Julie Rothberg

Using Data to Sell Wine DTC: The Case Study of Medlock Ames

Photo Credit: Ames Morison, California Wine Country

Photo Credit: Ames Morison, California Wine Country

“Facts also need curiosity.”

If you remember nothing else about this week’s post, please remember those words.

They were spoken by Julie Rothberg, President of Medlock Ames Winery in Healdsburg, who’s the subject of our Q&A this week. Last week we promised to highlight more real-world case studies of people in the wine industry who are using data in smart ways to move their businesses forward, and Julie’s first in line.

That she adds curiosity to the facts of data is a very big reason why.

Please enjoy this interview about a very prominent topic in our industry right now, particularly for smaller to midsize wineries: selling wine Direct To Consumer.

Medlock Ames is all in on this front, as 100% of their sales are DTC. We hope very much that their perspective will inform, and help, your own.

How did you come to appreciate the value of data analysis?

Ever since my days at Columbia Business School and later as a management consultant, the power of data became clear. You can see it everywhere in our lives [where] facts and figures are used to provide validity to a point being made. Data lends credibility to your argument and allows for greater persuasion even when your “gut instinct” tells you what is right.

It’s amazing how simple-but-powerful insights about sales patterns, customer behavior or profitability can be in terms of driving your strategic thinking. I’ve found that facts help win an argument or provide persuasion. It’s a very useful management tool, either to get superiors to approve of your plans because they are rooted in logic or to persuade your team who are acting on assumptions. It’s hard to say no to facts. 

Facts also feed curiosity. 

How did you know that you wanted to apply data analysis to the DTC program at Medlock Ames?

 When I first got to Medlock Ames, I had all sorts of questions about our business which is unique in that it is 100% DTC through our wine club and tasting room, our Bell Mountain Ranch property, and online. But there weren’t a lot of answers to be found and even less data being used. This is pretty typical with smaller wineries, as often data mining software solutions or deep analytics work can be costly or overwhelming. 

We had the data in our ecommerce and point of sale systems; it just wasn’t being analyzed. There was clearly so much potential to be unearthed. I wanted to take a fresh approach and use the past to help us decide how to move forward into the future. Proving to the team that some practices were harmful not only to our image but factually to our bottom line was a powerful first step in changing behaviors.

What steps did you take (are you taking) to identify patterns in your sales and product history?

The first step was to identify a partner who understands how to manipulate data in a way to derive meaningful insights. I had the perfect person in mind as I’ve worked with Addie Nichols-Petsu before. The next step was to source the data, so we pulled two years of our club member and sales history. Lastly, we talked through probing questions to provide guidance before we started digging in.

When I got to Medlock Ames, there were four levels of club membership with different customizations that translated into 14 different types of clubs to be managed. Club membership came with lots of perks including a range of discounting and unlimited visits to our tasting room.  The focus wasn’t as much on the delicious wines and the access to club-only wines that members were getting which really is a top benefit to being a club member. In looking at the various tiers, there wasn’t a clear understanding about the value of each of them, or the maintenance cost of each. 

In hospitality, we want customers to get the full immersive experience to really understand and soak up Medlock Ames. It’s critical that we are able to provide a warm, inclusive and educational experience to everyone we interact with. Yet no one knew how profitable each tier of membership was, for example, or what the value to customers might be for free shipping for those who live far away, compared to more frequent visits to our tasting room for those who live nearby. 

I also wanted to really understand our customer profiles. Who were our most valuable club members? Where did they live? How long were they in the club? What benefits were most important to them? And what did their behaviors mean to our business?

What are your main takeaways from this initial analysis for Medlock Ames?

  1. Customization of our offerings and experiences is critical. The average spend for our California customers is at least $65 less than our next five biggest states. However, we pull heavily from the Bay Area, and we now know these “locals” are more likely to come to visit us frequently, bring friends and buy more wine. For those who live farther away, we want to ensure we’re connecting with them on a different level. We are launching “Medlock Ames On the Road” as an outreach effort for greater connectivity with our customers in their homes and home markets.

  2. It’s not just about The Club. In the past year, a quarter of our sales were to non-club members and this group is driving declines whereas our club members are driving sales in the double digits. This points to us being so focused on bringing people into the club which is a success, but we need to recognize that not everyone will want to be part of a club. 

  3. Reward loyalty. While the industry standard is for club members to only stay in a club for about two years, we have a pretty healthy number who have been with us for five to ten years or more. There is the opportunity to do more to offer different wines or experiences to our most loyal club members to keep their experiences fresh, while continuing to offer them value as club members beyond the wines.

  4. Wine clubs are so much more than just the quarterly shipments and free tastings. We have many club members who get three bottles quarterly and, while they are the heaviest users of our tasting room, they also are more likely to bring friends to introduce to Medlock Ames and our wine club. They also are more likely to take advantage of our sporadic ecommerce offerings of library or special format wines, adding to their collections. We cherish these club members and love that they come to visit us often to engage with our team and enjoy the wines.