by Sally Colby
When it comes to attracting customers to the winery and tasting room, what really matters? Miguel Gomez, associate professor at the Charles Dyson School of Applied Economics at Cornell University, wanted the answer to that question.
“As we know, most emerging wineries in non-traditional areas depend on the tasting room, at least in the initial year,” said Gomez. “The tasting room is the most powerful marketing tool that new winemakers have.”
Gomez said firms that cannot satisfy their customers are likely to lose market share to rivals who offer better products and services at lower prices. “We know from marketing studies that the cost of attracting a new customer is five times higher than the cost of retaining an old customer,” he said. “It’s good business to keep our customer base very happy. Customer profitability tends to increase over time because those loyal customers are the most effective marketing tool through referrals, and they are willing to pay price premiums and become less sensitive to price changes. They also tend to buy higher quantities.”
To determine what drew customers to tasting rooms, Gomez conducted a study that included six tasting rooms; three in New York and three in Iowa. He noted there are many attributes that are part of the customer experience, including friendliness of staff, retail execution, cost of the wine and perception of quality; and it’s important to know which of these attributes contribute to customer satisfaction.
Why focus on customer satisfaction? Gomez said every business has inputs, and for a winery (or brewery, cidery or distillery), those inputs include human resources, buildings and the wine. If those inputs are used better than what the customer originally perceived, the level of customer satisfaction is higher. Customer satisfaction tends to increase over time and leads to customer loyalty, which leads to profitability.
For the study, data was collected on the level of experience and level of satisfaction of more than 350 customers. Customers rated wineries from 1(worst) to 5 (best) on 24 customer satisfaction attributes. “We asked them what they bought, how many bottles they bought and their intentions to buy again and the likelihood of recommending the winery to others.”
Customers rated attributes such as signage and directions, ease of parking and access, lighting and sounds in the tasting room, knowledge of the wine pourer, friendliness of pourer, helpfulness of tasting room staff, space in the tasting room, variety of wines available for tasting, waiting time between samples and cost of the tasting.
The survey included a question on whether the individual purchased wine after the tasting, and if not, why? Another question was how much they spent or intended to spend, and whether the customer would consider purchasing from this winery again and recommend it to others?
Gomez condensed the results to two simple but critical points: “The main drivers of customer satisfaction is service provided in the tasting room,” he said. “That human component, talking and interaction with the customer; the ambience of the tasting room.” The second finding is that increasing customer satisfaction leads to greater sales and higher profits, and increases the probability of that customer making a future purchase.
“The key is not just to have the customer satisfied,” said Gomez. “The key to really enhance sales is to move a customer from being satisfied to being extremely satisfied; to be delighted with the experience.” Gomez added that the extremely satisfied customers are the ones who will make the difference in how much they spend in a given visit.
The main drivers for high or low levels of satisfaction in service included wine knowledge of pourer, appearance/presentation of pourer and friendliness of the pourer. In scoring retail execution, customers indicated that they appreciated the availability of non-wine gift items, food/snack items and the presentation and display of wines. In the ambience category, patrons gave high ratings to the appearance of grounds and overall tasting room cleanliness.
“People ask if the cost of the tasting is important,” said Gomez. “In all the studies I have done, the cost of the tasting is not important in the level of customer satisfaction.”
When it comes to providing detailed information about wines being tasted, Gomez said that there’s little benefit. “Less information tends to be better in terms of making people happy and in terms of the dollar amount they spend,” he said. “Sometimes we overwhelm customers with information — excess information confuses consumers and they shy away from buying because it’s just too complicated to process all the information.”
Does wine quality make a difference in tasting room sales? Gomez said that customers who visit tasting rooms are too heterogeneous in their perception of quality to provide good feedback. “Some customers think a very sweet wine is the greatest thing; others don’t,” he said. “There’s a range of levels of knowledge of wine.”
Does the size of the bar attract or detract from the tasting room experience? Gomez said there’s no clear evidence on the size, design or material of a bar. He added that extending the tasting room experience to the outdoors is attractive if there’s a nice view with the vineyards nearby.
Some smaller wineries struggle with the dilemma of having just one pourer available, resulting in customers who have to wait too long for service. Gomez said it’s probably worth hiring another pourer at peak times to maintain a high level of customer satisfaction, which should eventually lead to more sales.
There’s no question that tasting rooms require the right people — excellent pourers and staff, but where can those people be found? “Some of the wineries that are most successful here in the Finger Lakes use retired teachers,” said Gomez. “They train them very well in tasting. So they have very friendly people who know how to educate a customer.” In contrast, Gomez said that Long Island wineries often hire young men or women, train them, and they’re successful. “I think it depends on the type of customers you get,” he said. “There is no one answer that fits all.”
Despite the importance of the tasting room experience, Gomez recommended that start-up wineries limit spending on overall ambience because the startup expenditure is already high. He said that keeping the tasting room very clean is one simple effort. “I would be very cautious on making huge investments on redesigning the tasting room,” he said. “Before ambience is the issue of service.”
Gomez’s study concluded that wineries that want to improve their customer service should focus more heavily on service than retail execution. The biggest gains are made when customer satisfaction levels move from 4 to 5, which means every aspect of the tasting room should be fine-tuned to ensure the best possible experience for each person who comes in.
The study revealed a strong link between customer satisfaction and sales made after tastings. Wineries that want to improve sales are most likely to do so when customer satisfaction is high. “The lion’s share of sales happens in the tasting room,” said Gomez. “We should consider the tasting room as our most powerful tool in terms of marketing the winery.”
What brings customers back to the tasting room?
by Sally Colby