Rethinking Wine Clubs, Loyalty, and Digital Marketing in the Modern Wine Industry

0:00 One of the most important things that wine brands can do right now, get your marketers in the room. When you are setting goals and KPIs, have your marketers be a part of those key growth conversations. Don't just pass them a set of KPIs and say, okay, go do this. Sit back and grab a glass. It's Wine Talks with Paul K. Hey, welcome to Wine Talks with Paul Kay. And we are at an away game to a certain extent, talking to Paulie Hammond out in Barcelona. Introduction in just a moment. Yes, I'm the guy that did taste 100,000 wines and sold over 17 million bottles all by himself, but not while we're here.

0:40 We're here to talk to the CEO and founder of Five Forest Wine Consultancy, Paul Hammond. Welcome to the show. Thank you so much, Paul, for having me. That is a brilliant intro. I feel a little intimidated, but everything. You'Ve done, well, you know, it's kind of. It's. It's funny you said that because that's a lot of wine, right? I mean, I don't know, maybe your opinion is different, but I don't think many psalms even get close to that. And even MWs, you have to be very fastidiously religious about tasting wine to get to that number. It's not that I sought for that number, but every Tuesday from 9am to 2pm I tasted wine. Unless I was sick, that's the only time I missed a Tuesday. And it was just because of a discipline to find the best values I could find every month. And so it just added up. I love that. Well, I will tell you, when I was prepping for this, I had a moment that I turned around to my husband and I said, you know, I do enough podcasts. I never really feel uncomfortable. I'm like, but this man's liquor store would have sold me wine when I was a young person. It's the closest to home in my business that I've ever been on a podcast because I'm from Hermosa Beach. I. You were in Malaga Cove. I know exactly where you were, as a matter of fact. And. And so that was a weird thing. I was like, damn, there are people who went to high school with me who like, listen to Paul's podcast. That's a little uncomfortable, actually. I'm super glad to be here. Well,

2:12 thank you. It's. You are right. I forgot about your location where you were in Hermosa beach, which I'm going to tonight. And there's some great restaurants now, but Malaga Cove, the road A few miles. An old center, just for the listeners is an old center. It was sort of the entry into palace versus States, which is the peninsula here. And my dad, I'll tell you the story quickly. He had a pharmacy right in the middle of Malakovi, which is a horseshoe shaped center. And there was a pharmacy on the right side. The guy that owned that pharmacy also owned the liquor store, which was beer and ice and, you know, booze. And the guy wanted to sell the pharmacy. And my dad looked at the numbers and the pharmacy didn't make any money, but the liquor store did.

2:54 So he tells the gentleman, I'll buy the pharmacy if you sell me the liquor store. And he said, no. And he said, fine, we'll just compete with each other. Like three doors down, there's two pharmacies. And finally the guy said, okay, okay. So that's how we started. And I don't know if, you know, but there were some prominent wine families in Palos Verdes at the time, Jim Barrett being one of them. The Wetzels, who owned Alexander Valley Vineyards, they're another. And it was, you know, the hotbed. It was one of the hotbeds of wine in the early seventies in Los Angeles. Yeah, because Malaga Cove, the whole thing. For listeners who aren't from the area, if I recall correctly, there was like one way in, one way out. It was very exclusive.

3:36 The cops were very visible. You didn't go to Malaga Co unless you had a reason to be there. So, yeah, I definitely remember that. And we went to rival high schools to a certain extent. You went to Redondo Union. We played baseball against Redondo Union. And it's still there, of course, just up the road from Hermosa Beach. But it's fun to have somebody local that understands the lay of the land on the show. I know, and it's been one of the real joys for me, actually. So I'm from California, right. And getting to go back to California now in the capacity for work and actually go to places that I remember being a kid, just like, you know, just like the shop. I remember these things from my youth and now, so suddenly getting to be there as someone who is in any way doing business with them is just glorious.

4:23 So I got to meet. I'll tell a story. For our wedding, we served a Paso wine that is now owned by the Hope family. That was Triana. And I remember being at Provine some years ago and them being there and me getting to look at them and say, yes, I know we're all doing business here. But oh my God, I served your wine, you know, 25 years ago at my wedding. And this is just a real fan girl moment. And I, I think that that's the thing. It's like our work intersects with so many pieces of our lives and with of course our customers lives and everybody has a good wine story. It's really fun. It's really fun. Well, you come back, you were going to have to. I'll take you one of the newer restaurants there that we've. In fact, there's a new chef down there, Chef Slay, he's opened, I don't know, probably six restaurants in the area. All of them unique, all of them very good.

5:15 He' on the show soon. Let's talk about that for a second. There's something very interesting about what you just said, that that kind of ties into the wine trade and that is all of those beach towns have remained, their personality has stayed the same all these years. Hermos has always been the wild, you know, crazy part of the beach area, man. A little upscale Redondo, quieter and older community. And it's fascinating to me that that that happens in the wine trade as well when these wine regions protect their base, much like and I'm jealous of the, who protect their butter, protect their cheese and protect their wines with their appellation. You know, control and then. But they look at a different way. They look at America like this freedom to do whatever they want and grow more veg, you know, in the Napa Valley, if they want to have you. How do you feel? Because since you're working with Ottomany Global, which is a French based group of, of think tank for wine, how, how does that play out in. So it's funny because of course the executive director of Pauline Vicard is French her out of Burgundy and Paulina and I have a lot of discussions and in fact she's written quite a lot about this on the notion of topicity. Right.

