Designing an Effective Wine Club

A Comprehensive Guide for Winery Owners and Professionals

In today's competitive wine industry, wineries are constantly seeking innovative ways to engage customers and build long-term relationships. One powerful tool at their disposal is the wine club—a membership program that offers exclusive benefits and experiences to loyal customers. However, designing an effective wine club requires careful planning and consideration. Based on the insightful article "Designing Effective Wine Clubs" by Teaff et al., this blog post aims to provide winery owners and professionals with a comprehensive guide on designing a successful wine club program. Wine clubs have become a powerful tool for engaging customers and fostering long-term relationships in the competitive wine industry. By following the Wine Club Check-list outlined in the article, you can make informed decisions and create an effective wine club that enhances customer experiences and drives business growth.

Types of Wine Clubs

1. An ‘automatic’ or ‘continuity’ wine club requires that a customer give the winery a credit card number and agree to periodic wine shipments. The relationship between the winery and the customer is maintained by the winery until the customer voluntarily terminates the relationship.

2. The ‘a` la carte’ programme, or the ‘offering’ club, does not require that the customer provide the winery with a credit card or agree to scheduled periodic wine shipments. The offering club generally requires that a customer sign up for a mailing list that provides the customer with a chance to buy various products a` la carte and at a discount for a limited time.

Wine Club Benefits for Members

A winery will try to differentiate its wine club above and beyond the inherent product differences by offering selective benefits to wine club members.

1. Access to rare products. A wine club member is given pre-release access to products or an opportunity to purchase products not publicly available through normal retail channels. Large-format bottles, experimental lots, aged inventory, and commemorative bottlings are examples of rare products that a winery can distribute to the wine club.

2. Special events. Members are invited to participate in special occasions and winery-related events. Wine maker dinners, ‘wine club day’ and picnics at the winery are social opportunities that the wine club member can elect to attend.

3. Custom shipments. Members can indicate a preference to receive red wine only, white wine only, or a mixed (red and white) wine shipment as a feature of the wine club.

4. Value-added material. A winery can include tasting notes, recipes, winery news, or similar supporting material with the wine club shipment.

5. Charitable support. A winery can donate a portion of the wine club sales to charitable organisations.

6. Special packaging. A winery can use stylised wooden boxes or etched bottles to further add value to the wine club shipment

Wine club management

When a wine club is added to the marketing mix of the winery it must be managed. Managing the wine club requires human resources, time, and, increasingly, expertise. To help with wine club management, new resources and support processes must be implemented.

The three major wine club check-list categories

The Wine Club Check-list includes the three major categories of structure, member benefits, and terms and conditions. These are defined briefly below:

1. Structure - described as the general description of the wine club for the customer.

2. Member benefits - this section of the wine club brochure describes all of the various discounts and special benefits that are provided to the club member.

3. Terms and conditions - this portion is the ‘fine print’ on the wine club brochure.

#1 - The five components of wine club structure

1. Price per shipment. Determine the pricing strategy that aligns with your target market and brand positioning. Offer different membership tiers to cater to varying preferences and budgets.

   1. Price per shipment ≤ R1,200. This ‘affordable’ price per shipment feature can be used for the single-level and entry-level clubs. An example would be: "R990 per month for 2 cases of 6x750ml wine including shipping".

   2. R1,200 < price per shipment < R2,000. This ‘expensive’ price level can included for single- and entry-level clubs, reserve-level clubs, and wine clubs with an increased number of bottles in each shipment. An example would be: "For a fee ranging from R1,400–R1,600 plus shipping and tax, you will receive a predetermined selection of...”

   3. Price per shipment ≥ R2,000. This ‘luxury’ pricing level can be done for multiple-case and reserve-level club shipments.

2. The frequency of shipment. Decide how often you will ship wine club shipments.

   1. Quarterly. A scheduled wine club shipment four times a year is most common. “As a welcome to spring your September shipment will contain our Reserve Chardonnay… Just in time for the braai, the December shipment includes … Savour autumn with our March shipment of Reserve Cabernet Sauvignon … Then toast the winter holidays with June's special selection from our cellar”.

   2. Every other month. This option is six wine club shipments in a one-year period: “Six times a year … you will receive a predetermined selection”; “A case shipment of our six best reds, sent every other month”.

   3. Monthly. The club member receives 12 wine shipments a year: “You'll receive two bottles of ultra premium… wine, either monthly or quarterly depending on which club you join”.

3. Number of bottles per shipment. Define the number of bottles per shipment. This can range from two bottles to a couple of cases, depending on your customer's preferences and your production capabilities.

4. Club ‘Levels’. Consider offering different club levels with varying benefits, such as access to exclusive wines, upgraded member benefits, or higher costs per shipment. The winery will often benefit from identifying club levels with descriptive names.

