D2C Is the Only Time I Want to Be Sold
Because These Sales Are Enabled by Story Telling and Hard Work
“in vino veritas”
I never spent any time in D2C sales. As a consumer, though, I have experience, and I find some aspects appalling, others irritating, and a few fascinating. Like the fact that direct-to-consumer sales is a business model based on the sale of products to the end customer without intermediaries. And so I get to interact directly with the producer or manufacturer, either in person or through their own eCommerce channel.
To the producer or manufacturer, the D2C business model offers a variety of benefits, things like:
More control over price and a higher gross margin.
They can sell with their brand story, not just with price and label design.
More control over the packaging and shipping.
More agile and direct in developing and testing new products and services.
More customer data.
As there is direct interaction, similar benefits exist for the consumer. For me, most memorable and beneficial are the D2C purchases I make in person. Like buying a piece directly from the artist or craftsman (https://lisaburge.com/), visiting a local bakery and learning how they are milling their own flour (https://www.slobreadbike.com/), or understanding the impact of weather on the availability of fruits and vegetables at our farmers market (https://www.slocountyfarmers.org/); each experience gives me:
appreciation for the work that went into the product,
allows me to recount and re-tell the story,
gives me a sense of giving my money directly to the source,
and I feel my input and suggestions are actually being listened to.
Two additional D2C in-person sales experiences I enjoy are wine and olive oil.
WINE (https://ragtagwineco.com/)
The majority of wineries today focus their business model on growing their direct-to-consumer (D2C) business. At the core of that strategy is converting winery visitors to club members, where they will receive extra care, focus, and attention, and then are retained as loyal customers. Selling wine club memberships, in addition to on-the-spot wine purchases, are the core job duties of a wine industry professional.
“Direct-to-consumer (D2C) sales in the wine industry are through the roof. The D2C wine sale market brought in $3.1 billion in 2017 and is expected to reach $5.2 billion in 2022. Currently, 62% of wineries consider D2C to be their fastest-growing sales channel; in fact, while it makes up less than 10% of total sales, it makes up an estimated 20% of total profit.
Why? Because wineries selling direct-to-consumer yield higher profit margins than sales to wholesalers. For small businesses, this opportunity is even more significant. According to the same Silicon Valley Bank report, small wineries’ gross margins are doubled by selling direct-to-consumer.” (Oztera)
So, what motivates people like me to join a winery club? Here are a few reasons, some representing a professional view, some a more personal one (and please do not judge). Some speak to the quality of the people, and some are circumstantial:
Deep discounts on wine purchases. It might be a 20% or 30% discount applied, though, on a really high list price. If you think of the margins mentioned above, buying at those list prices seems crazy.
Proud to be a member. A club is perceived as exclusive and trendy. It also offers a sense of belonging, and that is a powerful motivator to anyone.
Scarcity. Small wineries have limited production that is allocated for club members only, another powerful motivator. The winery may offer a few of its top wines on an exclusive basis to club members as a tactic to motivate buyers.
Exclusivity. Especially the wines of smaller wineries are unavailable through retail channels or in restaurants. The only way to buy them is at the winery or through the wine club.
Location. I have yet to visit a winery that is in an ugly location. They are all stunning, with great settings, amazing views, as well as features like caves and food pairings. Grapes also require sunshine to grow.
Parties and more. Every club has more to offer than just wine: release parties, grape stomping, vacation homes, etc. Club members feel like they’ve discovered a hidden gem that gives them a sense of accomplishment.
Being treated well. All salespeople take note because that is a powerful motivator, which is where exemplary hospitality skills come into play. The cost of an extra glass of wine is marginal compared to the value gained over the years from a new club member.
Look behind the curtain. Wine club members are made to feel like part of the family when winery owners, winemakers, and staff get to know them and greet them like old friends. It's great fun for wine lovers to be ‘insiders’ who get a look behind the curtain!
Discover New Wines. Most clubs offer a service where they will pick the wine for you based on your taste preferences. Along with being a nice surprise, this also strips out the decision-making process. Week after week, drinking the same old Rioja or Sauvignon Blanc? Did you know there are over 10,000 grape varieties out there?
Wine makes people happy. This is where alcohol comes into play. The sale happens AFTER the tasting, and even mediocre wine contains 12-14% alcohol.
Frankly, I have fallen for any one of those motivators.
OLIVE OIL (https://www.pasolivo.com/)
Recently I encountered another excellent example of D2C salesmanship at an olive oil farm. Their approach is like those of wineries, though they do lack the 12-14% of ‘happiness’ that wine contains.
Olive oil, however, has ridden a wave of increasing popularity in recent years, in part due to growing awareness around the health benefits of the Mediterranean Diet. Some label extra virgin olive oil the liquid gold of the food world. Just add a quick drizzle of rich and healthy oil over a slice of crusty bread or bowl of ice cream…
According to Nielsen, retail sales of olive oil in the U.S. have been increasing steadily for the last several years, currently totaling about $1.2 billion.
It's easy to pick up some olive oil at your local grocery store. But there is also a lot of rancid or adulterated olive oil in the market, meaning it's blended with cheap, lower-grade oils, and most of us don't even realize it.
That's where the farm-to-table transparency of buying it directly from an olive oil farm comes in handy. But since that alone does not sell the product (since no product sells itself), here are some of my observations of their great salesmanship:
It does start with a great product. Salesmanship, however, is required because consumers, in general, do not really know what makes the product great. The very knowledgeable staff made a difference for us. Every single person we interacted with during several visits was able to answer the questions we asked and do it in a way that allowed us to relate to the answers.
Add passion to the knowledge. For a consumer asked to spend significantly more on seemingly the same product at the source than in a supermarket, passion helps to bridge the gap.
In D2C, friendliness ought to be a given, though I have had my share of either outright rudeness or just a superficial layer of friendliness. Here, they made us feel genuinely welcome, whether as their single client at the time or during the busiest day of the year.
The team also repeatedly asked and offered to bring any other flavor, revisit what we had already tasted, as well as offer more bread, more water, more spices, and more kinds of vinegar. The cost of this seemingly generous gesture pales in comparison to the benefits of the now almost certain sale.
There was transparency. With harvest in progress and the mill right there on the farm, we could walk around and see the process for ourselves. And every person we encountered was again knowledgeable, passionate, friendly, and generous with their time.
Like wineries, olive oil farms are always located in a beautiful part of the country; they enjoy sunshine, and the setting for the tasting makes me want to stay.
With the tasting outside on their patio, the invite to come into the store was subtle and did not feel forced, certainly not like the museum giftshops that always seem to be in the way when looking to exit.
The store was not overloaded; all items were thoughtfully selected and aligned well with the core product, the olive oil.
Equally subtle was their way of inviting us to join the club (which we did). At that point, it was not about the discount; it was about continuing the relationship built and being able to share the products and the stories with friends and family back home. So, I was not surprised when I learned about their 36% conversion rate of visitors to club members.
When I purposely travel to visit a place like an olive oil farm, I want to be sold. Being sold is a mental state where I am 100 percent convinced that a product, idea, brand, business, method, or philosophy is right for me. There still is a tremendous opportunity for many businesses to achieve higher revenues by improving customer service and the buyer's experience.
Talk to us about learnings from D2C that apply to your business.
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Lynda Paulson - Selling Wine Club Memberships
Oztera - A Guide to Wine eCommerce
Photo by author and Lena Kulle