6:27 And I have coming out of America, I have such a different perspective on topicity than she does as a French woman. So I understand and can really respect those constraints around tipicity and around our AOCs, our denominations, docs, whatever we want to call it. Something about it has never gelled with me as an American though because we don't have the history of that protection and we really want to, you know, we were the land of possibility, try anything, do anything. And so I always look at topicity when I'm working with American and non French clients as something that is unfortunately A real restriction. Because specifically when I look at it from a marketing standpoint, wine is risk averse in so many ways that when we compound that with these external forces, what we're doing is we're making our industry and again, this is just one person's perspective. We're making it more fragile. We're losing resilience. And then I ask the question, well, how do we remain relevant if this thing that we've built a collective identity around isn't.

7:39 Isn't adapting? So, I mean, that's a much bigger conversation. Probably kind of a big one to drop in the beginning, but. But. So it's just my way of saying that typisty for my American clients concerns me. No, I think that's, it's really that that's the crux of the argument. I'm glad you brought it up that way because I had this discussion yesterday with a very close friend of mine who's president of the local organization that's Armenian group. And since Ott, and he is an Armenian grape, I thought that'd be. It would segue well, but he's president of an organization. They raised money for education in Armenia. They just changed the logo. They modernized the logo and all hell broke loose with the older group. The people that founded the group that are still working with the group, they just went nuts. And I started to think, wow, that tradition. Is that kind of tradition getting in the way of the wine trade or is the wine trade steeped in that tradition and that's what keeps it so unique and so mysterious? Both. I mean, I, I don't think so. Today is. We're recording on July 15th and this week Harvard Business Review actually had an article out about this about how do you onboard new generations and new customers without offending the old ones.

8:56 And I think that this is constant tension in wine. There is still a contingent who has. They themselves believe that wine is and should be elite. Certainly I don't feel that way and I think a lot of audiences don't. I think that you can look at natural wine and we're sort of past the moment when natural wine was. Is at all controversial. But if you remember the early days of natural wine and there was so much circling the wagons within the wine industry because we had traditionalists who felt like natural wine was the worst thing that ever came along. And then we had, you know, in fact, younger drinkers, we have now Chinese drinkers, like we've got whole contingents of wine lovers who the thing that they latched onto was natural wine. I think so. This is kind of going off on a tangent, but the thing that I struggle with the most as a wine marketer is over reliance upon macro data. So you know, like you think about, you were doing direct mail marketing, right, decades ago. You think about how historically good marketing is really based upon like hyper targeting and segmentation and we know who our audiences are and we're not going to send one direct mail or ad or email or whatever.

10:17 We, we, whatever it might be, it really shouldn't be blasting in the same way that we as brands should not be wholly relying upon macro data to understand who our customers are and how we grow our businesses. I think that's a really valid point and certainly in the direct mail world where we would buy lists from people. And you know what's amazing to me, we I had send probably a million pieces a year. I did it for years. And the difference between then and now and when I left the industry was I had a very, a reliable expectation of what kind of return I was going to get if I did the segmentation of the list properly. And I tested new lists. Nothing's different today about digital marketing than direct mail was, except that you can be much more granular today. But it was the same thing. You would test different lists, you would test different ideas and then some would come back failures and some would do better than the norm. So then you'd go after that group.

11:21 But I knew I was going to get 3/4 of a percent. Can you imagine? You could live on 3/4 of 1%. Yeah, that shock that people would buy and the reason it worked then is because they were loyal. Those people that signed up, if you made a relationship with them through your piece, they, you knew they were going to stick around for 24 months. That's what the average was. But today that's not the case. I think the Internet and digital marketing has created such a finicky customer and such an easy way to find the best deal and to source where you're buying from that the loyalty has disappeared. God, it's so important, Paul, because I've just recorded this week's episode of the Wine Marketers Radar and I've actually pulled together three different pieces about loyalty. And one of the things, okay, so kind of the snapshot of this is building loyalty has really, really changed.

