The customer service team, who handles calls and emails from existing users, cautioned against changing any existing clubs, saying that many customers were highly satisfied with the offerings. However, they did note that lower cost alternatives could increase retention among drop-outs, as customers often transition from high to lower cost clubs.
Don't Risk Losing Club Members
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Similar to the customer service team, the sales team loved the idea of a club with lower cost shipments. They noted that it's much more difficult to sell a customer when you start them off with a $250+ transaction and specifically requested a club that cost <$75 per shipment. They specifically chose $75 as the guideline number as it aligns with the average spend/transaction.
Visitors Need a Lower Cost Option
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The sales team noted that other local wineries/competitors allow substitutions and exchanges in their club shipments. They asked whether Noceto could do the same, noting that it's their job to keep customers happy, and this is a great way to upsell to more wine during the exchange transaction. They were also willing to handle more complex POS exchanges to make this possible.
Allow Substitutions in Shipments
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Growing Wine Club Subscriptions
Reshape & refine Vino Noceto's wine clubs in order to increase conversion and retention rates.
objective
the details
Timeframe: 4 weeks
My Role: Project Management, Research, Design Oversight
Sector: B2C Subscriptions, Wine
Tools: Qualtrics, Excel, Adobe InDesign, WineDirect (CRM)
summary
After 30 years of sustained growth in membership, Vino Noceto's wine club had stagnated. This project sought to strategically assess and restructure club offerings in order to improve conversion and retention.
*Note that growth rates typically and naturally decrease over time as a club grows. For example, if a club consistently increases in size by 500 members per year, its growth rate will still decrease each year. However, a sustainably growing winery typically hopes and expects to maintain a growth rate around 10-15%.
problem
Club Growth Stagnated & Decreasing
Membership Down
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When I began this project, club cancellations exceeded sign-up rates. This trend was particularly alarming as Club Member purchases – valued at $507/year – account for 69% of all DTC revenue.
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Investigations of retention and conversion rates suggested that the stagnation was due to decreases in both retention and conversion.
research & findings
Survey: Customers Care Most about Wine Quality, Customer Service, Waived Tasting Fees, and Wine Prices
Most Customers Extremely Satisfied
I created a survey for customer feedback on Noceto's club offerings. The survey was distributed via email to over ten thousand recent visitors and buyers. To maximize response rates, respondents were offered entry into a raffle for a $1 case of wine and told that the three most informative answers would receive a $1 magnum of wine. (Except in the case of donations, wine cannot legally be given for free, so instead, we gave the deepest of discounts.)
Composition of Respondents. A total of 334 users completed the survey. Just over half of respondents (54.3%) were current Noceto Club Members. Demographics skewed older, with 60.8% over the age of 54. In addition, the majority (56.7%) self-reported as female.
Quantitative Findings. The four highest valued factors (Wine Quality, Customer Service, Waived Tasting Fees, and Wine Prices) were rated as "Extremely Important" by over 70% of survey participants. Even the least valued of the twelve factors (Club Parties/Events) was rated "Extremely Important" by 23.3% of respondents. This suggests that all twelve measured factors play an important role in club membership.
Qualitative Findings. The most exciting results were found in the open-ended responses. While approximately 75% of participants waxed poetic about Noceto wines and current wine club offerings, about one-in-four had thoughtful critiques. The negative feedback generally fit into three categories.
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Too many $$s per shipment. The first set of productive, negative feedback concerned pricing. At the time of research, Vino Noceto's Wine Clubs all included 1-2 annual shipments (6-12 bottles per shipment). This means that each shipment averaged over $250. Customers requested that the winery split shipments to reduce up-front costs. In other words, they preferred four smaller shipments per year, rather than two large shipments.
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Not enough variety. When research was completed, all of Noceto's clubs were wine-specific (e.g. a Sangiovese-only Club, a Moscato-only Club). Customers wanted access to more variety.
