I went to a wine event today in New York for the Bordeaux wine region. While there, I asked the representative of one of the wineries, “What’s your strategy for the U.S.?” She responded, “Strategy? Why do we need that?” I gave her some reasons but the conversation didn’t go very far.
When I returned to my office, I got an email from the Pew Research Center titled “Experts rank the top 10 global trends.” When I clicked on the link, I found a report from the World Economic Forum on the 10 most important global trends based on a poll of 1,592 leaders from academia, business, government and non-profits. Here’s the list:
- Rising societal tensions in the Middle East and North Africa
- Widening income disparities
- Persistent structural unemployment
- Intensifying cyber threats
- Inaction on climate change
- Diminishing confidence in economic policies
- A lack of values in leadership
- The expanding middle class in Asia
- The growing importance of megacities
- The rapid spread of misinformation
So what do these trends have to do with something as everyday as buying a bottle of wine? Plenty.
It’s great that a provider of any product or service believes theirs is the best but neither consumers nor b2b markets think in linear terms. Every decision is made in relation to another. If I’m nervous about the state of the world, that will effect how I make decisions, and what and when I buy. If I’m an importer or distributor and concerned about unemployment and the impact of economic policies, I may want to hedge my bets with tighter inventory control. As people focus on the macro trends that affect us all, how companies approach the environment, social responsibility and their own governance (ESG) effects our perceptions of their brands. It goes on and on whether you’re a consumer or corporation (remember, somebody once said, “Corporations are people, my friend.”)
If you don’t have a strategy that helps you wind your way through this maze or a brand with values that reassure consumers and customers, you’re dead in the water and it won’t matter how many fancy events, e-newsletters or facebook followers you have.
Something else was interesting to me at today’s Bordeaux event. As I went around and asked people about their wines and what makes their winery better than the rest (to which there were a lot of blank stares), nobody asked any questions about me, about my tastes, concerns, or needs. They may as well have been Enomatic wine dispensers with an information rack underneath. Most handed me a sheet of paper about their wines in answer to my questions anyway.
There was neither strategy present nor any attempt at customer engagement. I imagine the woman who asked me why her company needs strategy poured a lot of wine today. At the same time, it wouldn’t surprise me if at the end of the day, she moaned about some of the trends on the list and how they were making life more complicated. That’s too bad. Strategy is the direction that helps us wind our way through and around those trends and we all give our loyalty to those that help us do that.
FutureShift asks a lot of questions and listens carefully so that brands and strategy resonate with customers to increase their engagement and loyalty. It works.
Tags: Asia, Assumptions, Bordeaux, Bordeaux wine tasting, brand loyalty, climate change, Corporate Myopia, Corporations are people, Customer engagement, Customers, cyber threats, economic policies, Enomatic, ESG, facebook, futureshift, Global Trends, income disparities, Individualists, Leadership, linear thinking, Marketing, megacities, middle class, Middle East, misinformation, Mitt Romney, my friend., North Africa, Outcomes, Positioning, relational thinking, Rising social tensions, Situation Analysis, Strategy, structural unemployment, Trade Associations, U.S. Marketplace, Values, Winning, World Economic Forum
I agree with your summation and would like to add a bit further. Picking on Bordeaux is easy, but it is amazing how many wineries from other cultures and countries that know they have to aggressively market their wines still have no ability to verbalize strategy. As an importer and National Sales and Marketing company have to get a little more specific when looking at future partners, I ask them; what is the winery’s essential brand message (value, sense of place, key varietals, etc), and follow up with; what are their top 10 selling propositions? I don’t mean to put these hard working wineries on the spot, but like you, I too often get back blank stares. Wine families take years, decades and generations to produce great wine – take a little more time to look at the industry trends, cultural trends, fiscal trends, and your defined competitive set in the markets you want to go into and hatch a plan. We have to do this 50 times just to market in the U.S. Gillett
Great comment and it applies to so many products out there. Wine is just one example. This morning I got an email from another consultant who wrote this: “Today, according to the new wisdom from the startup culture, we don’t need strategy anymore. All we have to put out a minimum viable product and if it does not work, just pivot, if that does not work pivot again and again.” So many businesses are skipping the need for strategy and also to (1) ensure that their strategy is understood within their own company; (2) that their team and extended stakeholders can express it and act on the strategy; and (3) that it is relevant to the markets they’re trying to reach. There’s a famous Michael Porter quote that I’m paraphrasing but it is something to the effect that strategy only has meaning if it is reflected in your operations. And as you’ve pointed out, this is far from an academic exercise. It pays off awareness, customer engagement and loyalty, sales and ultimately, growth.
Jon – thanks for this article. I teach an online international wine business class for Sonoma State University and just shared the link with my students around the world. I know of no industry that is so out of touch with consumers as the wine industry. In most industries the cry, ‘we must educate consumers to use our product’ is the kiss of death in the wine industry it is deemed to be the golden rule.