5. Brand emphasis. The last component of wine club structure is termed brand emphasis. This component includes a generous use of brand images, logos, and other brand extension messages on the wine club brochure. Examples include prominent use of recognisable wine labels, photographs of the winery, the owners if appropriate, and other images and messages that promote the brand in a consistent fashion.

#2 - The 17 possible components of member benefits

1. Discounts on purchases. The wine club brochures or mailing list communication can indicate a discount policy for purchases from the winery or tasting room. Wineries can offer the wine club member price reduction on items available for purchase at the winery.

   1. “25% discount on all wine and gift items from our tasting room … 20% discount on all wine and gift items ordered on our website”;

   2. “30% off all reorders (for 60 days following shipment)”;

   3. “20% discount on one case, 25% discount on two, 25% discount on three or more + free shipping”.

2. Special events. The winery can provide special events that might be of interest to the wine club members or wine club members have priority registration.

   1. “Personal invitations to winemaker dinners and other events in your area”;

   2. “Invitation to members only events at the winery (not open to the public)”.

3. Winery correspondence. The winery can offer informative literature about the products, the winery, or related material for the club member to read and enjoy. The winery newsletter is a common format for this information:

   1. “Newsletter, tasting notes and recipes”;

   2. “Advance notice of winery events”;

   3. “Educational wine notes from the winemaker, and technical data on each wine delivered”.

4. Complimentary wine tasting. The winery can offer to waive the wine tasting fee for the wine club member. Also, additional complimentary services are included with a wine club membership that a member can share with a guest:

   1. “Free tours and tasting”;

   2. "Complimentary seminars”;

   3. "Complimentary tasting for you and your guests”

5. Access to wine. Access to wine not available at normal retail outlets is a member benefit that is reported on many of the wine club brochures. Also, the winery can selectively offer limited purchase wines to the wine club members only, or make the offer available to the wine club before it is publicly available at the winery:

   1. “Access to limited production wines and wines only available at the winery”;

   2. “4 times a year you will receive a ‘members only library sale’ where selected wines, cabernet verticals, large format bottles, and benchmark vintages may be further discounted”;

   3. “First offering on new release wine”.

6. VIP status. Wineries consider the wine club members to have a VIP status when they visit the winery. Although there is no clear definition of VIP, it generally refers to access to a private tasting room, private tours, and attentive service:

   1. “VIP treatment”;

   2. “Reserve wine tasting in our exclusive wine library”;

   3. “You and three guests will enjoy a complimentary tasting in the Cellar Club room”.

7. Personal service. The winery offers a range of personal services to the wine club customer. These include wine and food help, reservation assistance, travelling assistance near the winery, and other advice related to wine:

   1. “Our … concierge can assist you with wine orders, event information and registration, reservations and planning your next visit to our winery”.

8. Membership. Wineries offer membership itself as a benefit of the wine club. Often the membership is free as long as you agree to receive and pay for the wine club shipment:

   1. “No fee to join, no monthly dues”;

   2. “No annual membership fee”;

   3. “Personalized membership card”.

9. Extras. The winery can offer the wine club member (1) privileged access to products or services that are affiliated with the winery or (2) access to goods or services that complement the winery's product. The winery can also simply offer the wine club member a little something extra:

   1. “Special gifts”;

   2. “Complimentary use of the picnic grove”;

   3. “Advance reservations to the restaurant”;

   4. “10% discount on all guest cottage reservations”;

   5. “Wine club members will also receive … a little something special”.

10. Products included in the shipment. The wine club brochure can indicate the type of products that would be included in the shipment. Some wineries even provided an informative product-shipping schedule so the customer can anticipate the future shipments.

11. Gift memberships. This relates to the ability of one customer to sign up another person to be the recipient of the wine club shipment as a ‘gift membership’. The wine club brochures with this theme have space allocated on the brochure to indicate the ‘gift’ status of the wine club membership. Often it is a box that the customer can tick when filling out the ship-to information on the wine club application:

    1. “Please send a gift membership to the address below. A card will be sent on your behalf indicating your gift”;

    2. “Is this a Gift? (we'll announce it with a special card)”.

12. Incentives. This feature is intended to reward the customer for some activity or to increase the duration of the customer's club membership time:

    1. “A special gift for you on your first anniversary date”;

    2. “For every new member you refer, you will receive a special gift”;

    3. “A special drawing once a year from our pool of … [reserve-level] members for a complimentary private dinner for eight at the [winery]”.

13. Limited/select membership. The winery has restrictions for enrolment in the wine club:

    1. “Membership is limited to 300 people”;"

    2. "I understand that I will be put on a waiting list for this limited membership tier”.

14. Customise. The wine club member has options when setting up the wine club arrangement:

    1. “Would you like tasting notes included?”;

    2. “Custom options make it possible for you to choose selections suited to your tastes. Please call us to discuss your preferences. Additional fees may be applicable”.

