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In The Winery
1. Essentials: Necessary for survival or perceived as #2 Move budgets toward measurable channels that
central to well-being. fit with customers’ digital lifestyles:
2. Treats: Indulgences whose immediate purchase The Harvard Business Review article report-
is considered justifiable. ed during the recession of 2008, marketers
spent +14% more on online ads than they did
3. Postponables: Wanted or needed items whose over the same time frame in the previous year.
purchase can be put off. Even before most of us were asked to “shelter
in place,” our purchasing behavior had shifted
4. Expendables: Perceived as unnecessary or significantly to digital platforms, driven by tech-
unjustifiable. nology advances, access, and convenience. For
marketers, the shift allows us to surgically tar-
Wine is a luxury item no matter which way you get, show results, and pivot quickly. Even with-
slice it. But your price point and your target will fall out a recession environment, marketing depart-
into one of these four segments, and your product ments are under pressure to do more with less
into one of these four prioritizations. Are you a and demonstrate high returns on investment.
high-priced allocation wine that mostly sells to the Digital advertising is targeted and relatively
comfortably well-off that are comfortable spend- cheap, its performance is easily measured, and
ing money online? Or are you a strong on-premise it is where our customers live.
brand for the pained-but-patients that would ben-
efit from positioning yourself as an affordable treat #3 All businesses will increasingly compete on
in these uncertain times? price:
Wine over $20 is best targeted at the Comfortably You may think that discounting is in opposition
Well-Off (our traditional wine club target audience), of #1 – but we didn’t say don’t offer discounts,
and the Live-For-Today-Segment (our emerging we said don’t discount outside of what your
target, and typically our tasting room traffic) and brand would typically offer. Also, watch the
should be positioned squarely in the treat/afford- frequency as you will likely feel pressured to
able luxury category. increase the frequency of temporary price pro-
motions. Three tips here:
So, how do we sort through all of this to create
marketing and advertising campaigns and programs a) The article notes research shows discounts
that recognize your customers’ psychological and that require little effort from consumers and
emotional state? Here are my recommendations: give cash back at the time of sale are more
effective than delayed value, or “buy more”
#1 Support your brand by staying true to yourself: promotions. Look for the quick benefit, keep
it easy, and keep the barriers low. Know
Look at your current plans through the lens of your average order value. If your customers
“would my winery do this if it wasn’t a crisis?” are used to buying 4 bottles an order, a case
Tweak your messaging to dovetail with the psy- offer might be pushing it.
chological and emotional pressures your target
market is feeling. When sales start to decline, b) Make sure you sign up for lots of mailing
the worst thing companies do is alter their lists and carefully monitor consumers’ per-
brand’s fundamental proposition. If you have ceptions of “normal” price levels. As an
a high-priced and valuable wine, you may be industry, we need to watch over ourselves
tempted to decrease your price. This may con- and not create “a new normal” that we
fuse and alienate loyal customers. Drifting away can’t sustain. Excessive promotions lead
from your established base may attract some consumers to revise their expectations
new customers in the near term, but you will about prices and this threatens profitability
find yourself in a weaker brand position when in the recovery period. People will resist the
the crisis is over. Your brand can acknowledge steep increases as prices return to “normal,”
the new world but fundamentally should remain and extreme price deals only lead to costly
unwavering. price wars.
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