established wine drinkers, don’t really need discounts either. 

 

People’s primary motivation for drinking wine is enjoyment, according to the study at this link. Wine drinkers enjoy the variety of experiences wine offers. The taste, its effects, and the novelty of tasting new wines are all important to them. This is true for wine tasters of all types and all levels of interest. But, it’s especially true of established wine drinkers. 

 

Enthusiasts aren’t your best target for discount-based incentives. Rather than offering established wine drinkers (the buyer type we normally call Enthusiasts) price reductions, reward them with ways to increase their enjoyment first. If you can find ways to do this consistently and over time, they will reward you with their loyalty.

 

For folks without an established pattern of wine consumption (the buyer type similar to what we call Newly Engaged), however, a discount might just help. Research suggests that most people (80%) will try a new brand if offered the right discount. This is a way to encourage inconsistent wine buyers into their first transaction with you. 

Sell to Your Tasters More Often

As was mentioned, all wine drinkers consume wine to enjoy it, first and foremost. Marketing research suggests that consuming discounted wine a long time after you purchased it decreases enjoyment. On the other hand, drinking a discounted wine closer to the time you paid for it will increase enjoyment. What does this mean for your business?

Your discounted or otherwise incentivized wines should be #EverydayWineGems. These should be wines that your tasters will drink soon after they purchase them, not wines they want to save. The wines should still match their palate type. They should still be exceptional, but they should be lighter or younger versions of their preferred type.

Younger and lighter wines generally cost less to produce and are priced less expensively. Both Enthusiasts and the Newly Engaged will feel comfortable opening this kind of bottle on a regular evening rather than saving it. And you should market these wines to your tasters in this way. 

For both buyer types considered here, you want them to get used to paying you as frequently as possible. This article suggests that people consume more of items they pay for frequently. As an example, people that buy monthly memberships at the gym use the gym more than people that buy annual memberships. The payment is the trigger that reminds them to get their money’s worth. 

If your tasters buy from you monthly, even weekly, they will drink wine more often than if they buy from you quarterly or annually. Since you want your drinkers to buy more from you, design your programs with as small an amount of time between transactions as possible. Also, avoid pre-sales, season passes, and other discount schemes with long time gaps. 

 Discounts and Rewards

 

So far, we know that Engaged Newcomers might be swayed by a discount. We also know that rewards are likely to work better for Enthusiasts. The question then, is, how should you structure these incentives for each group?

 

Let’s start with discounts for the Newly Engaged. Discounts usually take two forms: a percent off and a dollar amount off. You should choose the form with the highest perceived value. That’s usually the offer with the biggest number attached. So, a 15% discount would be considered a better deal than $14 off.

 

The amount of the discount doesn’t have to be large. The discount is just one incentive to help get a transaction from this new customer. You’re combining this discount incentive with the timing incentive as well as the enjoyment incentive. 

More concretely, you are giving the Engaged Newcomer a wine that represents the next step in their wine journey. This is one of the primary reasons Engaged Newcomers taste, is to expand their understanding of wine. That they are expanding their wine knowledge will add to their enjoyment of the wine. 

 

You have paired them with #EveryDayWineGems that they’ll consume soon. This increases their enjoyment of the wine too. The payment trigger will be fresh in their minds, and so it will help them feel they are getting their money’s worth. 

 

The discount will be combined with these other incentives. It is the final push to get the transaction from this new customer. 

 

Discounts will be less of an incentive for Enthusiasts. They are already buying wine and will continue to do so. But payment timing and enjoyment still matter for these tasters. You want your loyalty program for Enthusiasts to involve a transaction as frequently as possible. 

 

To increase the enjoyment of Enthusiasts, provide them a way to access novel wines. As an example, you could hold “members’ only” tastings of your more unique wines that only loyalty program members can attend. This can even be tiered, wherein the more you buy, the better wines you get to taste.  

Summary

So far, we discussed two buyer segments: Engaged Newcomers and Enthusiasts. We have covered how purchase frequency affects customer loyalty. And, we discussed potential discounts and rewards that would be effective for these buyers. Let’s bring all of these pieces together and see what some programs might look like. 

The New Customer Program

This program would be for Newly Engaged wine drinkers that haven’t purchased with you before. These customers would benefit from a program to get them into your purchase cycle. Entice them with #EverydayWineGems that can help them expand their wine knowledge and that fit their palate type. Offer moderate discounts on these wines if they purchase them from you frequently, ideally at weekly or monthly intervals. 

The Customer Loyalty Program

This program would be for Wine Enthusiasts that have purchased with you before. These customers would benefit from a program to help develop the habit of purchasing from you regularly and frequently. Entice them with #EverydayWineGems that fit their palate type. These everyday wines will supplement the novel wines you will offer at exclusive members’ only tastings. Only offer the program if they purchase from you frequently, ideally at weekly or monthly intervals. 

 

Getting and keeping existing buyers in your consumption cycle is very similar to a subscription business model. You want them to buy from you at a prescribed interval, whether it’s at your tastings or via a wine club. Many subscription businesses have attrition rates north of 60%. These tips will help you create programs that will acquire and keep tasters and reduce your attrition rate.


There are really only two ways to build your business. Get more people into your tastings. Or, you can increase ticket price from your current customers. In this article, we discussed increasing ticket price per customer. This article focuses on the first way to build your business, getting more people through the door by getting new customers into the consumption cycle and by keeping existing ones in that cycle. We provide a sample loyalty plan for established customers and a new customer plan as a way to get first-time customers to buy and the fight customer attrition with existing customers. These are just two incentive program ideas that will help you build your business.

Looking for an incentive plan specific to your business? Reach out to us. We’re happy to help.

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