12:13 So back in the day we looked at loyalty as a retention strategy. Right. So you'd have, if we're talking about wine, we've got wine clubs and we would have a set of perks and those Perks often were quite similar, but we had proximity, we had travel, there were these reasons that people came to us or found us and so they signed up and they stayed longer and so that was a part of retention. But now what you're seeing particularly amongst Gen Z is that good loyalty strategy, the whole programming of loyalty can actually be used for customer acquisition. And so you need to like you collectively. We need to start looking at loyalty more as how is it a brand builder and how do we use that for acquisition? And that just means that we have, there's. So every brand will be different but we have more personalization, we have a better empathetic understanding of why the customer is coming to us. And we're not racing to the bottom by aligning loyalty to you know, what is at this point just like the bare bones discounting, which is really what you still see an awful lot of brands do. But the other thing about wine clubs I think is interesting because you had a nationwide wine club that wasn't really built upon proximity. Whereas a lot of the traditional like winery wine clubs were based in a pre Internet era where you know, Joe and his wife would travel from Texas to Napa twice a year. And they loved the wine and they had these really personal experiences there and the only way they could get the

13:45 wine was to sign up for a wine club because there wasn't any E commerce and going online. And so I, I have my own personal little theory, qualitative only that I really do think that E commerce is the thing that has effectively killed the wine club and is transforming everything about loyalty and the perks and the, you know, the, I mean it's not just about digital marketing. It's like the real question we contend with is why join a club if I could go online at any time that I want and buy the wines and I've saved my money in the meantime and you don't have my credit card and if I don't have room for them, that's okay, I can just get it when I need it. There's definitely, you're right on track with that. All the years that when I did this and the people I saw come and go. So it starts with this idea, you're talking about loyalty, every single club. And I can say this because my father was first to market and the reason that people became nationwide is it all the executives that were in palace for these estates moved. They're all El Segundo executives in, in defense and aerospace.

14:59 And so it was a natural actual expansion into the country. Because they all moved to Tuscaloosa, Alabama in different places, and they just took my dad's loyalty with them, you know, and they liked the brand. My dad did a good job of selecting wines and they just thought, this is so easy. So part of the success of the Wine of the month club through 2015 was the brand loyalty of the quality of the wines. We selected a lot. But also trust. I mean, you think about it, your dad was the one really leading that, communicating messages, selling it. I mean, like that trust factor, especially with something like wine where we're going to ship you a 750 and if you've never tasted it before, the entire thing is built up upon confidence. So they had that faith in your dad. And I think that that's super important to this discussion because that's the thing that we need to really focus on replicating is if we want to be able to sell wine through E commerce to people who've never shopped with us before, how do we actually establish that same kind of trust that someone had with your dad and then with you? That's an excellent question because I think we discussed this briefly before and I had this conversation yesterday after.

16:14 Before we were doing direct to mail and building that brand around that. And we had the brand built by then so people recognized the name and they sort of recognize the idea. We stood at a booth for 12 hours a day. And my last year in the fair circuits was 2007. I did 75 shows in 50 weekends, 52 weekends. So we stood at a booth and we shook hands and that loyalty was built. So you talk about the experiential part of wine and how people go to Napa and they go to tastings. Every time they get that box, they remember that moment and they're taken back or they're sitting in front of the Coliseum in Italy and they had that glass of trattoria wine. That's the memory of wine that comes with no other beverage. So we have that asset with us. But the idea that people have the memory of my father's store was because of the quality. Then what happened was all these bulk, you know, these 50 cent a liter wines coming from, well, I'm have to say the middle of Spain. It's okay, I live here. It happens. We all know. And so there's a bad taste in the mouth of, of the consumer when you. I use this example regularly. Somebody sent me a bottle of a sample of a Beaujolais, which was called Saturday Night Live. You know, and if I was a Saturday Night Live a devotee and I bought this wine thinking how fun it was unpalatable, you couldn't drink it. And how many times can you do that to a consumer before you lose, lose the loyalty? And it's not just that when you lose them for your own brand, but how

17:47 many times can you do that before we lose them as a wine drinker? And I always say, like when we're talking about. So we've done a ton of work, right? On Millennials and Gen Zs. It was millennials 10 years ago. It's Gen Z now. And the thing that we say to our brands is our collective job today is not to turn them into a brand specific consumer. It's to have them identify as a wine drinker. And I remember When I hit 21, we were just having this conversation at an event with a whole bunch of wine people. It was that, what were the formative bottles in your life? Right. And I remember being 21, my girlfriend and I would pretend that we were adults and we would go to the cheesecake fact right there.

18:32 And I think it was Manhattan beach, if I were down at the pier. Right? That's right, yeah. And, and I would order a glass of. I want to say it was like Chateau St. Michel. It was like some kind of Chardonnay. Now if I were to drink it, it doesn't even exist anymore. But if, if I were to drink it, I probably wouldn't love it because I know a lot more about wine than I do then. But the point being that it was that moment when my journey to becoming an adult meant that I identified as a wine drinker. I didn't go out and order beer, I didn't go order cocktails. I went out into the world and I ordered wine. And I think that that is really where we're falling short right now, is that we're not doing the things to try to get younger consumers to simply identify as, you know, what my thing is going to be. Wine. And yeah, so, you know, but there's. You mentioned natural wine.

19:24 It kind of hit me when you brought it up. There's always been these entries for people like the, the discussion you just brought up, the example to get into the industry. And I hear a lot, we are not we, I guess you're saying, is the industry in general. And how do we, you know, corral the whole industry into thinking the same way? That's not going to happen. But there's always been an entry into the trade. When my dad's time, it was White Zinfandel 1974, Bob Trincaro, you know, making a mistake with his, with his what was going to be a Provence dry ends up being sweet and taking the, you know, the, the world by storm wine coolers.

