How to Develop a Subscription Offering (Using A Wine Club as an Example)

One of the hardest things about building a subscription business is defining the specific features in the subscription offer. What do subscribers get? So I thought it would be helpful to walk through an example, in this case, wine clubs, since we just got back from a fun day tasting wines with our friends Brad and Karen up in Napa.

You have to start with your forever promise. What ongoing objective are you helping your subscriber achieve? Or what ongoing problem do you solve? And who is that forever customer who will value it?

• You can offer the widest selection at a fair or fixed price with easy shipping, like K & L Wine Merchants, a local retailer with 3 stores in California does.
• You can offer access to something that most people can’t get, like wines only available to club members.
• You can offer a great sense of belonging or education.

You don’t need to promise everything to everyone.

For example, K & L offers an "Amazon Prime" approach to wine. They don’t tell you what to drink or what to buy, but they make it easy for you to find whatever you want and get it with a minimum of friction. You get a discount and regular shipments, but you don’t get an ongoing relationship with any one winemaker.

Other wineries sell their best wines to members of their wine clubs, and depend on these loyal and discerning fans to provide the cashflow that gives the confidence to invest in the future. They create special events for members only—such as crush parties or wine/food pairing dinners with local chefs—sometimes with extra fees involved, sometimes included.

Still other wineries are really focused on the experience at the winery. They might let members picking up their orders “cut the tasting line” even on busy days. Additionally they might offer members little tastes or snacks while they wait for their orders to be packed. This approach builds a sense of belonging and status while also providing a valuable benefit.

Even if you live far away, membership at its best can ensure that you stay current on your favorite winery, and get an allotment of the best wines, even those made in limited quantities. Sometimes you also get a discount, as well as personal recognition from the winemakers.

There are many features that can be incorporated into a wine membership:

• Features around wine deliveries

1. The number of bottles in a shipment, from one to many.
2. The frequency of shipments--monthly, quarterly, biannually, annually or as needed.
3. Type – Do you provide a choice of varietals? Is everything you make included as options?

• Features around pricing

1. A fixed shipment for a fixed price. Often the fixed shipments feature the highest price point options, taking advantage of the member’s trust (and credit card)
2. An option for members to choose from a range of price points, maybe with all purchases enjoying member discounts.
3. Even among clubs that vary the price points, it’s rare that they give you as a member the ability to set a maximimum spend per shipment. So there’s always a risk of going over budget.
4. A premium membership—an upfront payment for the privilege of buying wine whenever they want, kind of a Costco Model.
5. Points as currency – additional benefits and goodies based on depth and frequency of purchase—like the airlines or hotels

• Features at the winery

1. Ability to pick up your purchases in the winery, often with a free tasting while you wait
2. Invitation to special events, either included or for additional fees, such as winemaker dinners or harvest parties
3. Unlimited tastings, often of premium wines and sometimes without having to make advanced reservations

Whatever features you choose, remember that your members are your most engage customers. In other words, they have made a proactive choice to prioritize your wines over other options. Whether they want your highest or lowest priced wines, you need to be sure that they are satisfied with the experience and feel like they’re getting the best deal. It’s important to remember that be rewarded,  many people move to subscription pricing because they want price certainty and a cap on spending, so it’s surprising to me how many wine clubs have no ability to set a fixed spending cap on each shipment.

One winery, known for making some of the best rose in Napa Valley doesn’t include rose’s in their memberships—they sell all of the rose to restaurants and retailers. Their member tastings  don’t include rose either. It seems like this winery uses the membership as a way of unloading less popular wines at no discount—in other words, treating their members worse than they treat strangers, or at least treat them like benefactors, paying a premium out of altruism, without any recognition. If members were to trust this winery, and then take off their blinders, they might be surprised and disappointed to find that their membership is a less good deal than being an anonymous customer.

Here are a few DOS and DON'TS if you want your membership to have deep engagement and long term relationships:

DON’T dump less popular wines on club members. If you’re known for rose and pinot noir, don’t force the white blends.

DO make your members feel special. Treat them well when they come into the winery, and send them what they want.

DON’T bundle in irrelevant “gifts” instead of quality wine deals. No amount of cheese knives, wine country chocolates or olive oil will make up for overpriced bottles of your least popular wines.

DO send the occasional pleasant surprise--like a free bottle of that new white blend you just launched that nobody knows about yet—something yummy that I can also brag about!

DON’T tell me a wine is “waiting list only” if I’m likely to see it on restaurant wine lists and wine store shelves 

DO make the entire ordering, visiting and even cancellation process transparent and easy. 

DON'T throw in everything you can just because it’s easy—each feature has to be relevant and valuable—otherwise it’s a distraction.

And for goodness sakes, DON’T hide the cancel button

REMEMBER…

Whatever business you're in, the point of subscription is to build a trusted relationship, so much trust in fact that your subscribers don't have to think about their regular purchase because they know it will be valuable and fair.

Your members should be surprised by the quality of the experience and the special value you provide, and not by being charged more than expected. And their trust should not be taken advantage of, it should be rewarded!

About Robbie Kellman Baxter

Robbie is the founder of Peninsula Strategies LLC, author of The Membership Economy, and the Instructor for 10 LinkedIn Learning courses including: Create a Membership-Based Business and B?ecome an Entrepreneur Inside the Company. Her clients have included large organizations like Netflix, SurveyMonkey, and the National Restaurant Association, as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with clients in more than 20 industries.

As a public speaker, Robbie has presented to thousands of people in corporations, associations, and universities. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business. Find Robbie on Twitter, @robbiebax

#membership #subscription #wine #clubs #productdesign #loyalty #premiumloyalty #vinyard #subscriptionbox

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