Lesley Berglund Talk
23 November 2015
Lesley Berglund, co-founder and chairman of the Napa-based WISE Academy, launched the WISE Academy (NZ) in New Zealand. The main part of the launch was a talk she did in Cromwell. I threw her the challenge of speaking about the most important things for a cellar door to be successful. I think she rose to that challenge! – Bruce McGechan (joint venture partner, WISE Academy (NZ)).
The transcript is below, the images are the relevant slides.
I’m really enthusiastic to share your wine and to learn more about what makes this part of the wine world so unique. So the cases of Pinot Noir that followed me home tell you exactly what a huge fan I am, and was so excited to be asked back again. So Bruce and I put together some things, relevant portions of WISE to bring here, which we’ll tell you about.
So the interesting thing, as I mentioned, is that cases of wine followed me home. Not as many as I would have liked, because I have one really strict rule. This is the business I’m in, I won’t buy unless you ask me. Bruce now knows because he’s spent some time with me in Napa, is that I will buy anything you ask me. But my litmus test is unless I’m asked, I don’t buy even if I’m having this fabulous great experience and really enjoying the wines. I love the cases I got, but I look forward to getting many more.
I’m going to share with you some perspectives through those 31 visits, of what I saw was similar with the wineries I work with at home and also areas where these common challenges kind of emerged. Before we get started I will just tell you a little bit more about the WISE Academy and what we do, and hopefully have the relevant here.
First of all, I’m a serial entrepreneur. I’m a third-generation native from the Napa Valley, from a grape-growing family. After I got my Harvard MBA, I moved back home and just to focus my whole career on the business side of wine. So we’re grape growers, we’re not wine makers, and I’ve spent the last 25 years in sales and marketing. I started out as a wine retailer, but without bricks and mortar, back in the days pre-internet where we printed up and mailed millions of catalogs and prayed for the phone to ring. That’s how I learned Direct-to-Consumer on the wine side.
The WISE Academy is actually my eight company in the industry and all of them have been centered around some aspect of Direct-to-Consumer. The industry dynamics, through conversations with Bruce and other vintners in New Zealand, I feel are in common here in the New Zealand, are really what we face in Napa for sure.
Why I created WISE is because I wanted to really grow the next generation of leadership in the industry. Most wineries, at least in our neck of woods, are driven by consumer direct, yet too few wineries at the owner, or the president or the GM level, know how to run consumer direct strategically.
I apologize in advance if I call it a tasting room and not a cellar door. In Napa, we would start up our tasting rooms because people just kept showing up when we needed to pour that wine. It was like this appendage, it just happened. Then we woke up one day, say, “Wait a minute, they’re coming and they keep coming and what if we were actually really trying?” And so started, designing guest experiences like so many of you do.
What happened in Napa, and why we created WISE, is consumer direct importance grew and grew and grew, we outstripped the labour pool. I mean, literally hundreds of wineries fighting over a very small sack of people who were really rock stars in the tasting room. Or fighting over the same six good wine managers who were just bopping back and forth between the wineries. I said, “Gosh, this trend in the industry is going to continue, we need to train up our people.” I’ve done that in my career for 20 years building a pretty large Direct-to-Consumer business. That’s just a little bit about how WISE came to be. So we seek to close that gap, to celebrate careers, and raise the bar in the industry.
What do we do? We provide executive education, training, and certification for wineries on a Direct-to-Consumer side of the house. That include cellar door, wine club, events management, CRM, online marketing, something for everyone. We do a lot of work in leadership and general management as well, everything from demystifying finance and accounting, to mastering public speaking.
We have, as Bruce mentioned, personally done “mystery shops.” It’s a fun boondoggle; I’ll go taste wine in wineries and see how they’re doing. Actually my company, who have done over 3,000 mystery shops in the past two and a half years, in all different regions across the state.
What we’ve done is we have classes that we teach. We have mystery shopping, kind of measuring what’s going on out there and that helps inform the next generation of classes that we teach.
What I thought I do today, is to share with you from those thousands of mystery shops.
So from a cellar door standpoint, what we’ve learned, as complicated as it is, there’s really only three things to drive sales. When I get requests from vintners saying, “can you come and help my team build our tasting room sales,” they think the only thing that matters is we need more visitors. That’s usually the shortcut answer is to build cellar doors sales, we need more visitors.
But the issue is, do you really? Because there are only three levers that drive sales. Yes, more visitors. Second is the conversion rate. Out of the people who visit you, what percentage of them are you selling wine to? Or, wine club membership or capturing their contact data. And then, third, what’s your average order size.