20:05 Now a natural wine, Lambrusco, all these wines that were entry level wines to get people to try and understand. I don't think you can dumb down wine. I mean you can make dumb wines, but those don't have any staying power. They have no interest factor. They have no complexity. They just are 14 alcohol fermented grape juice. So we can call it wine and people enjoy them for a little while, but eventually they get, in my opinion, they get bored of them, the palate gets bored of it and they move to other things. So do you think that generationally there's just different curves to get to that point?

20:45 Oh, that's a really big question. So I think that. So, okay, the first thing to say, I'm not a huge fan of generational marketing with the exception of are they legal drinking age? Because what we're seeing is that. Yeah, right, that is generational. What we're seeing is that when you rely instead of demographics on psychographics and you actually look at the cohorts, you're seeing alignment across interest levels that really have nothing to do with generation. But if we're simply talking about new customer acquisition. Right. Regardless of what the age is, I can tell you the things that I hear and that we see from our own data, which is there are, and this is nothing new. You know, there are a lot of young people who feel like that they've been told that the only way that you can really enjoy wine is if you understand it.

21:42 And so when you say, you know, is there can't be a dumb wine, I mean, they're certainly not complex wines, you know, and there are wines that we evolve into. But I don't have to understand all the reasons that a wine is elegant or well made or quality to know I love the way this tasted. In fact, I'm going to tell a story. We had a client some years ago who we were working on a go to market plan for the US and we were searching for user generated content, so not like pro reviews and found a quote on Vivino where all it said was, this is the wine that made me fall in love with wine. And I was like, you know what? That's one of the best pieces of marketing, you know, collateral I've ever been given. Because we could, we could all have that, that, you know, I can't tell you what it tastes like, but I don't know who I was with. I just remember that I had this wine and this was the thing for me that made me completely fall in love with wine.

22:48 How important is that? What does that. I mean certainly 19 crimes isn't going to do that. I mean what my romantic view of it, it's that complex, thought provoking wine which comes from the mysterious part of terroir. But if I'm 21, I mean, I'll tell you an interesting story about 19 crimes. One of the largest cohorts purchasing that wine were middle aged moms buying it for their sons. So if I am, I know, right? The things that surprise us. So if I am 18 because I'm in Europe, I realize that doesn't count for the US if I'm 22 and I don't have a lot of money and I'm learning to explore wine and 19 crimes with the snoop and the gimmick and the whole thing is what gets me to buy that bottle of wine.

23:42 Awesome. Like it doesn't need that. That moment doesn't need to be a Grand Cru wine. It just needs to be the thing that gets me saying, ooh, wine, it's now on my radar and I'm now going to grow from it. I agree with that completely. That's what goes back to in the example you gave earlier, which is natural wine. Wine was, by the way, wine was always natural. I know, I know. So much arguing about this. Right, right. But the point being that's, that is the entry level for a lot of people now instead of it being 19 crimes or Bartles and James, it's, it's natural wine and there'll be something else in the future to do that. But I'm talking about some of them. Never move on from natural wine. I think that that's a really interesting thing. Like I think when we talk about things like 19 crimes or what I would just describe as for better or worse sort of entry level grocery store wines, you know, chicken wine. Such a great example. I think we all as young people drank chicken wine for years that we, we.

24:42 Chicken wine is la vieille fer. It's the, you know, it's gone wild. But even before it was tick tock famous. Right. It was one of those wines that we all knew because it had such tremendous distribution worldwide. Right. So just. But, but the interesting thing about natural wine is of course it is a space where some people get there and they stay there and they don't choose to Move out of that category. I was at the market the other day. Well, the other day, and it's probably been like three years. That's a little timing problem there with my social networker at one of the month club, and we were doing some content creation and a woman came down to the shop and we recognized each other. I think I'd coached her daughter in little league or something. And I said, what are you looking for? She says, something different today. I go, what do you usually drink? She said, rodney Strong. And I said, okay, let's take a look. And she didn't. And she knew I was in the wine trade. I think she remembered that she did not grab any of the bottles I suggested. She clearly was looking for something other than. Which I thought was very encouraging. And I told my social networker, I said, look, this is a very important conversation here because she's the woman we need looking for something else than her regular consumption. And that's because she wants to move on. And she then it also. I told her, I said, look how emotional this decision is. She knows I'm in the wine trade. I recommended things that were different than Rodney Strong, but down sort of the same tone, and she didn't accept them. She wanted to make that decision on her own. Do you remember what she

26:13 got? She never grabbed a bottle. And then I saw her go by the aisle a couple times to see if I was still standing there because she didn't want to pull something off that I didn't recommend. I guess I'm not sure exactly why, but it shows you how emotional this decision is for the consumer. And how do you corral that? I don't know if there's any formula for that, but I think wine, unlike any other beverage in the world, is such an emotional. I want to be in control of the decision. Like, you must go to dinner with people that aren't regularly wine drinkers or novices. And, you know, whoever gets the list, you know, there's. There's a lot of angst. I'm under a lot of pressure. When I get the list, how am I going to please everybody at the table? We had an anniversary party the other night down here in Newport beach, and I get the list. I'm like, there's a whole different crowd here. Somebody's not going to like this. I have two answers to that. So the first one is, I'm old enough and I've purchased enough wine for tables that I know. Just buy multiple bottles. Like, the first thing is, don't try to buy One bottle to please everyone. And that's great for the restaurant, it's great for the seller. We all love that.

