• August 1, 2012
  • By Ian Jacobs, vice president and research director, Forrester Research

In Vino Veritas

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One of the sincere joys of living in San Francisco is the city's proximity to California's justifiably famous Wine Country. The Zinfandels of Sonoma County and the Cabernet Sauvignons of Napa County flow like tap water a little more than an hour's drive from my house. Although temperance can quickly become a problem, finding somewhere to get good, small-production wines will never be an issue. In fact, to best take advantage of the offerings of two of my favorite producers, I have recently joined their wine clubs.

Wine clubs were an unfamiliar concept to me before I began drinking wine, but the idea is simple enough: The consumer commits to purchasing a certain number of bottles of wine in a set period (often four bottles three times per year) and, in return, receives a discount on every bottle purchased and some other perks as well, such as members-only parties, dinners, and exclusive access to special-release wines.

These clubs provide a great analogy for a broad view of customer experience inside enterprises of all stripes. CRM practitioners have long heard the message that every function inside an enterprise can, and should, be seen as a customer service function. I remember trying to explain to a company's maintenance staff why clean bathrooms and hallways should be seen as good customer service. With their wine clubs, some wineries get the concept that customer experience transcends customer service and is fed by every part of the business. Some also, unfortunately, do not get it, just like their counterparts in other industries.

Let me give you some examples from both the "get it" and "don't get it" camps:

Shipping: Most wine clubs allow members to either pick up their wine shipment at the tasting room or have it shipped to their house. One wine club I ran across, however, will only hold the shipment on site for 45 days and, if it's not picked up by then, will automatically ship it, even if the customer says he was planning to pick it up. At the other extreme, a staffer of one of the wine clubs I belong to told me they are happy to hold the wine, essentially, indefinitely. This is a shipping issue, but clearly impacts the customer experience.

Sales: One of the common perks for wine club members is that while the general public must pay between $5 and $15 per person for tastings in the tasting room, the experience is free for members. This clearly impacts the customer experience. To extend the analogy even further, since many wineries allow members to bring guests for free tastings, the wineries have cottoned to the idea that sales-driven experiences can help turn loyal customers into advocates. Additionally, although workers in most tasting rooms receive commissions for sales, the staff tends to forgo any hard sell for club members. Again, this clearly falls under the banner of customer experience.

Service: Although my main point is that customer experience goes far beyond customer service, service still holds pride of place in the overall customer experience. Wineries undoubtedly understand this. Wineries could view their wine club members in a few ways. They could take the view that wine clubs provide recurring revenues in the same way that customers of software-as-a-service providers do. This would make wine club members part of the pack, with no real differentiation from any other customer. But wineries, focusing heavily on providing a differentiated customer experience, choose a friendlier view when they elect to see wine club members as akin to the elite tiers of customers in airline loyalty programs.

Although I have given examples from the shipping, sales, and service angles, the wine club analogy could easily be expanded to the realms of marketing, operations, branding, billing, and even human resources (tasting room employees, after all, must taste wine all day and still provide great service). Enterprises could learn a lot from wineries and their wine clubs, and not just about how to have fun while working.

Ian Jacobs is a principal analyst on Ovum's Enterprise team. He can be reached at Ian.Jacobs@ovum.com.

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