The ROI of Social Media in the Wine Industry Part 1

-this was originally posted Oct. 2010 on an old blog that has since been moved-

When a winery wants to make wine, they need to find a good vineyard to get their grapes from.  The winery can either plant their own vineyard, or they can buy fruit from someone else.  If the winery decides to plant their own vineyard, they know it’ll be a few years before they’ll see any useable fruit from the vines.  The reason for that is grape vines need about three to four years of growing to establish their roots.

Fruit produced within the first few years would not have all the components of what grapes need to produce good wine.  The roots below the surface play a big role in the quality of wine grapes.  The farther down the roots go, the more nutrients are pulled up through the vines to produce better wine grapes.  If a winemaker tried to make wine from young vines, there would be bad offputting flavors in the wine.  That’s why wineries make a big deal about the age of vines, or “old vines” because older vines produce better wine grapes.

The money invested in a vineyard doesn’t see a return on investment for years, but when the vineyard is nurtured organically, the vines grow, and eventually they’ll produce fruit year after year.  It’s the early stage of development that require patience.

 

Establishing a social media presence is similar to planting a vineyard.  When a business creates a new profile on a social media site, it’s like planting vines.  You start with zero contacts, then gradually over time that number grows.  When the social profile is nurtured and grows organically, it’s setting the stage for better “fruit” down the road.  For wineries (and many businesses), establishing their brand on multiple social sites creates social brand synergy—meaning they feed off of each other.  And like a vineyard, social media requires upfront investment of money that will produce fruit year after year.  Luckily, it won’t take years for the return to be realized.  Months maybe, but not years.

The #1 question business owners want to know is what’s the ROI of social media.  This two-part series will answer that question using examples from the past year and a half.  I’ve had the good fortune to be the first person hired into the wine industry as a Director of Social Media Marketing at St. Supéry.  There’s been quite a bit of trial and error in all aspects of the winery.  The analogy of planting a vineyard is the best way I can communicate how the ROI is realized.  Here’s how it works:

First Step – Plant the Vines (establishing a social presence)

As mentioned above, a business needs to have a presence on social media sites.  Not because it’s trendy, but because your customer is becoming more social online.  Businesses need to innovate or die.  Each social site provides one more channel in which to communicate your brand message.  I’m not going to tell you this social site is better than that one.  But rather, I’ll suggest each business should work to establish trust online, and pick which sites they feel comfortable with.  For many, that means Facebook and Twitter because of how many consumers are on there.  YouTube, Foursquare and blogs are also popular ways to establish trust.

Social “Currency”

When thinking about what the ROI is going to be, it’s important to note what is of value online.  The word, “currency” has different meanings, especially in social media.  The idea of CRM is evolving into sCRM (social customer relationship management) where social currency has a great deal of value whether it’s U.S. dollars or online trust.  If done right, online trust can be converted into dollars.  Inpart two of this series, I’ll share some case studies where online trust (social currency) was converted into U.S. dollars.

I look at growing vines in a vineyard the same way I look at growing trust online.  Once a consumer“opts in” to a brand (or winery) it appears as a follow on Twitter or a ‘like’ on a Facebook page.  More importantly, it’s the beginning of a relationship.  The amount of trust the brand builds with the consumer depends on how strong their social media team is.  There’s an art to conversing with people online.  If you do it right, you build a great deal of trust, which in turn is converted into dollars much like a vineyard producing fruit.  Social “currency” is other things too like message reach, influence, noise/signal ratio, etc..  The best barometer of social currency is Klout.  You can see anybody’s online “value”.

Customers aren’t just customers any more.  They’re ambassadors.  Social media’s power is the ability to create intimate relationships between brands and customers.  If they trust you, they’ll be more dedicated to your brand, and will influence people they know to also want to be your customer.  That’s not just currency, that’s gold.  That’s ROI on steroids.

Complimenting Existing Systems

Most companies already have a valuable asset — their email database.  New social tools are getting closer to merging email lists with social profiles.  An email database of 10,000 people is not much different than having 10,000 Facebook fans, generally speaking.  Social Media isn’t meant to replace anything, but rather compliment it.  Approach your email list with the idea of building trust and social currency.  The email campaigns and messages should be one spoke on the wheel using the same voice, but also remembering people can opt in, or opt out of what you have to say.  Kick start your ROI by having a complimentary balance between email and social profiles.

“If they trust you, they’ll be more dedicated to your brand, and will influence people they know to also want to be your customer.  That’s not just currency, that’s gold.  That’s ROI on steroids.”

For businesses and wineries wanting to realize the ROI of social media, the vineyard analogy is the best example of how to approach it.  You hire a vineyard manager and trust that person to tend to the vines with their team.  There are good vineyard managers, and there are not.  Vineyard managers have a “touch” or a gut instinct about things.

Growing a successful social media presence is not only necessary, but it too requires a person or team to tend to the online conversations each day in order to keep growing trust.  Each person who “opts in” is one more potential customer.  A good social media person has a gut feel on how to converse with people online.  In part two I’ll describe the personal brand vs corporate brand balance we had at St. Supéry and how that produces results.

3 Responses to “The ROI of Social Media in the Wine Industry Part 1”

  1. February 10, 2012 at 10:53 pm, Jameson Fink said:

    Rick,

    I really like what you have to say about customers as ambassadors. I think one of the most powerful aspects of social media happens right in the beginning of the interaction with a business/brand: the opt-in. People are choosing to follow your brand! Who wouldn’t want to start a relationship in that manner? (Rather than the “spray and pray” model.) You just have to make sure you keep your ambassadors engaged and interested after that. (No small task…)

    Looking forward to Part 2.

    Jameson

    Reply

  2. February 11, 2012 at 12:45 am, @olinjoseph said:

    Rick –

    I would love to agree with you on some of these points, but in general this post is a bit misguided. W/O dissecting, let me at least offer a few words of my own wisdom:

    #1 – This article claims to have an ROI to social built-in. It doesn’t. I understand your point (plant before you harvest), but the reality is that you haven’t demonstrated a value for your harvest. ROI can’t be calculated with the “R”. I hope you find a way to track this…

    #2 – In the agency world.. the most difficult exercise isn’t explaining the importance of social media, it is demonstrating how & why it is worth of certain “budget allocations”. There is no such thing (in business) as “plant now” count 3 years from now. The reality is, that’s 36 months of profit you have to speak for.

    #3 – (and I’ll stop here) An email database of 10k isn’t much different than a social presence of 10k. I hope you change your opinion on that soon, or it will bite you. Yes, they’re different. Very different. In fact, usually in terms of audience segments and purpose they’re extremely different. The key to success is to cross-pollinate your marketing. Learn from each channel and use it to your advantage. But never approach email as a form of social currency. Email=Direct Response. Generally ALWAYS.

    Good work.. stay with it. Just write to a much more targeted audience. From a national/regional POV – we could never get away with this.

    Best.

    Reply

  3. February 14, 2012 at 8:52 am, Max said:

    This is a good start Rick. Thank you!

    Reply

Leave a Reply