When telemarketing is not a bad word

Wineries urged to use phone sales to reach their best customers

Napa, Calif.—When the home phone rings during dinner, do you answer it? Many people don’t, because they fear the caller is a telemarketer trying to sell them a product they don’t want or need.

But it doesn’t have to be like that, according to a panel of winery direct sales veterans who spoke Wednesday during the Wine Industry Technology Symposium attended by more than 300 people. Well-timed telemarketing calls from a winery already familiar to the consumer are often welcomed and can yield a very high rate of sales, the panelists said.

Judd Wallenbrock, general manager of 10,000-case Michel-Schlumberger winery and owner/general manager of 2,000-case Humanitas winery, Napa, related his success story with outbound telemarketing. Michel-Schlumberger, a premium winery in Sonoma County’s Dry Creek Valley, used to sell the majority of its wines through distributors. The company wanted to increase direct sales and started a new, higher tier brand from the estate’s grapes.

Wallenbrock said his initial strategy was to use winery staff to make telephone sales calls to the winery’s existing 2,500-member wine club list. “We failed miserably when we tried to do outbound sales internally,” he admitted. “We just sucked at it.”

But he tried again, this time contracting with an outside vendor. When professional wine telemarketers called the club list, they reached about 50%, closed sales on 50% of the right parties reached and generated $270,000 in two weeks. To top it off, the sales company then called the non-club members who had bought from Michel-Schlumberger before and whose phone numbers had been collected, and sold another $30,000 of wine.

Holding wineries back
Brian Gray, director of marketing and sales manager at 100,000-case St. Supéry Vineyards & Winery in Napa Valley, explained that for consumers who have visited your winery and joined the wine club, a call from a winery representative, whether in-house our outsourced, is often a welcome thing. He said that telemarketing’s negative image is holding wineries back from using a very effective sales tool.

He showed a blank white screen as part of his PowerPoint presentation. “This is what you are selling now,” he joked, referring to the reluctance to use telemarketing. “Wineries need to check their biases at the door. These are your customers. They love you probably more than you actually know. We still don’t grasp the almost stalker nature of the relationship that many of our customers have with us.”

When a winery rep calls someone, the consumer thinks, “My winery called me. Impressive.” Gray continued, “Believe me, they absolutely want to hear from you,” because the customer needs wine and has ordered it from you before.

In-house approach
Susan Cole, the director of consumer marketing at 10,000-case Pezzi King Vineyards in Healdsburg, has run an in-house telemarketing program and also used outside services. She explained several lessons she learned about the in-house approach.

A winery needs a full-time manager, very skilled telemarketers, evening and weekend shifts as well as a certain amount of special equipment in addition to computer, desks, phones and headsets.

She said the team leader or supervisor is critical: Running a telephone sales operation requires encouragement, creative incentive programs that include games and prizes and the ability to adapt and change an offer or approach if it’s not working. Constant monitoring of calls is needed, in person and on recordings.

Finding sales people who can emotionally connect with consumers over the phone is difficult but essential, she stressed. Some wineries simply choose their best tasting room salesperson, the people-lover who easily strikes up conversations. “I would suggest that is one of the worst steps you can take,” Cole said. It would rob the tasting room of its best seller, and put him or her in a very different position that requires a different skill set.

Cole recommended a combination compensation package that is part salary and part commission. The commission provides an incentive to sell; the salary acknowledges that it’s also important to give customer service, answer questions, get new contact information, payment information and so on.

When to outsource
Sonyia Grabski is an experienced winery sales manager who now runs her own company, DTCinsider. She gave advice about when to outsource outbound telemarketing. If a winery has excess inventory, a healthy database of active purchasers—and if the outside vendor understands the brand and can relate to its customers—it makes more sense to telemarket rather than use a flash site or other blatantly discounted sales channel.

She and other panelists explained that outbound telemarketing does what flash sales do not: It builds a relationship between the winery and the customer and avoids overly visible discounting. The discount is almost always apparent in a flash offer. Winery telemarketing offers contain discounts, too, but they are subtler and tend not to devalue brands. Plus, wineries tend to make higher margins with telemarketing.

Grabski estimated that more than 130 wineries currently outsource their outbound telemarketing, and 2010 sales were in the range of $3 millio n to $8 million per company. This year, such sales are estimated to grow 50% to 80%, she said.

She noted that outside vendors also can handle an overflow of inbound calls at peak times, can recover credit card declines and expirations, can find phone numbers for customers who only left an address and can reactivate wine club memberships.

One point stressed by all the panelists: Telemarketing salespeople must be both really skilled and really well informed about the winery and its products.