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Reduced quality in customer service. Some respondents, including those with otherwise positive responses, noted a reduction in service quality at the Tasting Room.
research & findings, continued
Sales People Agree with Survey Results
When doing consumer research, I often find that the most useful insights come from a company's internal team. From customer service agents to client managers to sales people, those interacting directly with consumers can often give a more accurate picture of consumer needs than consumers can themselves. To this end, I interviewed Noceto's sales and customer service team members to find out what they saw as the biggest strengths, opportunities, and risks regarding the club.
Feedback from the internal team was quite decisive. There was universal agreement on the three categories in most need of attention, and interview results matched customer survey data.
application
Adding a Fourth, New Wine Club
Plan 1
Add a traditional-style wine club, with 4 shipments per year and unlimited substitutions
I was hesitant to add a new wine club, as Vino Noceto already had three club options. (Psychology research suggests that three is the magic number for optimizing sales and decision-making.) However, club members clearly loved Noceto's existing membership tiers, so rather than replace the lowest performing club offering, we added a fourth selection – the Mixed Nut Club. (Noceto means "little nut" or "walnut" in Italian, and the most popular club is called "The Big Nuts".) The Mixed Nut Club offers four shipments per year, with three bottles per shipment. At launch, membership cost an average of less than $60/shipment. Note that shipping customers were condensed into two shipments per year due to weather constraints and shipping costs.
Plan 2
Redesign informational club sign-up sheets
In the redesign of Noceto's club sales sheets, we emphasized our top tier club, Big Nuts, then organized the three lower tier clubs in a trio. We iterated on the sales sheet over the course of three months until we'd reached a design that maximized conversion. The sheet was designed by Noceto's in-house designer, Anthony Pessagno, with my oversight and was on the back of every Tasting Menu. Design shown below.
Plan 3
Train sales staff to improve customer service
Customer surveys noted a drop in service quality. As such, I spearheaded two initiatives to improve the quality of Noceto's customer service. First, I initiated weekly meetings for the whole sales staff. In these meetings, employees across all organizational levels in Vino Noceto presented on business topics, like sales techniques to sign up club memberships and competitor research. In addition, I asked the winemaker to lead a monthly tasting session and cross-trained sales staff on vineyard and winery work. Simultaneous to these other efforts, I prepared all sales staff to take the prestigious CMS sommelier certification test, convincing key stakeholders to fund all costs related to the exam, including test fees and overnight travel to Nevada. Preparation for the exam increased the staff's wine knowledge and demonstrated the company's commitment to employee career growth, fostering stronger community and loyalty to the brand. Exam pass rate: 100%. Google Maps rating improved to 4.8/5.
Early Design Draft
Finished Design
results
Club Growth Skyrockets
club growth rate hit 17.2% in first year after Mixed Nut introduction
customer service ratings reach 4.8/5 on Google
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Mixed Nuts now account for 15% of all Noceto club members.
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Club growth skyrocketed after the introduction of the new club, with overall subscriptions growing by 17.2% in the first year and 10.2% in the second year. Sign-up conversion rates increased from 3.3% to 6.3% and retention rates increased from 77.6% to 81.1%.
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Customer service significantly improved. The entire sales staff passed the prestigious Level 1 CMS sommelier exam, and they received an average Google Maps rating of 4.8/5.
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Overall, the initiatives were wildly successful and club growth exceeded goals.
learnings
Don't Fix Things that Aren't Broken
Learning 1
Listen to your customers (but keep your answer simple)
Due to increased procedural burden, club administrators were hesitant to add a fourth selection. In addition, the rule of three (options) is powerful in sales, and we didn't want to overwhelm our consumers with too many choices. However, the customer voice must always carry the most weight. And while the vast majority of existing club members loved their club, a vocal minority sought something different. As such, it was important to add a new option rather than change existing offers. And in fact, the least popular of Noceto's wine clubs (and the one that would have been removed) remains equally large as the Mixed Nut Club.
Learning 2
Sales people are a key resource
Virtually every insight revealed by customer surveys was echoed by sales people. The sales team talks to customer all day, every day, and a great sales person knows what customers really want. In fact, as Psychology research would argue, there's often a mismatch between what users say they want and what they actually want. To that point, one of the best ways to get to know your customers is to spend time working on the sales "floor" yourself and observe real-time behavior and reactions.