Is There Still Growth In the Wine Industry? WineHub Data Says Yes

Founder Ben Gibson reveals sales strategies that work

In May, I spent two weeks on a bus, where I met Ben Gibson.

We were on a South African wine tourism immersion organized by the fabulous Robin Shaw of Wine Tourism Australia. You can learn a lot about someone in two weeks. And what I learned is that Ben has data. Lots of data.

He’s the founder of WineHub, the wine (and spirits) platform built for Shopify. This means he can see which sales strategies work and which ones don’t.

Ben developed many of WineHub’s features after racing to the cosmetics store to buy a moisturizer for his wife, who was anxious she was about to drop out of the store’s loyalty program. He left the store with products for himself — and a new way of looking at sales. Ben went on to use many of the cosmetic industry’s sales tactics when building WineHub.

All of which he discusses on the Drinks Insider podcast.

But he’s not all glowing skin

I was so impressed with Ben’s interview that I wanted to use it for a case study in my keynote speech to New Zealand Winegrowers in August*. So I hassled him for a photo.

He sent it to me a couple of nights before my presentation, and I was so jet-lagged, I just dropped it into my PowerPoint and sent it off to the conference organizers. Who came back and asked me if I meant to feature Ryan Reynolds?

Thanks, Ben.

The real Ben Gibson, founder, WineHub. Those skincare products are really working for him.

7 takeaways:

1. There’s still room for growth

We’ve all heard the gloom and doom about declining consumption. Well, there’s still growth to be had from the existing customer base.

“The average growth we’re seeing across the board is 12.8%, but we’ve got some customers that have really outdone even my expectations — well above 40%,” says Ben. “There’s definitely some optimism in the market.”

2. Do it when it suits the customer

Ben says that too many wineries still demand the customer fit the business, not the other way around.

“When it comes to direct-to-consumer strategies or wine clubs, a lot of the historical way has been built around when it suits the business to do things,” he says. “Where we’re seeing the growth is in unpicking some of that very rigid structure.”

Many wineries ship according to a specific schedule, for example. “You can’t really blame the wineries for this,” says Ben. “Most of the software that people have been using is fairly linear.”

But people want it to arrive according to their schedules. “That’s where the growth is coming from.”

3. Loyalty programs can be more lucrative than wine clubs

• A subscription is the ability to buy something to a specific delivery interval. This is where a customer might choose to have six rosés delivered, every two months, and in return for that regularity get a discount. It’s like a gym membership.

• A wine club offers an array of different customer benefits. “If you take your wine every month, we increase your discount. We increase your benefits.” The customer gets perks and benefits beyond a simple subscription.

• A loyalty program rewards customers based on overall spending. “As long as you spend $200 or $300 every six months, you can go into the Bronze membership tier.” Rewards can also be tied to the number of bottles, rather than the value.

“If you look at your historical purchase information, you might have loyal customers that have spent a high amount of money with you, and you can put them in a special category of their own,” he says.

“Loyalty is not linked to regularity of delivery.”

4. Automate everything

“WineHub will go through all your sales data and drop people into the correct tier,” says Ben. “It will email them the welcome notification. If they’ve not spent enough to maintain their benefits, it will send them an email.”

All you need to do is populate the email templates with copy, and the system will send them out at the right time.

Ben also recommends Klaviyo, which creates personalized, automated campaigns using customer data. It can be integrated with WineHub or used by itself.

5. Value over volume

Ben says those wineries pursuing a value-based proposition, rather than a volume-based one, are seeing improved sales numbers.

“Demographics don’t seem to matter,” says Ben. “You might have someone in their 70s going through a downsizing, but you might have someone in their 20s who can’t afford an upsizing. You’ve got two different demographics with exactly the same problem, that you can service with the same strategy.”

6. Watch for the cancellation warning signs

If your customer stops buying outside of their club schedule, watch out — they’re probably about to cancel.

“Anybody that hasn’t bought outside of their club delivery for an extended period,” is your prime candidate for cancellation, says Ben.

Entice them back with a great offer, like a museum release. Or tell them that because they’ve spent so much in the past, they can enrol in the Gold tier of your loyalty program, which gives them back their club rewards, but on a more flexible program. 

Ben says wineries lose customers simply because they don’t have the technology to capture the patterns, so they’re not aware there’s a problem until it’s too late.

7. Personalization increases spend

“Personalisation is king when it comes to making people feel special,” says Ben, and it helps drive sales.

“We know you love Riesling, so what we’ve done is put three bottles of your favourite Riesling in your customer portal. Log in and buy them now. Things like that can make a difference.”

Ben adds that you shouldn’t be afraid to impose a cost on customers who don’t react. “So if you want to buy our most expensive, rarest bottles of wine, you have to be a Gold member for at least 12 or 18 months. And you must have had a certain number of deliveries over the same period of time.”

He had a lot more insights to share, which you can hear on the Drinks Insider podcast.

The Big Opportunity

“Bumping up the order value is the easiest way to increase sales — make sure you’re making the most of your database.”

Ben Gibson, WineHub

The Tim Stockwell Interview

Last week I posted a long-ish interview with Prof. Tim Stockwell, the man who is almost singlehandedly responsible for convincing the public there is no safe level of drinking.

I’ve had some great feedback, including from people who said the interview completely changed their minds on the issue.

You can listen to it here:

*By the way, if you want to know what I talked about in my presentation to the Kiwis, you’ll find it here.