I am often amazed with the success of wine given the amount of mystification, misinformation, overwhelm and intimidation associated with the product. Your comment, “nobody asked any questions about me, about my tastes, concerns, or needs” is so indicative of and industry that disenfranchises millions of consumers based on their preferences and often openly mocks consumers as naïve, unsophisticated, uneducated or just plain ‘beginners.’
Thanks for the article – the wine industry is ripe for some massively disruptive change! AND, when it occurs, could account for the greatest positive growth for the wine industry imaginable.
I could not agree with Tim H. more. As a former NSM for several wineries and a current independent broker, I focus on content/marketing/strategy/sales. Many wineries tend to focus on doing a “good” job making a “good” wine in a “good” package, and assume that they have done all they can to create sales. Creating a great product is just the beginning of the sales (and retention and re-order) cycle. There are SO many tasty wines out there now that quality is almost a given. Targeting your audience, creating compelling content, engaging the gate keepers and consumers, seeking feedback and evolving your strategy and tactics to reach your goals….that is the new paradigm.
Great comments from both Tim and Ron. While I think we find the wine industry to be particularly tactical, there seem to be many industries where company management acts similarly. I think it’s most prominent where there are a lot of market entrants, perhaps too many, equivalency in quality and insufficient demand (even slowly rising demand could be insufficient). In those situations, companies often believe the most urgent thing they can do is best. As a result, we see more new packaging, more social media, and more broadcasting of the internally formed messages. The media feeds into this because it sells more advertising and PR firms tend to make their clients louder rather than more strategic because they don’t want to jeopardize client relationships. At the same time, the most successful companies have done customer research, spent a lot of time developing their strategy and their tactical programs are invested in getting their strategic message understood internally, by all of their stakeholders and their target markets. There is a tremendous opportunity for small to medium size companies to break through the clutter but as a consultant who sells the idea of asking lots of questions and then thoughtfully forming a direction that can then be implemented, it’s tough to break through that internally focused tactical wall.
Let’s give the poor pourers a bit of slack. Bordeaux Wine would have demanded distributor or wholesalers to front up with pourers. The distributors or wholesalers would have pushed junior reps into pouring wine. As we know many of them are representing scores of brands and don’t know them as well as they should. If this was a New York Finger Lakes event then the winery sales manager or even the winemaker or owner may have come down, and if they couldn’t these questions then your post’s introductory point would have been valid.
Otherwise I agree with the above commenters and the general point of the post. If you’re struggling to deal with distribution constipation, felt traditional media influence wane, and watched your competitors runaway with DTC — it may be time to map out a new direction.
Thanks Bruce. I got similar responses each of the 6/7 times I asked and there were people at different levels, some highly trained. I just chose one to write about and make the larger point. It’s not about Bordeaux. It could have been any wine region or other products, for that matter. My guess is that Bordeaux does have a strategy as do many similar producers but it’s only as good as the way it’s expressed and how you train all of your stakeholders to repeat it. Shouldn’t the junior rep be told something to tell people? Or better yet, something to ask? If it’s management that is simply throwing them out there and not preparing them, how can they expect to get people (trade or consumers) to retain anything about the product? To make a good strategy work, everyone has to be rowing in the same direction.
Resounding agreement w Tim and others…as backward an industry Strategy-wise as I’ve ever seen. Interesting that so many successful execs seem to get amnesia when they move into vino. But I won’t blame the pourers – how would they know? Like Tim, I also teach at SSU, and there is a new generation of thinkers coming into the biz …it will get better
J
In other industries, “strategy” will often focus around the product line(s) they are producing, trying to match demand that is out there in the market. I guess the Bordeaux wineries give you blank stares because they can only produce a certain type of wine – the vines they have are, after all, really producing great quality if they are 20, 30, 50 years or older. Thus, there is no way of changing the product, other than optimizing the production in the cellar. Thus, “product line” strategy does not work at all in this business. Bordeaux is different: terroir is everything, i.e. the vines produce grape from a given soil in a given climate. Sure, like some large new world producers, you could buy fruit from others, blend wines with other wines etc. – but then, a winemaker would give up the biggest asset that they have, i.e. “their” product which does taste different from others, and which has some variation year on year. Bordeaux wines are not Coca-Cola, and Bordeaux winemakers are not trying to make their wines taste the same year on year.
That said, anyone in the industry must, of course, realize that the oenologues have done a superb job everywhere in the world, so that there are (as has been said before) many many great wines out there. Consequently, a strategy focusing on presence in the (geographic and consumer) markets where some growth may still be possible would certainly help.
I think your latter point is a good one. There is so much good wine out there at competitive prices, why should anyone show loyalty to one region’s products versus another? If knowledgeable trade people can’t provide a clear response, why should we expect less wine-experienced consumers to? I would have been happy if in response to my questions someone would have simply said, as you’ve stated, “terroir is everything.” That would have given me something to attach to the region, which is certainly better than “Bordeaux under one roof” as expressed in the tasting event booklet. That just says, “there’s a whole lot of wine in here.” I can go to any wine store for that.