Too often what I see back home is people say, “Oh, the whole solution is driving more visitors.” It’s like, “Wait a minute, if you have a really low conversion rate and you get more people to come visit to the winery, you’re doing it poorly more often.” That is not a recipe for success. So we start with what are the things that we can do to get stars to align, to get those conversion rates up? Once you get the conversion rates up, then we get the average order size up, and then that’s when we try to invite more visitors to come.
As I mentioned, we have done over 3000 mystery shops. What I have done is just pull a few of the tidbits. It’s hard to do in just an hour, we obviously spend days and days teaching classes on this, but a couple tidbits that might help.
The first thing we’re looking for is the DNA issue. Is it the right fit for the individuals that we have in the tasting room? Because I can teach you sales, and we can teach you wine, but we can’t teach you friendly, so we’re looking for that service heart.
The reason I want to talk about this is, really without exception – and I’ve been in some wine regions where this is not the case – you guys as an industry are fabulous service heart. I mean, everybody I met was nice and friendly and you can tell when someone wants to be of service versus if someone just punching the clock. In my experience, you guys really seem to have that nailed.
The other right fit issue as we’re looking for, as host in cellar doors or sharing their knowledge, is both knowledge and passion. So, knowledge certainly, is the knowledge of all about wines and the winery, etc; but you can be really, really knowledgeable and not present it enthusiastically or passionately. That’s no good! All this knowledge and just kind of a wet rag. Or, vice versa, you can have someone who is really passionate, enthusiastic, and have no idea what they’re talking about. I don’t want that either. We want both. So, that’s one of the things on the fit.
The other things on the fit, and this is not necessarily from the team member side, it’s more from the winery side. I know we were challenged and have been getting better, but there are still pockets are being challenged in Napa and Sonoma…most people who are attracted in this job of cellar door and tasting rooms were there because it sounds like fun. They get to tell stories, they get to pour some wine, they do some entertaining. That sounds like a great time. When you ask the vintners, the owners what’s the job, it’s like, yes that and sell wine, sell clubs and capture contact data. It’s almost like we as an industry forgot to tell our team members what the actual scope of the job was.
Part of that right fit is: are we clearly laying out what success looks like? It’s absolutely being engaging, telling the brand stories, but it’s also having the confidence for what we call natural helpful sales. Not sales as an ecky four-letter word that’s aggressive. I know we always use the analogy in the States, “Used car salesmen are aggressive!” No, that’s not what we’re talking about here. What we’re talking about here is setting it up so we’re having a great guest experience, noticing what people like and asking for one, takes them home with them.
That’s all part of this right fit part. Yes, it’s service heart, it’s also some knowledge and style, but it’s also a clear understanding of, “I understand this is actually a sales job, good kind not the aggressive kind, and I’m excited to do it,” so that’s one of the first things that we see.
The second thing is what we look at in mystery shopping, and then end up working in our course work, is a concept we actually borrowed from Disney. I don’t know if you guys heard of it, but it’s the concept of what we call “front stage, back stage.” If you think about it, guests are coming, it’s almost as if it’s a theatrical performance. It’s as if the curtain has gone up, the guests have arrived and you are now on stage. Now, we all know to have a great front stage experience for our guests, a lot of things have had to work perfectly in the backstage to get that to align. And that’s fine, but we don’t want our backstage to show. It’s the idea of, we want to make sure our glasses are buffed and certainly our bathrooms clean, and it’s not just that physical stuff, and the tasting menus are out and there’s a pen nearby, all of that laid out.
Not letting your backstage show can also be verbally what happens in the cellar door between team members. It could be innocent, like “Oh, when is Johnny going to take his lunch break?” It could be nonsense innocent like, “My boss is a real jerk.” Neither of which you really want the guest to ever hear. That’s part of the two of what we’re looking at. It’s so weird because those things, it could be really innocent, but if it’s detracting from that guest experience, it’s hard to get to wow. We can have good guest experiences, but we’re trying to get to this memorable guest experience.
Do you guys have an idea, for people who come to visit your wineries, let’s say it was over a weekend long, how many wineries you’re visiting? It’s different by region. Do you have any idea? A day or over a couple of days? Three or four. Think about it. They come and they’re probably doing other things; let’s say they visited four wineries, this is what we look at is, what if those things are going to stick out? Because even though you have all unique experiences that starts blending together a little bit.
What happens is that the little negatives can pop out overdramatically – and actually has a really good example of that (see picture “We waited 30 min, no service”) – and the positives also can make a big impact. We have a lot of research on this. The research shows that for great greeting – meaning, it doesn’t end up being this overreaction negative impact of the whole guest experience, you’ve got about 15 to 20 seconds with eye contact and a smile, “I’m so glad to have you here”. Which is really hard on your busy weekends, and you’re three deep or things are just crazy. But as wineries are learning more how, if you don’t hit that positive greeting, there’s an emotional overreaction and then it’s hard to ever get to wow – even if the rest of the guest experience rocks.
