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9 Ways Wineries Can Improve Sales AND Prepare to Seek Investors

Lesley Berglund was a panelist at last week’s North Bay Business Journal Wine Conference. She has considerable experience with building and selling companies. She  also serves as a consultant to wineries focusing on change management. Ms. Berglund described nine things all wineries should do, whether they are seeking to be acquired or just trying to improve their business.

Make financial information more visible and use it to improve your business.
Understand your true costs, including selling, promotional and operational costs. Knowing all of your costs is not only essential to ensuring profitability, it allows you to make decisions on spending in particular areas to increase efficiency or drive growth.

Cut projects that don’t add real value.
There are a lot of things businesses do, because they are interesting or pet projects of management, that aren’t in alignment with key company goals or do not add significantly to profits. These projects not only don’t contribute, they suck resources from more important tasks.

Do SWOT analyses on a regular basis.
Many companies only look closely at corporate strengths, weaknesses, opportunities and threats every few years or as part of a major strategic overhaul. Making SWOT analyses part of quarterly or half-yearly business reviews and new product planning processes will help ensure that you’re always focused in the right directions.

Top-grade your team.
LesleyBerglund says, “‘A’ teams hire ‘A’ players and ‘B’ teams hire ‘C’ players.” There’s a lot of talented people looking for jobs these days. Don’t compromise. Hiring well usually delivers much more to the bottom line than the incremental cost of employment.

Motivate with metrics and open book management.
Employees are happier and more motivated to achieve corporate goals when they know the reasons for the goals and the impact of their work on the bottom line. Set goals that are measurable and tied to what matters most. Review progress openly and frequently.

Replace yourself. Repeat.
Very few wineries are truly one-man shows, but many are run that way. If a key person chokes on a grape or needs to shift to an unexpected yet arduous task, like selling the company, other vital activities may go untended. Make sure everyone, including yourself, has a backup that can take over on a moments’ notice. Executive management should turn special projects over to staff as soon as possible.

Make your own luck.
Ms. Berglund points out that wineries have been very fortunate up to now with regard to walk-in business. Consumer enthusiasm and wine tourism have meant that opening a cellar door and putting out a sign generated decent business. However, that approach is not sufficient when the economy declines or there is a problem with other channels that requires fast growth in direct-to-consumer sales. Work proactively to maximize sales in the tasting room, via mail and online.

Ask for the order.
Lesley Berglund’s company,
WISE, does a lot of “secret-shopping” in tasting rooms. These studies have shown that the 70% of consumer tasting room visits don’t end with winery staff asking for an order. Even fewer try to sell the wine club. You don’t need to be pushy and not every visitor will buy something but, even with a gentle approach, ensuring that every happy visitor is asked for an order will surely bring a meaningful uptick in sales.

Get contact data.
Most customers who take the time to go to a winery will welcome the opportunity to be informed about future events, new releases, etc. Yet, Berglund’s studies show that the vast majority of tasting room customers walk away without being asked for their contact information.  Direct customer contact is vital today, even if you sell most of your wine through restaurants or distribution. The market for wine is very crowded and you need to maximize your mindshare with the end consumer by communicating with them directly. And, if you’re looking to be acquired, the size and quality of your consumer mailing list is one of the first things investors will look at.

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