Archive for the ‘Wine Marketing’ Category
Social Media, Social Process and the Content Delivery Dilemma
Posted by Shea in Musings, Wine Marketing on February 2nd, 2010
In this article I want to talk about something that is not just limited to the wine industry, but that will become an important factor for all businesses engaged in social media. This is: how are we to effectively engage in a technology that’s visibility is beginning to exceed its maturity. How are we to see through the morass of information to understand the underlying phenomenon that we are dealing with. And, most importantly, how can we predict what all of this new technology will mean in the future.
A common analogy to describe the creation and adoption of new technologies is known as the “hype cycle”, developed by the Garner Group. It looks something like this:
One of the big critiques of this model is that it hypothesizes a static cause-effect relationship between the creation of technology and its adoption. There are many examples, such as fuel cells, of technology that has never been adopted into the mainstream. Jim Bullock at the 2003 Aye Conference hypothesized that technology adoption actually derives from the confluence of two vectors: 1. the social process, and 2. the delivery process. The social process is about people and their expectations whereas the delivery process is about the availability of the technology itself. Most technologies rely on other technologies to be successful, just as, for instance, social media relies not just on computing, but also on portable computing and, increasingly, smart phones.
The dilemma I want to talk about in this article relates to the first vector of technology adoption hypothesized by Mr. Bullock: the social process. This relies on a few presuppositions.
Firstly, these days it is cheap to get content to people. The costs of entry are minimal with electronic publishing, whether in a blog, via twitter, facebook or other social media services, being mostly free. Second, there are two basic kinds of social networks: open networks and closed networks. Open networks do not limit access by filtering individuals based on specific interests or commonalities. Twitter is the de facto example of an open network. Closed networks limit access by focusing on commonalities or interest. Facebook is the most important example of this, but also consider social media sites that focus on wine, like Cork’d, which are explicitly designed to facilitate dialogue amongst a select group of people.
Here’s my thesis: the differentiation between content delivery in open and closed networks is about the social process. Closed networks provide a clear set of tools that guide user’s expectations, and provide them with an easily digestible means to connect and share content. No one is confused about the purpose of Facebook: upon signing up the website asks you to enter your email address to find your friends.
Open networks, on the other hand, provide a limited set of tools to guide the user. Twitter does not build in expectations into its functionality, but instead relies on the user to figure out how to use it and how to interact with others. Twitter requires a more sustained effort to understand than a service like Facebook, which is why so many businesses fail to utilize twitter effectively.
Now, when considering the differing social expectations created by Facebook and Twitter one can notice the fundamental impact these expectations have on the nature of content delivery in these two networks. Facebook, while setting expectations firmly and clearly, limits the diversity of its content delivery to what people expect to read and hear from their friends. Hence, advertising on Facebook is of the traditional non-interactive sort. Intrusive advertising, no matter how well targeted it is, is a necessary consequence of Facebook’s closed nature. People put up with this advertising because the Facebook network has reached such a critical mass that, to put it in economic terms, the costs of not participating are far higher for most people than the costs of viewing intrusive advertising.
Twitter does not operate this way. Because expectations are diffuse and unclear, twitter effectively has no rules for managing content delivery. Even if, over time, we begin to see Twitter using intrusive advertising, this is not the real future of content delivery on open networks. Instead, open networks such as Twitter’s true power is in allowing more diffuse and less intrusive content delivery for businesses. Twitter’s weakness is in scoping and channeling content into easily understandable chunks and in providing guidance for its users.
Thus, if we return to the “hype curve” above, it is only possible to understand social media’s place on this curve if we divide it into social process and delivery process. Right now, the delivery process is peaking, and, may in fact actually be maturing. As newspapers die, content becomes easier and easier to produce to such an extent that almost everyone knows how to and does produce content online, thus making the delivery process nearly ubiquitous.
On the other hand, the social process has yet to mature as fully as the delivery process. Social and personal expectations about social media are not cohesive. Additionally, the delivery processes have fragmented the social processes to such an extent that many Facebook users simply don’t understand or don’t find a use for services such as Twitter and many Twitter junkies are tired and bored of Facebook and its limitations.
If the “hype curve” is at all accurate in relation to social media, then it is only accurate if we increase the number of data points and the number of axes on which to plot the development of the technology. Thus, social media is not just about visibility and maturity; it is also about social expectations, the lost third axis. By plotting along these three axes we can get a better image of the future of social media.
My first thesis that the differentiation between content delivery in open and closed networks is about the social process leads me to the prediction that the future of social media will merge the guidance element of closed networks with the diffusion element of open networks. I believe that Foursquare is an early attempt to achieve this combination of factors, but that its interactive capabilities need to be enhanced.
Thus, the content delivery dilemma in social media is not about the cost of delivery any more. Rather, the dilemma is about the method of delivery. Content is so easy and cheap to produce that users need interfaces that guide them through the sheer volume of material and provide them with guideposts on not just how to manage content, but, more importantly, how to produce it.