The while could be only a minute, that’s the crazy thing. So we look at this – and I encourage you guys do too, if you go out to other wineries, perhaps where you’re not known, it might be hard in this industry – just look at your watch of how long it takes to actually be greeted. Fifteen or twenty, you’re feeling fine. You get to a minute, you get to two minutes, it’s just a strange thing. So, this great first impression is also an example. That’s the first foundation of building rapport.
The next thing that we see, and in my experience here in New Zealand, it was about 50/50; if it wasn’t busy then I got really good greetings; but there were many occasions where I didn’t. Even that eye connection “I will be right with you” buys a lot of runway. That was 50-50.
The next thing is something that I think we have an opportunity to do better here, and in a lot of other wine regions I’ve worked with too, and that is, what stories or brand stories are you actually telling about the winery? Because if you’ve got guests that have come in, they’ve gone to four wineries and they’ve tasted a lot of great wines, because you guys have got some great wines, and wine makers never like to hear this – it blurs together.
They’re not going to go home and actually remember specific wines, if they’ve been to multiple wineries, very rarely. But what they will remember is the experience and how they felt there and they will remember the stories that you tell about the winery and about the brand. We as an industry both here, as well as in the States, do not do enough memorable storytelling. Often, because we’re so close to it and if you’ve worked in the winery for a while and you may be kind of bored, “I’ve told that story again and again, it’s not entertaining to you.” But that’s the thing that’s going to pass the memory.
We do greatest in the industry of sharing the technical information about the wines. This is what makes this different than that. We’ve got that down, but that’s the part that blurs, it becomes white noise. I’m not saying don’t share the information about the wine, but don’t stop there because it’s the stories about the brand that really take it further.
We call it, what’s your green fish? What’s that thing that you can only say about your winery and not the winery down the street? We actually call it a “gut check”, when we’re sending our mystery shoppers out, all whom are certified WISE tasting room professionals and we say, “OK, you’ve had this guest experience and then you’re driving out the driveway, what is your gut telling you makes that winery different than everyone else in the neighborhood, in the area?” And too often it’s like, “It was nice but I don’t know what’s differentiated,” because we internally might take it for granted. We said all the time.
Have you ever watched ted.com, TED Talks? There’s a great one, you might have heard this guy by the name of Simon Sinek. Has anybody heard of him? He wrote a book called “Start with Why”. The book is great, but even just this 17-minute video is good. He has this theory and I loved it, it says most of our marketing communications, whether it’s verbal or what we write about, is what he calls this the Golden Circle.
There are three concentric circles: the outer circle is what we do and most customers, most employees, know what we do. We make wine, we make 5000 cases, it’s Pinot Noir, those are the “Whats.” The next inner circle is “How” we do it. A little more interesting? What could differentiate from some of the neighbors and peers? And the center circle is “Why” we do it, and too often you never talk about that and it’s the one thing that our guest will really remember.
Simon gave this great analogy about Steve Jobs and Apple computer. He says if Apple was like any other company, like most of the companies across the world, they would be communicating what they do. We make computers, this one is a thousand dollars, it’s beautifully designed, it’s white, do you want to buy one? That’s a lot of “Whats.” A little bit of “How” – “It’s beautifully designed.” It’s a “How” but what computer, white, it’s a thousand dollars? That’s the “What.”
But that’s not how Jobs did it, and how Apple does it today. Instead it’s, we are Apple computer. We are a rebel with a cause. We’re here to change your relationship forever with technology. We make products that are beautifully designed and easy to use. We happen to make computers, this one is white, it cost a thousand dollars, doou want to buy one?” How different does that feel?
The ironic thing, the crazy thing is that in the wine industry, each of you have very passionate Whys, and histories, and why you or the owner of your winery started this, what brought you to it, what’s that dream, what’s that passion, how you’ve chosen to do what you do. And I guarantee you if we had a recording of our 3000 mystery shops, 95% of the communication from all over, from the server to the consumer, would be around the Whats about the wines.
Because if you think about, we have a lot of wines and our team members have to memorize a lot of information about this wine, so we’ve got the 5000 cases on the 8 wines, the award winning Pinot Noirs, and the color of the body and the aroma and the taste of each of the wines, and gosh darnit I have memorized all this information about every single wine and you’re going to hear it!