27:25 The thing, though, that most curious that relates to your story and those moments of going out to dinner, is it when people find out that you work in wine, the immediate response is, if they don't know wine, they're like, oh, wine, I don't know a lot about it. You probably know a lot more about it. Or they're. They're talking about a bottle and they're like, oh, you probably drink much better wine than I drink. Like, there's this whole sense that people who work in wine are drinking, you know, bottles that are worth hundreds of dollars every night. And. And I try to get them to understand that. I'm like, you work in wine are probably the most accepting and the most forgiving and the most willing to try weird wines. And when you find something that is, like, an excellent value that completely, you know, like, goes beyond what that that bottle cost is, you're pretty stoked about it. So. So yeah, I. I think that the.

28:20 The buying of the wine thing, though, how do you. How do you combat that? So I'll tell a story. We've only ever managed to get. I know one off the top of my head. There might be another one, clients to do this. So we had this experience of going into the bottle shop, and the people who work in that wine store, liquor store, whatever it is, we develop relationships with them. We know which one knows our palate or when they make a recommendation. That recommendation is spot on to what we like. You can actually mimic this in a digital space so that what we've tried to get clients to do in the past and only one or two have done it, is have the tasting panel so their ident identified members of your staff or your winemaking or whatever it might be. But there are multiples of them, and each of them give their honest opinion about every one of the wines. And so what you can do with that is that then as an online buyer, I can understand, okay, the chef and I, whoever, you know, Chef Joe drinks exactly the same way I do.

29:22 If the chef likes the wine, I'm probably going to like it. So I read what his reviews are, but then you can actually use that for targeting and segmentation. So if I, you know, if they know that I'm buying the wines, which absolutely can happen, that chef likes, then I can receive emails that are specific to what chef is recommending this month and how he or she is talking about the wine. So it's actually really easy to do at scale and online. I just find that most wine brands, when they look at the, you know, when they look at it as an option, it just falls away, sadly. Well, it sounds like, well, we know this for a fact and I think we discussed this briefly before that, you know, winemakers and winery owners are farmers, that most of them get into it because they want that ethereal experience. Many get into it because they just want to have their own brand and be a big shop. But for the most part, wineries are farmers. I was just thinking when you said that that restaurateurs are not a whole lot different. You know, they, they're complaining now. The on premise sales are down. I went to a restaurant the other night and the guy says the mice bottle sales are off 40%.

30:31 And I thought. But restaurateurs are probably reluctant to test, probably reluctant to understand the nuances, the metrics, the consumerism of wine and just want to make good food and, and, and have a good wine list. So here's this idea I had because we used to test everything when I mailed, when I, you know, what is Google advertising and what is Facebook and Instagram advertising? It's strictly testing. You're just constantly testing content. What if you took a wine list and this is, goes back to this, I think, inane conversation about changing the language of wine. I don't, and we'll talk about that in a second after I give you this example. But what if you took, you had two wine lists, same wines. This particular restaurant is changing his whole list to Mediterranean style wines.

31:20 He's, he's dropping the basics. He's dropping, you know, a Mutankade and he's dropping Caymas, he's dropping Silver Oak and he's dropping Austin Hope. He's just going to do Mediterranean style wines. But what if you made two lists? What if you took the same exact wines and you changed the language as they talk about. And so you did it, you know, bold and aggressive, light and fruity, dry and whatever, you know, whatever, whatever. However, how you want to segment it. And then you drop the wines into that, that profile and you do the other list, you know, by region or over your traditional list. And you give half of the waiters one list, another half, another list. And you run that for a couple of months and you see if the actual wine list, the format, I don't think it'll change anything. But everybody's talking about changing the language. So let's change the language and see if it works. I don't think it'll change anything, but at least you've, you'll know the consumer, you know, the restaurateur is not going to know the difference. I mean, the restaurant client's not going to know the difference. So then I asked the, I asked the restaurateur, I said, and what do you do to educate your waiters on what they're serving? He goes, they don't know shit.

32:29 I'm like, well, there's, that might be one of your problems, right? I'm like, so whose problems have solved? I'll tell you. That brings up something though, that is a really interesting occurrence with the rise of digital marketing in wine. So we deal with this all the time, which is, whose responsibility is it to actually train all of those people at the front line? And how as a brand can you make those people who are on the front lines, how can you control your message? Right? Because that's the thing. As it passes through all of these manifold channels, it can dilute and go off in any direction that you want. And just about that specifically, one of the things that we've seen has worked really, really well are internal podcast. So they're podcasts, they're not meant to go out on Spotify for every consumer to listen to it. But it's more about training your team.