A mature understanding of the social process that underlies the development of social media will allow a visionary firm to go beyond traditional monetization and intrusive advertising. In the future, the most successful networks will figure out how to leverage word of mouth marketing within a model of content guidance and signposting within an open network. This will allow for word of mouth marketing to become more important and more targeted than traditional marketing. It will also converge the benefits of visibility with the benefits of social expectations. It is only then that social media will reach the first stages of its maturity.
The Millennial Quotient: How 21-35 Year Olds Are Changing The Wine World
Posted by Shea in Wine Marketing on January 20th, 2010
Millennials are hot in the wine world right now. Everyone is talking about us and trying to figure out how to sell to us. Recent data shows that Millennials are consuming more and better wine at a younger age than their parents’ generation, but no one seems sure what this trend means and where it is going to go. Marketers often try to tap into the trend, but few do so successfully. Witness the collapse of Roshambo winery in Napa (Alder over at Vinography has a great article on it) whose marketing was designed to target this age group, but whose business model ultimately failed.
Why is everyone failing to understand this demographic? For one, I don’t think that Millennials all fit into the same pattern – there are definite segments with distinct qualities. However, what I want to write about here is the segment of Millennials who are starting to think of and treat wine as more than a vessel for alcohol delivery, but who are becoming genuinely interested in exploring what goes on behind the bottle and who are starting to associate wine with food.
From my perspective, there are ten characteristics of this group that thus far marketers have poorly understood. Keep in mind that my opinion is based entirely on personal experience and reflection and not on market research. I encourage debate and reflection on this issue more generally. Here’s what I think (in no particular order):
1. We care about process.
With the increasing importance of movements such as the slow food movement and initiatives that focus on understanding the source of food rather than simply the end product, Millennials are becoming increasingly interested in understanding the process behind what we are consuming. We are ever curious about biodynamics, organics, vineyard practices and additives. Wine labeling is far behind the trend on this issue, but when and if it ever catches up, Millennials will be checking them just as fastidiously as food labels. More and more certifications will start to develop and these will hold sway so long as they gain respect in the community.
2. We care about the small guy.
We don’t tend to believe in big corporations anymore. We don’t like to support them, particularly when it comes to agricultural products. As more and more Millennials begin to understand that wine is an agricultural product, their support for small producers and farmers will increase. Of course, major brands that sell wine cheaply will still prosper; however, there is a huge open niche for small producers if they market themselves correctly and reach out to the Millennial generation.
3. We don’t mind spending money, but we want to feel ‘honest’ value at any price point.
Marketers often make the mistake that Millennials want the cheapest option possible. That is not the case. Millennials see wine as coincident with food, and often bring it over to friend’s places as guests. No one wants to be the cheap guest; everyone wants to impress their friends at the party with a carefully thought out (or really good) selection of wine. Wineries who make the assumption that Millennials care about price more than quality are simply missing the boat. Both price and quality matter to this growing segment of wine appreciators.
4. We have growing skepticism for commercial wine scores.
Millennials don’t like to be told what to do. Wine scores are convenient, but this emerging group of wine appreciators is caring less and less about them. New services such as Cellar Tracker, blogs, and good old word of mouth, fuel wine sales within this demographic just as much as scores do. And, with time, the value of commercial scores will continue to diminish.
5. We see wine as community and conversation, not prestige.
Again, social media is not something you can just jump into and succeed at. Underlying social media is the basic tenet that Millennials see wine as a community building enterprise, and one that fosters conversation. We care far less about the prestige of a particular wine or wine region, and far more about new exciting discoveries made through friends. That, and we see wine as a vessel for community rather than simply a product to consume.
6. We think of wine as personal discovery.
Just as much as Millennials see wine as community, we also see it as part of personal discovery. Finding the wines you love, and the styles that resonate with you is part of building a Millennial’s sense of personal style and sense of self. We actually don’t want to be the same as everyone else; rather, we want what we consume to feel individualized and an honest expression of what we care about.
7. We like to think of wine as our own culture and not benefiting from the cache of others.
Millennial wine appreciators in North America are not buying wine for the cache of a particular region. While French wine remains popular, it is not because we are buying into the prestige of French culture. Instead, Millennials like wine to express and become part of their own culture, wherever we are from. This helps to explain the popularity of the BC wine industry with young BC wine drinkers. However, BC wineries that try to rely simply on local pride and not consider all the other factors that make wine drinking Millennials tick will fail to properly tap into this market segment. Don’t forget, we care about QPR, process, and honesty too.
8. We see wine as multivalent and not univalent.
Similar to how wine scores are diminishing in importance, Millennials tend to see wines as having many meanings and possible interpretations. We don’t really care about accurately describing a wine along some rigid objective line. We appreciate a diversity of opinions and thoughts. But, this does not mean we are simple relativists. No, Millennials also have a great respect for knowledge, and care tremendously about why things are the way they are. We just don’t think there is one answer to the question.
