Dialing up wine sales over the phone
Published: Sunday, April 21, 2013 at 4:15 a.m.
Last Modified: Friday, April 19, 2013 at 6:24 p.m.
In an age when most people have cellphones, caller ID and and a healthy disdain for unsolicited phone calls, a telemarketing company would seem an unlikely place to find growth.
But while the telemarketing industry is shrinking, there's a growing use of phone sales in the wine industry, especially after the recession changed the buying habits of luxury wine drinkers.
VinoPRO, a Santa Rosa company that handles phone sales for 50 wineries including Jackson Family Wines, Constellation Brands and Treasury Wine Estates, brought in $8 million in revenue last year. It has grown 1,800 percent over the last three years, and has been notified that it qualified for the Inc. 500, which lists the fastest-growing companies in the nation, according to Jeff Stevenson, the company's president and CEO.
“There are several people making six figures in Sonoma County selling wine, using the most antiquated technology on the planet, the telephone,” Stevenson said.
“If we had tried to do this five or six years ago, before 2008, the wineries were oblivious to the fact that they needed help in this area. There were heady times, and they didn't feel the need to pursue alternative channels,” he said. “Now, you have to give someone a reason to spend money.”
The success of telemarketing companies coincides with an ongoing push by wineries to ship directly to consumers, sidestepping the “three-tier” system where wineries sell through wholesalers to retail outlets and restaurants. Direct sales are much more profitable for wineries because they don't have to share their profits with second and third parties.
Last year, wineries shipped 3.18 million cases directly to consumers, according to a recent report by Wines & Vines and ShipCompliant. Direct sales rose to $1.46 billion, up 10 percent from 2011 and 24 percent higher than 2010. VinoPRO sells 0.5 to 1 percent of all direct-to-consumer wine sales, Stevenson said.
One simple reason: people like to talk about wine.
“It's a passion,” said Mark Pope, founder of Chatterbox, a Napa company that also does wine telemarketing. “So a discussion abut wine can be fun.”
Mark Parton, founder of Call For Wine, a telesales company now owned by Napa-based Wine Direct, says he's always surprised at how easily customers will stop what they're doing to talk to someone from a winery.
“Once you get outside the Valley, about 100 miles away, people want to be part of the winery,” Parton said.
“You call a doctor, and he's like, 'I'm about to go into surgery,'” Parton continued. “But they won't walk away from the wine guy. They're still willing to talk to you even if they're in the middle of surgery.”
Call For Wine works with more than 30 clients and has 10 full-time employees and several part-time sales representatives, Parton said. The company also handles in-bound calls for its clients, so if a customer calls a winery and nobody's there to answer, the call won't go to voicemail.
In the airy office space at VinoPRO in Santa Rosa, wine bottles line the shelves and windowsills. Saleswoman Allison Walsh, who earned her spacious window seat by virtue of being among the top sales performers at the company, spoke with a customer.
“You guys like brand reserve, right?” Walsh asked cheerfully over the phone. “That's what you got in September. Okay, we'll do a case of that ... If we add on another six, that will really be easier with the shipping. That grand reserve pinot gris is tasting really good right now.”
Walsh was attempting the “up-sell,” suggesting a larger purchase. It often works. The phrase “Why don't we” was taped up on one cubicle, a reminder to use friendly phrasing.
“I'm wondering if you still drink Robert Mondavi wines?” saleswoman Marian Healey asked in a bright voice. “We've got some wonderful cabernets in our new release, and I'd love to get some out to you. What kind of cabs do you like?”
Another technique the company employs is calling a consumer right after they make a purchase on a winery's website, to convince them to buy more. Many of their winery clients use software made by eWinery Solutions, a Napa company, which tracks tasting room and online sales and helps coordinate telemarketing efforts.
“The sooner you can call them when they make a purchase, the more you can get them to buy,” Stevenson said.
Data drives many of the conversations at VinoPRO. Sales staff have access to a database of information that includes details about what the potential customer has bought in the past, their favorite wines, birthdays, a customer's wife's name, anything they've found out in previous phone calls that could help make a sale down the road. The companies only call customers who have given their phone number to a winery in a tasting room.
“We find we sell most of the wine in the late afternoon or early evening, and most wineries can't staff that late,” Stevenson said. “People are home, they're off work, they're having wine and they're relaxing, and it's a great time to take advantage of the sale.”
Although Stevenson comes from a technology background, he's not a believer in using the Internet and social media to sell wine.
“We don't use Facebook or Twitter or email, because those metrics are very inefficient at selling wine,” Stevenson said. “It's great for branding and it's great for getting the word out, but it's not that great for selling wine.”
In the first six weeks of opening a new division focused on sales to wine club members, his telemarketing staff outsold the tasting rooms for some of his clients.
“It's not always the right time and place to sell them a wine club membership when they're at the winery,” Stevenson said. “They're having a good time ... they may just want to enjoy the facility and not be pressured into sales.”
Selling wine over the phone has its own set of challenges, including making sure calls aren't placed to customers on the federal “Do Not Call List.” Fines for a violating that list range from $16,000 to $25,000, according to Contact Center Compliance Corp., a Santa Rosa company that helps companies navigate the laws governing telephone sales.
“The industry is kind of divided between people who really think that their chances for generating buzz or sales about their company is through social media, and then there's the people who believe in direct sales, and then there are the people who rely on the traditional distributor method,” said Ryan Thurman, director of sales and marketing for Contact Center Compliance.
The believers in the telephone think the industry will continue to grow.
“At the end of the day there's certainly more margin to be had selling directly to the consumer,” Pope said. “I think it's probably in its infancy, with regard to wineries. It's just starting.”
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