By Stephen Mitchell, Co-founder, Elemental Meme
In a 2013 interview Rick Tigner, President, Jackson Family Wines, stated that “In the wine business, what you get is a lot of what I call the ‘sea of sameness.’ You look at a wine magazine ad and you see a bottle and vineyard, but it can be anybody’s bottle and anybody’s vineyard. The question is how do you connect with a consumer in different ways?”
Joe Roberts, aka 1winedude echoed a similar thought in a post in May of 2014: "In today’s hyper-competitive marketplace, traditional marketing tactics only address the first step in a long and continuous journey to marketing success; they make customers aware of you, then what?"
Two professors from Texas Tech also weighed in on the issue of the challenges of conventional wine marketing tactics when they wrote in July of 2014, that "During the last 10 years the US wine market has become increasingly saturated, making it difficult to market a new winery or improve sales of an existing one. High barriers to entry, including significant upfront costs and high levels of competition, increase the importance of having a successful marketing campaign."
So, what are the implications for a successful wine marketing campaign today? At Elemental Meme, we know from our experience and track record that one of the best ways to launch and/or rapidly build a resilient wine brand is to go beyond traditional marketing and public relations and use influencer (word of mouth) marketing.
What is influencer marketing and why is this strategy so effective? A recent Forbes article on influencer marketing defines the term "as a form of marketing that identifies and targets individuals with influence over potential buyers." The ultimate aim of this type of marketing is get those influencers to talk about your brand in a way that influences other people to purchase. As Andrew Barratt of the powerhouse social agency, Social Ogilvy, reports, "Influencer marketing is a relatively simple, but incredibly effective, form of marketing that focuses upon specific key individuals rather than the target market as a whole." If done correctly, wine influencer marketing can build terrific buzz and have an enormous impact on a wine brand's reputation and sales.
What kind of impact are we talking about? According to a recent study by Nielsen, "Ninety-two percent of consumers around the world say they trust earned media, such as word-of-mouth and recommendations from friends and family, above all other forms of advertising—an increase of 18% since 2007." An article in McKinsey Quarterly notes that "Marketing-induced consumer-to-consumer word of mouth generates more than 2X the sales of paid advertising." According to Social Chorus, influencer marketing drives 16X more engagement than paid or owned media. Deloitte notes that customers referred by other customers have a 37% higher retention rate. Business author and strategist Frederick F. Reichheld observed in an article entitled "The One Number You Need to Grow" which appeared in the Harvard Business Review that "The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department." In other words, the best marketing is marketing that focuses on building brand advocates. Why focus on building brand advocates? Because Reicheld's work has also demonstrated that “a 12% increase in Brand Advocacy, on average, generates a 2x increase in revenue growth rate plus boosts market share." All in all, these results are pretty compelling reasons for considering an influencer marketing strategy.
A powerful reason for wine marketers to consider influencer marketing is that the industry and the product are well suited for this type of approach. A recently released study, "Using Social Media in the Wine Business – An Exploratory Study from Germany" reinforces the idea that wine is a great product for influencer marketing: "Wine seems predestined to benefit from this in a special way. It is a very emotionally loaded product. Anyone who consumes it usually has an opinion and is often willing to share it with others. In contrast to complex and difficult to handle products, wine is approachable intuitively and can be appreciated by engaging only our instinctive senses. The transformation of communication media and the level of interaction this is producing could thus open new opportunities for the wine business." A 2013 presentation sponsored by the Silicon Valley Business Journal states that "The number one reason that people buy wine is based on recommendation." On a similar note, during a presentation at the Wine Vision Conference in London in November of 2013, Tessa Barrear of the advertising agency Lexis noted the importance of remembering that "everyone now is a potential influencer for your brand. The key is to get that one to one communication with consumers so that they recommend your brand to other consumers. Make them your advocates." The more advocates that you have, the more their recommendations will directly impact sales.
