Waiting in Line to be Loyal

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Apr 11, 2005
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By John Hennessy

Jon Grant of Turley Wine Cellars was kind enough to spend time speaking to me. Turley makes really good wine and is known for their outstanding Zinfandel. One of Mr. Grant’s many responsibilities is to run Turley’s mailing list.

The majority of wine Turley makes is sold to the customers on the list. The waiting time from when you sign up until when you get the opportunity to purchase bottles of Turley
wine is about two years. Turnover on the list runs about five percent a year. Turley never shares the mailing list information.

I signed up and waited the two years and am glad I did.

Turley’s mailing list is an amazing bit of marketing. Those who are on the list longest earn the ability to buy more bottles of wine. Newbies like me start with a more modest
allocation but can aspire to larger allocations by buying all wines offered. Allocations are determined by how long you have been on the list, how much of your previous allocation
you purchased and of course, current wine production.

Many customers send in additional money with their order to cover wine and shipping for wines beyond their allocation. Mr. Grant refunds the extra monies but he will let those
customers know if there are extra bottles available of wines they requested or other similar bottles.

Turley does little marketing to support the mailing list. Word of mouth and a single billboard with directions to their Paso Robles winery where they promote the list is the extent of their marketing. Those on the mailing list receive a newsletter with their assigned allocation. Their Web site has been “under construction” for six years. They don’t accept credit cards for orders.

Turley focuses its energies on farming and winemaking. They recently purchased two draft horses, built a barn and sent their vineyard manager to plow driving school. While plenty of modern equipment is available, modern equipment is heavy and heavy leads to soil compaction.

According to Mr. Grant, the benefit of this “innovation” won’t be realized for about a decade. But that’s not an unreasonable timeline for Turley.

Turley also focuses on its customers. In the late nineties, when red wines were extremely popular and wineries were increasing their prices, Turley kept its prices stable. Mr. Grant said they received numerous thank you letters from mailing list customers. Many of these customers are wine lovers and on the mailing lists of multiple vineyards. They appreciated Turley keeping the fair pricing they have always offered. As Mr. Grant said, “We don’t drink $100 bottles of wine, why should we charge our customers that much?”


Moderator’s Comment: How can you benefit from the example of the Turley wine list? Or does the inherent scarcity of their wines make this model and their
success with it is unique? How can this type of exclusivity be applied to other loyalty programs?


The one thing I took away from my conversation with Jon Grant is that Turley Wine Cellars focuses on winemaking and farming first and foremost. The majority
of the employees are, “vineyard folk.” Even he gets involved. One of his multiple hats is assistant winemaker.


This focus on product quality is essential to the longevity of a program like Turley’s mailing list. The program would not be as successful or long
running if wine quality began to slip.


I’ll get out ahead of comments that Turley has a unique situation. Wine is a very commoditized business. Price typically drives sales, not brand. And
when brand matters, there are a lot of choices.


Turley gets another benefit from their mailing list that I don’t think Mr. Grant even considered. Cultivating a strong, loyal customer base through
their mailing list program contributes to wine quality. They are able to plow more money back into winemaking rather than divert it to advertising and marketing.


Mr. Grant also impressed me by checking before he called back to make sure my recent allocation had arrived. That’s a level of individual customer
focus that I seldom experience. He was even able to tell me when I initially signed up and what year I received my first allocation.


If you’re not in a hurry, consider signing up for the Turley mailing list. You’ll enjoy some great wines that will be worth the wait, and be rewarding
a company that takes pride in its product and takes terrific care of its loyal customers.

John Hennessy – Moderator

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8 Comments on "Waiting in Line to be Loyal"


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Thomas Miezejeski
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Thomas Miezejeski
15 years 10 months ago

My understanding of loyalty marketing is to get your better customers to buy more by providing some incentive, such as better service. It seems that the wine people have perverted the concept to provide a system of restrictions and limitations. Since wine is to some extent in the area of subjective evaluation, the program seems to be used to restrict competition. “If you don’t buy from us now, you won’t be able to buy from us later, regardless of what you think about what we have to offer today.”

Stephan Kouzomis
Guest
Stephan Kouzomis
15 years 10 months ago

Supply and demand has built the marketing approach, and consumer loyalty.

Create more product, and market the novelty and uniqueness, if you will….