9. We believe in principles and knowledge, but not rules and rankings [plus don't talk down to us].
This is an extension of the last point. Certain things can be understood objectively, other things cannot. Millennials do believe that certain principles and knowledge are useful to know in wine appreciation. However, we don’t care so much for rules and rankings – we just don’t find them useful in understanding wine. Again, if wine is just as much cultural and community based as technical and flavor based, then rules based entirely on the latter factors will simply alienate Millennials. Give us basic principles to work with that still allow us to develop community and pursue personal discovery? Well, then we’re all for it.
10. We prefer branding as story and not as message.
This is the biggest mistake of marketing to Millennials in the wine world today. Don’t talk down to us, and don’t try to create phony lifestyle branding for your wines. Instead, find (not create) an honest story and tell it with panache. Doing this successfully taps into all the other factors I’ve discussed above, and helps to build a personal connection between your brand and the Millennial customer. We like attention, but we also like freedom and respect. Respect our freedom, but give us something on which to work that freedom and you will start building some pretty loyal customers.
The Wine Store as Community: A Forgotten Side of Wine Marketing
Posted by Shea in Wine Marketing on January 15th, 2010
One of the unsung heroes (or villains) in the wine industry is the local store owner and staff. These guys are the front line soldiers in capturing new consumers in the wine industry and helping people learn to trust and explore their palate. Why, then, are they so often ignored in debates about wine appreciation and market share? And, what can local stores do not only to improve their bottom line, but also to contribute to the wine community in more ways than simply making a buck.
Have you ever entered a wine store excited to find something new and enticing only to be confronted by lackadaisical staff or an overwhelming disorganization of bottles? At their worst, wine stores can actually dissuade consumer appreciation. Poor staffing and lack of passion leads people to buy the same old thing or simply choose a bottle at random. Without context, a wine bottle means very little to the average consumer, and even expert consumers will often benefit greatly from passionate input and discussion. This leads me to my first point.
Wine stores should not just be ports of call for the thirsty, but rather should foster a community of passionate wine lovers who enjoy each other’s company. The best wine stores are those that provide a personal touch to their stores that makes people want to come in and talk. First of all, forget shelf talkers unless you write them yourself. And, while in Canada it is illegal to have a wine bar in your store, it is possible to hold occasional tastings on premises. Additionally, staff should be trained to engage with the consumer and start up a conversation. I know I’ve spent many an hour in my favourite wine stores discussing wine with the staff. This not only usually results in me buying more wine than I should, it also makes me want to come back. This is not only good for the wine store, but also for the wine industry, who benefit greatly when consumers learn to trust and expand their palate.
These days social media is becoming one of the most important marketing tools in the wine industry. Wineries can now market direct to consumer and engage with them on a personal level. This same philosophy applies to wine stores. If you run a store you need to consider how you are using these tools to engage with your customers. Imagine the benefits of direct feedback and the huge increase in customer service that attentive social media marketing accomplishes. In my mind, great customer service will result in great word of mouth, expanding both your niche and the breadth of customer appreciation. I know from experience that I will recommend wine newbies go to the stores with the best customer service since this is the best way for them to start engaging with the world of wine. Wine, after all, is all about the people.
I suspect the wine store dimension has been neglected and misunderstood by marketers because they have failed to understand a wine store for what it truly is. Traditionally, marketers try to get good product placement (most visible) by utilizing shelf space, shelf talkers, marketing events, and catchy labels. Marketers expect consumers to go into the store, get the bottle that is the easiest to see and displayed most prominently, look at the label, and perhaps read the marketing blurb on the back or on the shelf talker. Of course, marketers also rely on “points” to sell wine, with many retailers posting the scores of a wine by Robert Parker, Wine Spectator, etc. But this entirely misses the point.
Wine stores, at their best, are communities, not message boards. As much as wine drinkers still rely on points, labels, and shelf placement, this is the fault of poorly run stores. These stores are simply working to help promote mass market and uninteresting wine. A community based store, on the other hand, will build relationships directly with consumers and engage them in conversation. Shelf space has nothing on great word of mouth, and the passionate clerk who waxes poetical about the great Gruner Veltliner he just had will end up selling a broader array of wines to a broader base of customers.
Marketers for the big brands don’t concern themselves that much with this, since they rely on statistics and market research. With limits on resources, the little guys have very little opportunity to do the same. They need new strategies and more thoughtful approaches.
So what’s the bottom line? If you are a small winery looking to grow your customer base, use social media to establish direct relationships with consumers, but also don’t forget about how wine stores can help capture consumers you would otherwise not be able to reach. Help wine stores promote your brand by establishing personal relationships with the best, holding tastings, and otherwise providing as many opportunities as possible for the staff to get to know you and your wines. Offer customers opportunities to visit your winery or attend special tastings. This will help to grow sales through word of mouth and capture customers that will get to know you and your wines rather than buying based on score or inclination. These are the customers that will hold your business together when times are tough. Accordingly, they are the “core” of your winery and you should put every effort you can into keeping them engaged. Wine stores, for all their faults, are part of this equation. Find the good ones, and build that relationship.
And for wine stores? Don’t treat your customers like ignoramuses. Engage them, talk to them, and make them part of your store’s community. Doing otherwise is just bad business.