Word of mouth or influencer marketing is not new, but with the rise of the internet, this type of marketing can be done fairly quickly and effectively. In a previous blog post, I wrote about how Barefoot Wines was launched and built through word of mouth marketing; however, building that brand took several years as the internet was still in its infancy. Before the rise of the Internet, social influence was limited to word of mouth only and reaching many of the people who might be influencers in the world of wine was notoriously difficult. Today, because of how inter-connected everyone is online, word of mouth is amplified and can spread very rapidly far beyond local networks by people whom are relatively easy to find and engage. The 2012 Wine Market Council annual consumer survey reported that the majority of wine drinkers get their wine information through the Internet; 65% of consumers who drink wine at least once a week, and 40% of those who drink wine less often, receive their wine information from the Internet. The implications of this recent rise of internet connectivity among wine lovers was made clear by Liz Thach & Dani Kolb in 2013: "Since there are more than 10,000 labels on the market, wine can be especially confusing, and therefore consumers often rely on experts and friends to help them determine which wine to purchase. In the past, they consulted books, magazines and newsletters, but more increasingly they have turned to social media to seek advice from friends and experts in order to reduce the risk of buying a dissatisfying wine or having a poor experience. Indeed, statistics from Google search engines shows that “wine” is one of the keywords that appear at a higher level than many other consumer products." Nielsen reported in 2013 that 68% of consumers trust online opinions from other consumers, which is up 7% from 2007." As a wine marketer, ask yourself just how many consumers are influenced by your off or on-line advertising? As Deb Eastman of the customer loyalty firm, Satmetrix notes, "Consumers are not influenced by your ads on Facebook. Friends, family and consumer reviews increasingly influence them."
But, isn't influencer marketing in the wine industry simply a matter of sending out wines to critics who give reviews? The answer is unequivocally "no". While critics and good scores are important, the sheer number of great scores that are being awarded today make it difficult wine to stand out even with a great score. As the 2012-2013 State of the Wine Industry Report noted in 2011, 5,000 US wines received scores of 90+ from Wine Spectator and 125 wines from Napa Valley alone scored 95+. Thus, a great influencer marketing campaign for a wine brand would include traditional critics but also reach other individuals who exert an influence within desirable networks. The importance of going after influencers was discussed in a May, 2014, Working Paper presented to the American Association of Wine Economists. The paper focused on a wine networking site and provides "empirical evidence that there is social influence on private wine evaluations that is greater than the effect of experts’ ratings and prices combined." Also, the writers note that "Together with a lack of evidence that more credible or expert members have more influence, these findings suggest that influence in this setting is normative rather than informational. Results have implications for widespread effects of social influence on consumer and other websites where we are subject to the power of other opinions." An article in the July, 2013 Harvard Business Review (can you tell that I love that publication?) put it quite succinctly: "One thing we’re seeing, though, is that people are beginning to be influenced by their peers more than by experts." Robert Cialdini, Professor Emeritus of Psychology and Marketing at Arizona State University, affirms this key paradigm shift, "If you look at TripAdvisor or Yelp, you find that it’s not travel writers or restaurant critics who are influencing others’ choices. It’s people just like you and me, who can now report on their experiences."
Adopting an influencer marketing program to quickly launch a wine brand or to help grow an existing one requires that wine marketers think differently. Bill Lee points the way to how to think about this type of marketing in an article published in 2013 in the Harvard Business Review: "Who sells your products or services? This may seem like a silly question, the answer being of course, the sales & marketing team. But increasingly, the most important person selling what you’re offering is — your customer. More specifically, your customer advocates." Shiv Singh, SVP Global Brand & Marketing Transformation at Visa Inc., and a strong believer in influencer marketing recently remarked that “The purpose of a business is to create a customer who creates customers.” As Fred Reichheld reminds us in the article, “The One Number You Need to Grow”, "...the value of any one customer does not reside only in what that person buys. In these interconnected days, how your customers feel about you and what they are prepared to tell others about you can influence your revenues and profits just as much."
In future blog posts, we will discuss various strategies and tactics for carrying out a successful influencer marketing program for rapidly building a wine brand. I invite you to read the following case study that outlines one highly successful brand launch that used an influencer marketing campaign.