33:25 So new releases, offers in the tasting room changes, you're making food and wine pairings, content, anything that are the talking points. And if you, if you think about just basic. So we deal a lot with the psychology of how we buy and how we act. That's sort of the foundation of our work at Five Forest. And if you think about the psychology of how we recommend things, right, we don't ever want to look stupid. That's the number one thing. And we need to have confidence that when we make that recommendation that what they walk away with is going to be the same experience as when I had it. So that means that the more that we can train, whether it's the waiters, whether it's the 24 year old selling in the bottle shop, whatever, the more that we can help them feel confident to speak about our product, the more likely our product will be the one that is recommended.

34:20 And so this all goes back to. But there are farmers and we didn't have the margins built in for all of this. There's a lot of layers to complexity to solving those problems. The one that I think is really interesting, that comes up all the time when you talk about the, the people in restaurants Is, of course, the Coravin is magical. Like, I. I look at it and I'm like, well, why? If we're trying to figure out a wine program, quite honestly, why are we not leaning in? Why are more restaurants not leaning into Corvin? Because that is a great way to be able to meet a customer where they are, Let them try, let them sample, and really just make it easier for someone who at that moment is saying, I would like to impress the girl or boy that I'm out on a date with. I don't want to get it wrong. I have no idea what bottle to choose, but if I could pay for a short pour of it out of a Coravin, I'd be willing to do that before I bought a whole bottle. You know, it's very funny.

35:29 Remind me of a podcast I did with the gentleman who's the preeminent authority of wine served at the White House. Oh. And he tells the story by going to the Brown Derby here in Southern California, the famed restaurant where Groucho used to eat. Groucho Marx. And taking a date from sc, a sorority girl. He was a fraternity guy, and he thought he was going to impress the date. And he told the waiter he wanted this bottle of wine, and it was a bar sack. And he. Because he could pronounce it, it was the shortest name on the list. It might even been Chateau Coutet or something. And he goes, that's what I want. And the guy goes, sir, you really don't want that? He goes, no, I really want that. And so the guy brings this half bottle of this dessert wine with the prime rib, and it's a funny story. And I thought, wow, you know, that's.

36:15 That's. That's where Coravan would have been a great thing. You want to taste it, sir? First? Because Check that. Check that decision. How'd it go? Did the girl like it? He never dated her again. He never dated her again. Yeah. We didn't mention in the intro that one reason you and I are sitting here is because we're both SC grads. So that was really how you and I connected. And it's funny because, of course, most great universities have got wine programs. That's right. And like, that is something that I think collectively, maybe we don't tap into as much as we should when we're talking about how do we get young people into wine? Well, how do we make it easier for them to discover great wines? There was an article some years ago. I can't remember who wrote it. Your listeners will Know, I'm certain that was someone in trade. I think it was a psalm saying how it was such a problem that they can't even afford the wines that they are meant to be serving. And I do think that there are some real issues around access that run all that run straight through trade as well as our consumer bases. And those are gonna be very different, difficult to solve. Well, certainly because of the three tier system in America which for the listeners is supplier to distributor to retailer to consumer as required path has a huge effect on that. On that. Because even in Southern California now we have a huge consolidation of distributors.

37:44 I'll put it in industry ease. Even myself at the time when I was doing somewhere around a half a million dollars a year with a distributor on a regular basis for year after year after year. And as soon as something changed inside their company, I was put on cod. And so I couldn't even get stuff that I wanted. And I was buying thousands of cases a month. And so the consumer gets affected by that eventually because it ends up on the shelf or doesn't end up on the shelf or the price goes up because of the tiers of marketing it takes to get there. So certainly that's. Or you have allocation requirements. You're not going to get this bottle unless you buy this bottle. I mean like that's certainly a huge issue that, that we see more and more brands dealing with. It's huge. So when you're dealing with. Since you're a consultant on yourself And I had, I posted this yesterday on LinkedIn a little bit because I was talking to a woman named Courtney o' Brien who was with Coca Cola then she was with Gallo.

38:39 And so she's a guerrilla marketer type. And one of my pet peeves when I started this digital marketing, 1997 when we had. We were the first wine club with a website and a subscription, you know, Bucket was. I was tired eventually of paying consultants to teach them my industry. We have such a finite group of people to attract and it's hard to find them. And most digital marketing consultants are such a shotgun approach to everything because they think one, one size fits all. And I'm talking about Facebook marketing, Instagram marketing, Google Ads, all of those things. Not the, the latest for me was a YouTube group because I wanted to move my YouTube channel.

39:24 How do you. Without any global. How do you consult wineries to vet out the consultant and make sure that they're getting the right. So it's funny, it's more work that we do through five forest than Irani so Irani very much is about research. Amazing. For anybody who wants any information, I actually recently came on board overseeing their membership because I've been with them for so long as a sponsor supporter. So about Irene, you can absolutely reach out to me about five Forest and the digital marketing side of things. So when I, when I set up five forest, which was 10 years ago, at this point we just had our 10 year anniversary. I think there was only one other like digital marketing company for wine in the English speaking world. And it had happened because for various historical personal reasons we had all of these friends who were winemakers and they would. I was doing the same job but in a different industry. So I know exactly what you're talking about about not knowing alcohol. And so it was really important to me from the very beginning that I understand the peculiarities of wine. So I took courses to do that. I actually did a fabulous course with Tim Hani who is an MW that used to be through like Napa Valley Wine Academy. Crazy. Yeah, Tim's awesome again. And Tim's on TikTok. Everybody should go follow him. He's hysterical. Anyway, I, I did that course because I needed to understand the economics that were specific to alcohol.