And you’re so exhausted once you’ve proven that you know all the Whats about your wines, you may or may not layer in some of the Hows which would be more memorable. You rarely – and I’m just picking on you, I’ve had the same conversation in Napa, in Sonoma, and in Finger Lakes in New York, in Oregon – we’re not getting into the “Why,” that personal, emotional story.
The Why of the WISE Academy is I want to grow the next generation of leaders in our industry. I think the people who are really good at consumer direct multichannel, overseeing cellar doors, and clubs and online marketing and events and phone – that by definition is already general management. Now why can’t that team grow to be the next generation of leaders? That’s my “Why.”
As Simon Sinek says, in his analogy about Apple and others, people don’t remember what you do, they remember why you do it. They don’t remember what you do, they remember why you do it.
That’s one thing. As we go back and we look at all the different 3000 shops, just getting to the wow, getting to that memorable thing that’s going to set you apart from the other wineries that you visit, this can really make a standout.
Great exercise to go back and do with your team members, “What’s our green fish? What can we say about us that we couldn’t say about other things?” And it’s often things that are so close to you that you even take it for granted, but some fun things to think about.
Another thing that we’re looking at, and this gets back to that right fit issue, is if our goal, in addition to tell a great brand story and have a memorable guest experience, also sell wine. What kind of expectations are we putting at, how are we keeping score? How many of you actually have, in addition to selling wines, have some type of wine club? Yeah, a couple. So, that’s becoming more and more popular, just like gosh when I first started in this version of my career 25 years ago in Napa, nobody had wine clubs. We actually helped launched the first 35, because we’re doing it for ourselves as a retailer and realized, “Gosh, wineries should do it too.” Today, over 90% of wineries in Napa have wine clubs.
By wine club I mean annuity based, so if someone calls and gives you a credit card and says “Please keep shipping me three bottles or six bottles or a case, a quarter until I say not to.” It’s a great type of sampling program. It’s a great way to take the people you’re meeting in the cellar door and actually establishing that long-term relationship. It’s really fabulous.
From the wine club standpoint, that’s become a huge business in the States. In Australia now they went from less than 5% about ten years, to probably over 60% today, and we think in New Zealand, it’s somewhere in the 5% to 10% range. So, my feeling, if what happens here happens in other countries that can be a big business for you. It’s a great thing for a brand because you get these brand ambassadors, these people who get your wine, love your wines and they’re going out and sharing it on your behalf with their family and friends. How cool is that?
Another thing, and where’s my new friend from Felton Road…the one person who’s asking for my contact data. Guess what, I gave it and I will buy. When people have had a great guest experience, invite them to stay in touch. At least in the States, the statistics are 60% to 70% of them will just say “yes.” I don’t know how it is here but back home, I kind of don’t want to give my email address anymore because I get really tired, like the grocery store or the drugstore and everybody trying to send me stuff. But this is not that. People have come and they’re sometimes having the vacation of their lives and they’re visiting, if they’ve had a great guest experience, why wouldn’t they want to stay in touch? It does no harm to ask, the biggest reason that we don’t ask as an industry, and often this can be a big stumbling block, is our own baggage about contact data capture. It’s like, “I don’t want to give my email address. I wouldn’t want to bother someone to ask them about theirs.” This is not that. We can have that baggage, just lock it in the trunk of your car. When you back to work in the morning, you could pick it up when you leave at night, it stays there during the day.
So, what we call this with WISE is refocusing what success looks like, and first of all high guest satisfaction, obviously, that wow factor; but also, are we actually physically asking for the order? Are we sharing the benefits for wine club, if we have them, and are we inviting them just to get in touch, capturing the contact data? So that’s part of that clearly defining success, and we find that by doing that and having gamification around and sharing metrics and things with team members, it can help increase performance dramatically.
Another key concept that we look for in our mystery shop is something called the Platinum Rule. Many of us might be raised of what was called the Golden Rule – treat others as you would want to be treated. That’s fine. But in this industry and our level of service, that’s not good enough. We actually got to get to the Platinum rule, which means treat others as they would want to be treated, not as you want to be treated. So it’s your job to figure out how they want to be treated because everybody has really different relationships of wine.
We would say the first question around the world, “So, where are you from?” Just like the opening question. “I’m from San Francisco,” “I’m from Auckland,” “I’m from Napa,” whatever. That’s fine, starting to build rapport, but I would much rather – and you have to get to it sometime right – I would rather start with the “How’d you choose to come to Felton Road today”. And I would have said, “Well, I was up at the Bay of Islands and I had a bottle of your wine so I came sought you up.”
