In the vast majority of businesses, recurring revenue is about as desirable as it gets. How can wine shops achieve it? [level-members]
In a word? Wine clubs. OK, that’s two words. We’ve talked about wine clubs before but they bear another look as the landscape has changed. Over the past few years, the number of outlets offering wine clubs is mushroomed to ridiculous levels. I’m not sure what a publishing company might know about wine – even the world’s premiere publishing company – but that hasn’t stopped the New York Times from offering wine by subscription.
Obviously, the additional competition isn’t necessarily ideal, but the additional exposure can certainly help our cause. As more and more consumers become familiar with and comfortable with the idea of wine clubs, you can move from educating customers to making a case for why your club is better.
And that should be easy to do given the lack of specialization that firms like the New York Times’ parent company has in the wine field. It would be another thing if Eric Asimov, the Times’ main wine critic, had a club. But as it stands, your best customers aren’t likely going to be attracted to a wine club from the Times.
You simply have to make the realize that your club will
- Offer better wine than brand-driven clubs like that of the Times
- Be customizable to fit their tastes and preferences
If you can do that, you can build in recurring revenue not only from your ideal customers – whose business you’d likely be getting anyway – but also from folks who are interested in wine but aren’t quite full-fledged aficionados.
That’s why it makes sense to include an option for monthly selections that are exploratory. Yes, given a choice most people would sign up for the Cab and Chard club because it’s safe. You just need to make it clear that the club should be part of a bigger plan to find great values that fit their palates.
Let your market be your guide – but don’t give up if you’re initial response is lukewarm. Once you paint a picture of the value and fun a club can be, you’ll have a growing percentage of recurring revenue.