40:54 Then we invested a lot of time into understanding the legalities around alcohol messaging because remember, we're global. So I don't just have to know what I'm allowed to say in California, I have to know what I'm allowed to say in Australia and New Zealand and Chile and all of Europe and the uk. So like actually really developing that knowledge around, around the legalities. And even more so, it's not just the legalities for alcohol, you know, advertising messaging, but it has to do with things like we were the first agency talking about GDPR to anyone in wine.

41:35 I mean, this was years before GDP came out. My business partner Mike Bourne has become pretty much the US expert on Ada Complian and Winery website. So we put a lot of time into things that nobody ever sees. And there can be moments when I sit at my desk and I'm like, I wish that everybody could understand the difference between someone who actually knows the alcohol industry. I mean, the other thing is we have, I call it institutional knowledge because I don't ever disclose it, but we have data from hundreds of wine brands whose accounts we run. So like we have really, really deep industry knowledge. And you said you hated having to teach people your industry. And I think that that's the crux of it is that you have to, when you hire someone who is a Generalist, they're going to come in and they're going to say things like, we're very passionate about wine and we make exceptional wines. And, you know, they just, like, they have no idea who the consumers are. They don't know anything about the legislation. Like, and you have to spend all of this time getting them up to speed. And that incurs a cost of money and time. Whereas when you work with an agency that like, only works in alcohol.

42:50 So, yes, our little, our little bubble of people we can work with is smaller, but we can get to work from day one. Like, we can actually just come in and do the work from day one. So, you know, certainly on other podcasts, people have heard me say that I can get really, I can get really frustrated behind the scenes. Digital marketing was this thing where, you know, from about 2000 on, you could hang a shingle and say that you were a digital marketer and sell your wares. And one of the worst things I think that happened to wine, this is the most negative I'm going to be about this is a lot of wineries signed up for that early on. They signed up for someone who hung that shingle for digital marketing and they didn't see returns or they weren't given realistic expectations. I think that that's a really big issue.

43:42 And so they say, oh, well, I tried, it didn't work. I'm done. Like, that was one of our biggest challenges 10 years ago when we were getting started, is people being like, yeah, I ran some ads, they didn't work. I'm not going to do that anymore. And I'm like, despair. That's a really interesting point. Yeah. And the other part of it though, because I am like the biggest advocate for in house marketers in wine brands, is that the world that a lot of in house marketers came up through when they were learning their craft is not how we're marketing now. And if they don't have leadership that is helping them actually upskill, you know, side skill, whatever it might be to train in current marketing practices.

44:27 But then, you know, dictating KPIs or having expectations that don't have any kind of stakeholder or leadership support, that's a real injustice to your marketers. So, I mean, I've talked about this on podcasts, written about this at length. One of the most important things that wine brands can do right now, get your marketers in the room when you are setting goals and KPIs. I know of one very major brand where historically their marketers were Helping them dictate what was getting planted. Right. Have your marketers be a part of those key growth conversations. Don't just pass them a set of KPIs and say, okay, go do this. And when they come to you and they say they need support, if that's resources in the form of say, visual assets or creators or, or if it's training as the person controlling the purse strings of that brand, you have to support your marketers because there is, your marketers are setting your long term strategy, your salespeople are out there hawking the wares right now. And I know that that immediate cash flow is super, super important, but you can't, you can't risk your long term brand building simply for short term cash flow. So I want to say three things and we're almost at, we're actually out of time.

45:48 But this took a little while to learn. But I did come from corporate America. I came from probably the largest sales organization of the 80s at Xerox Corp. And that's a different story. And then I went to the smallest thing in the world. I had five partners. We had a fishbowl foot, business cards and no office and a Commodore 64 computer. So we, we've had to go make payroll a couple of times in our career on a Friday afternoon just to make payroll, go sell something. But what I found through and what I started to use at the end of my career as a digital marketer, a daily digital marketer, were a couple things. One is most consultants would look at, they would do something, something would change, they would improve it. And my first consultant was Chris Brogan, a famed social networker of the day. Back the Gary Vaynerchuk beginnings. They were friends and they, you know, competitors, so to speak. And I hired them and they did change this Facebook revenue stream from the ninth source to the seventh, which was as far as they're concerned, a consultant like that is they were successful. Look what we did. But I got an extra, you know, 200 bucks, but it cost me 2,500, so that's not successful. And the other thing that happens that I learned to combat was the marketing agencies that become, they put you into the funnel, their funnel, and all of a sudden you're just, you're, you're talking to this, this entry level person who's. Not sure exactly what to do. Yeah, yeah, your account manager. And you just get funneled through and they cross all their T's

47:21 and dot all their I's and then they go, look, you know, we're Doing the work. We ran the ads and they didn't work. And so I've learned how to, how to negotiate up front on that. And the comment I made earlier, which was, I don't mind if this digital marketer was aggressive enough to go out and learn the industry, to go scrub thing, read some articles, go scrub some information and come to me and say, look, this is what we've understood so far. How does it work with your business? I would have been very happy, but they didn't do that. They just wanted to put you into the funnel. And so what I ended up doing is exactly what you said. Every Wednesday morning for three hours. I had my, my, my Google Ads person on a zoom call.