You now know a lot more about me. I was a customer, where else I traveled and I sought you out, versus “The winery down the street told me I should come here because you guys are really fun. Just asking that question starts giving you insight into what brought them here in a day and then building rapport and the open-ended questions that follow are going to be relevant to give you signals about how to successful serve them and consult to them, and too often we’re getting all monologue and very little dialogue beyond the “where are you from”.
We know why we have so much monologue – we’ve got thousands of “Whats” about our wines that we just have to share them. Versus figuring who is just in front of you, and how you can switch gears enough to create wow for them, because what’s going to trigger that wow is going to be different for different people. We call that the Platinum Rule. It’s a really neat thing. You cannot have a platinum rule experience if you’re stuck in monologue. The only way you can get there is by asking more open-ended questions, of the right open-ended questions, and then give that cool content to them play off of. Does this make sense?
Another thing, this little trick that took me way too long to learn, is the power of what we call “Surprise and Delight”. That is, as we ask our mystery shoppers to go out, we always say one question, “Did the winery do anything to exceed your expectations?” It’s an open-ended question. So it could an extra pour; it could be a “concierge step”, where else you’re thinking of going, recommending the winery down the street, and calling and saying, “Fred, I got this couple coming now and they’re really cool, please take good care of them.” Anything that takes it a step beyond.
What we see in the States a lot is some wineries do do extra pours. A powerful surprise and delight is, I’m in a conversation with you and I’m realizing what you really like, and you might like this extra vineyard designate that’s not on the list today, but I’m going to pour it for you based on our conversation. Of course underneath the bar you know what your extra pours are of the day, I’m not saying, inmates start running the prison and opening everything up. No. You know what are the ones you’re going to keep on the side that you can then exceed someone’s expectations with, but not just the fact that every single person gets the same Rose, because as a guest you can feel that, versus, I had a conversation with you and I think you might really like that – that’s, how you get to wow.
So what we’ve seen is wineries that say that surprise and delight is not the exception. I had this one cellar door manager that we worked with who said, who told his team members, once he got this concept and we when we tested a bit, he said, “Okay your job is to surprise and delight, every single guest is going to get an extra pour, but you need to figure out why this individual deserves this wine, whatever it is”. Ultimately, for the team it made a game because guess what, if I’m stuck in monologue there’s no way I can decide what is the right way to surprise and delight this person, because I need to be asking questions to tailor it.
And I really understand I should have got a rugby score, this is a basketball from the States (slide). The other thing that’s really powerful is what metrics you keep around your business and what you share with your frontline staff. We firmly believe at WISE that the business is a team sport. If that analogy is true, then for every individual who’s playing, one, do they know how to keep score; and two, do they know in a given day whether they’re winning or losing? So part of it is we’re seeing more and more wineries say, “Yes, we care about dollar sales and club membership and list size,” those are three things. But often we might want to translate it to conversion rates or average order sizes because if you’ve got Johnnie who works full time and Sally that works part time, she’s never going to get what Johnnie gets, so how much fun is that to play the game? But if you can translate it to something it doesn’t matter based on hours work, where these rates are percentages, it can be a really powerful tool.
These are just tidbits and I could go on and on and on for days, but tidbits of things that we’ve seen at a basic level of engagement and then what I would call masteries. The basics would be the service heart, the knowledge, the passion; do people know that the job is actually a sales job – or is that a secret we’re keeping from our team members? The concept of front stage and backstage – where is our backstage showing? I love that vocabulary, that lexicon about front stage / backstage because if you have an issue, once the group gets it culturally, it’s a great way to talk about tough problems rather than, “Gosh darnit, Johnnie keeps doing something that makes the back stage show.” It’s like, “Wow, where did our back stage show today?” Everybody becomes aware and it’s not a shame thing. On that great first impressions again, don’t blow it.
On the engagement side, this is the how you’re going to set yourself apart. Certainly we have the conversation about the brand story and selling your brand first, your wine second; so your brand first, your wine second. Too often we do it the other way. That can help with engagement because you’re going to remember it. The other engagement part is that invitation to stay involved, get involved, buy wine, join the club, join our mailing list, let’s stay in touch – those invitations.
Then, the mastery comes on the Platinum rule things, when the industry has nailed the Platinum rule we won’t need to WISE any longer. Meaning I’m not stuck in monologue, we’re translating into what you want this experience to be. Too few people do it, but when wineries get that sales go up, customers are happier and, guess what, team members are happier too. Because you’re not having the same conversation again and again and again, it’s always different, and it’s always tailored, and that’s where the service heart really comes out. The surprise and delight that exceeds even their expectations, and keeping score and measuring. So those are just a couple ideas. I love to answer questions…