M. Jericho Banks PhD
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M. Jericho Banks PhD
15 years 10 months ago
“The influx of Australian wines into this country [is] responsible for turning the U.S. into a serious wine consumer?” Whew! Just in time! All those decades of California wine promotion seemingly were wasted, but a few years of Australian wine promotion has made our entire country “serious” about consuming wine. Perhaps we could hire Australia to communicate the dangers of AIDS and cigarette smoking here, since they’re such clever marketers to Americans. As a NorCal wine consumer and promoter, I work with small wineries like Turley, including some in the Paso Robles area (Eagle Castle being the best). Consumer loyalty is important, but most wine purchasers — by far — are newbies. The wine business is changing dramatically, inviting new customers with lower prices and innovations like “Two Buck Chuck” (Trader Joe’s Charles Shaw brand from the Franzia winery). The wine business needs greater accessibility, not less. Loyalty is, by definition, inclusive, not exclusive. Turley’s wine list program is far from unique, but is probably the best way to sell Zinfandel, a newbie-type wine. However,… Read more »
Len Lewis
Guest
Len Lewis
15 years 10 months ago
The problem is that there has been far too much exclusivity in wine for too long. Too much snob appeal and not enough marketing. The result is that supermarkets — at least in states that allow wine to be sold in these venues — are not getting what they should out of the category. But the entire wine market is changing radically. The influx of Australian wines into this country is responsible for turning the U.S. into a serious wine consumer. The Aussies are producing a tremendous variety of reasonably priced varietals and they are marketing the products in a way that doesn’t intimidate people or make them uneasy about choosing the wrong wine. The Aussies’ mass market approach is also giving fits to the snobby Northern California wine industry as well as the French. Stew Leonard’s is an outstanding example of how to sell wine. They have great, knowledgeable people and a fantastic selection popular priced wines. Of course you can buy a $300 bottle, but you also have a wide variety of $8-$15… Read more »
Tom Zatina
Guest
Tom Zatina
15 years 10 months ago

First of all, I agree that Turley does make good wine.

I am not so sure that this is a loyalty marketing program though. To me it is more about making a fine product that promotes itself. It is also about controlling distribution to knowledgeable users who really want the product and are willing to trade in an efficient and honest fashion. The program rewards loyalty but certainly does not really market itself in a gimmicky sort of way. One thing we see over and over again is that great and special products promote themselves and the retailers that offer them.

And, by the way, I am not on the Turley list but I plan to sign up.

Karen Kingsley
Guest
Karen Kingsley
15 years 10 months ago

I think these circumstances are fairly unique – except in that, if they did anything wrong anywhere along the line, there would not be a 2-year wait to buy product. So the fact that they focus on their core strengths, obviously care enormously about the quality of their product, and offer good customer service means they have the luxury of having people lined up to buy their product. With wine, there simply is no way to quickly increase capacity unless they buy grapes from another vintner, which sounds as though it would be anathema to the way in which Turley operates.

As far as wine sales go, Turley is functioning in a more European-centric method. It’s true Americans often buy wine by price, but they first buy by grape: cabernet, chablis, sangiovese. Europeans tend to buy by region or vintner. Turley is leading us to this model – wherein customers buy a variety of wines/blends from one producer rather than the same wine/blend from a variety of producers.

John Rand
Guest
John Rand
15 years 10 months ago

There are so many positive things to say about this approach I hardly know where to begin.

It is everything we have come to hope for from internet businesses – allowing remote customers to become intimate with the company and the product, and to feel valued. The longer the relationship, the more value it comes to have to the consumer, a built-in loyalty system of awesome power.

I wonder how much of this long-term “investment level” mindset is something that wine making intrinsically encourages, or whether more retailers, who usually don’t think that far out, could benefit from thinking this way. I have seen some efforts to think about lifetime relationship for big-ticket purchases such as cars (not very well executed, but at least directionally well intentioned) but most retailers who aren’t local don’t seem to show this.

I love it.

Bernice Hurst
Guest
15 years 10 months ago
At the risk of mentioning my favourite supermarket yet again (Waitrose), I can reveal that I have taken to using their online grocery service (Ocado) more frequently over the past year. Not only because it is easy and convenient, offers the same products and promotions as the real store or because there are rarely any substitutions but because the service is so very very good. I have also discovered recently that although they don’t often actively solicit loyalty by making promises of what you will get for going the extra mile for them, they do, in fact, manage to throw in a little freebie with each delivery. Perhaps they do that for everyone; perhaps they only do it for regular customers. Don’t know, don’t especially care. Nor does it matter that sometimes the freebies are more attractive than ever – the wine and champagne were appreciated, the Nestle Easter egg less so. It’s the thought and principle and service that count with me. They have taken a loyal customer and made her more loyal still… Read more »
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