15. Optional shipment. The member has the opportunity to receive addition wine shipments:

    1. “The opportunity to purchase an ‘Optional Cellar Shipment'. Once a year we will offer a case assortment of current release and library wines chosen exclusively by our Winemaker”.

16. Purchase limitation. The wine club member is limited in the number of bottles that they can purchase with the full wine club member discount:

    1. “Members only—6 bottle limit”;

    2. “Due to limited availability of the … Pinot Noir a 10% discount does not apply”.

17. Club membership without wine shipments. This is similar to the ‘à la carte’ wine club programme described at the beginning. A winery can extend all of the club member benefits to a customer without the agreement to purchase regularly scheduled shipments. A membership fee is not a required feature of this type of wine club:

    1. “A one time charge of R900 yearly to receive the 15% wine discount, without quarterly wine shipments. Includes Membership card”.

#3 - The eight components of terms and conditions

1. Age requirement. The wine product is an alcoholic beverage and wine club brochures should indicate that the wine club member must be 18 years old:

   1. “Wines may be sold only to persons who are at least 18 years old. In placing your order, you represent to us that you are at least 18 years old”;

   2. “Cardholder's authorised signature (I certify that I am at least 18 years or older)”.

2. Cancellation policy. The winery outlines the cancellation policy to terminate the wine club shipments:

   1. “All cancellations must be in writing. Members must receive at least one shipment before cancelling”;

   2. “You may cancel at anytime by phone, email, or written correspondence”.

3. Ship-to address (Adult Signature). The wine club brochure asks the customer to provide an address to receive the wine club shipment and outline any delivery restrictions. This address is specifically a ship-to address that is additional to the billing address collected for the credit card charge:

   1. “Shipping address: (Business address preferred as wine shipments require an adult signature)”;

   2. “[The winery] cannot ship [wine club] packages to addresses with PO boxes”.

4. Billing address. Many wine club brochures also include space for members to write their billing address. This is because the billing address of the credit card may be different from the shipping address. This is especially true if the wine will be shipped to a business address, but the billing address is at the home. Other situations include a gift membership, where the wine is shipped to the gift recipient, but the gift giver has a different billing address.

5. Additional charges. The winery identifies the circumstances that will require additional charges:

   1. “Club members are responsible for notifying the winery of a change in address. Any cost incurred due to non-notification will be the member's responsibility. In the unlikely event of damage the member is responsible for filing claims directly with the shipper”;

   2. “If you elect to pick up your … [shipment], but neglect to do so after 2 months, the package will be shipped to your address with the charges applied to your account”.

6. Will-call option. A winery can have a will-call or pick-up option for members who are more local to the winery or tasting room. This option gives the member the choice to save the shipping cost associate with home or business delivery. This is often combined with a possibility of additional charges if the member does not retrieve the wine in a timely fashion. The member informs the winery of their wishes by ticking a box or something similar on the wine club application.

7. Commitment requirement. The winery can ask the wine club member to accept a predetermined number of club shipments:

   1. “We ask that you commit to this membership for one year. Your membership and benefits are not transferable”;

   2. “All club memberships are a minimum 4 month commitment”;

   3. “Membership is for a minimum of ‘ONE YEAR'. Early cancellation will result in my credit card being charged for any preferred pricing that I have received”.

8. Modification policy. The winery informs the customer of how modification to the wine club structure will be handled:

   1. “[The winery] reserves the right to modify pricing or terminate the terms of the wine club with 30 days’ notice”.

Wine club best practice

Here are some examples of well communicated wine clubs:

• Lanzerac Wine Club: https://lanzerac.co.za/lanzerac-wine-club/

• The Simonsig Circle: https://www.simonsig.co.za/our-wineclub/

• Steenberg Wine Club: https://www.steenbergfarm.com/wine-club/

• Groot Constantia Wine Club: https://grootconstantia.co.za/wine-club/

• KWV Winemaker’s Selection: https://kwv.co.za/our-company/winemakers-club/

Last thought

By leveraging the Wine Club Check-list provided in Teaff et al.'s article, winery owners and professionals can design a wine club program that meets the unique needs of their customers while aligning with their brand identity. A well-designed wine club can cultivate loyal customers, foster a sense of exclusivity, and drive revenue growth for your winery. Take the time to carefully consider each component, personalize the benefits, and establish clear terms and conditions. With these considerations in mind, you can create an effective wine club that not only enhances customer satisfaction but also serves as a powerful marketing tool for your winery's success.

Teaff, B., Thach, L., & Olsen, J. (2005). Designing effective wine clubs: An analysis of the components of the winery wine club. Journal of Wine Research, 16(1), 33–54. https://doi.org/10.1080/09571260500236450