48:03 I had my social in house networker in the room, I had my inventory buyer in the room, I had my digital designer in the room, and I had my video and audio engineer in the room. And so we sat down and we planned the week's promotions. Which means you've got to come up with the content for that promotion. You got to come with the promo code for that commotion. You got to come up with what the promotion is. You can do a Bordeaux sale or Napa sale or some kind of red wine sale or something. And all those pieces had to work together to understand the process. And then you come back the next week and say, how did it go? You know, that's the thing like with Fiforest, that was one of the problems from the very beginning that we wanted to solve. So I mean, there's the joke, right? I know I'm wasting half my marketing dollars. I just don't know which half kind of thing.

48:50 And then also we were seeing that by having all of these elements siloed. So you'd have someone who was creating strategy and they were like in an office in New York. And then you'd have somebody else who, who was, you know, doing 12 other things and then email set somewhere else. And so what we did is our goal from day one was to bring all of that together. And the way that we work with our ongoing clients is that we literally work like an extension of their teams. I have clients who I am in there every single solitary week in meetings. I think that one of the things that we, it was really important to us from the very beginning was full transparency. So this is just for anyone listening in any industry. As a matter of fact, don't let an agency run ads under your agency account. Account. Make certain that you as the brand have full ownership of everything that relates to your data. I can't tell you how many times we have had to come in and clean up instances where vendor lock in meant that our clients didn't even have historic data. So that. The other thing is you always start with saying, this is what we understand your goals to be. I would be a negligent marketer if I did not reset expectations where those goals were inaccurate.

49:57 Like, I cannot say, yes, that's yes, I agree to everything. I will do all of it. So you have to make certain that you have that level of trust. And the other thing, and this is really hard, and I think that this is where sort of this, the, the agency model of yes men is such a problem, is that there are absolutely times, fairly frequently that I have to push back against a suggestion, a request, somebody's heard about something, someone's nephew told them to do things. And I have to say to them, this is not, you know, I do not feel comfortable with this work. And I'll give you a really good example. Five Forest, with one exception, and they've been with me forever. Five Forest does not run organic social media for brands. And the reason for that is I personally, I can't report on it. And I don't believe that organic social media drives revenue. Your brand awareness is fine, but not doing that contemporaneously, you know, not having someone on site, all these reasons.

50:51 So I'm not going to do a job that I can't sit down with my client at any moment and say, here's what you've spent, here's what the results were, here was the rationale behind it, and here's what we're doing next. And so, yeah, I think that what you say is spot on. They need to be treated as part of your team. And part of your team means that you are having regular transparent lines of communication about what you're doing, what's moving the needle, something like the returns that you're talking about. You know, when we sit down with clients, the returns that they get need to also pay my fees. Like, that's something that I know that's really important. So if the returns that I'm getting on that marketing aren't paying my fees, well, that's a big discussion.

51:35 The brand should be discussing that with me. And if I'm saying that a set of returns that aren't paying my fees are good returns, I am also not really a credible marketer. But, but I also have clients who've been with me, you know, for like 10 years. So I'd like to think that maybe. But that's an important thing and certainly any business owner would look at that like, well, Jim, not covering the expense of my consultants. So why am I bothering? You know, just anecdotally you're talking about organic marketing and I agree with that completely. People don't understand that you're basically organic. Social networking is damned if you, damned if you don't. Because if you don't do it, you don't look like you have any intelligence or you're part of the. The bit part of the program. But if you do do it, you're. You're basically the time you spend on it is virtually worthless when it comes to revenue.

52:22 And, and the highlight that. And what I love too is like the trending. Whatever's trending music that's trending styles that are whatever doesn't matter. My most viral video I have on my TikTok and my Instagram is one camera angle, no edits, natural organic sound from the background of a restaurant. And it's an old friend of mine, guy named Don Schliff, used to run wine warehouse here in Southern California, opening a bottle of port with red hot tongs. And I have 4 million TikTok views on that and a few hundred thousand Instagram views. It did $0.

53:03 There's not one. I can't attribute one sale to this 4 million views on TikTok and hundreds of thousands on Instagram. It has none of the benchmarks or earmarks of something contemporary based on today's organic marketing. But it was viral. I know it went viral. Virality has zero revenue to usually to associate with it. But we're out of time and this is incredible because we could probably talk for another couple hours. We'll do an episode two sometime. I suppose we're going to have to do that. Such an honor and pleasure to have you on the show and talk again and sort of peel some of this stuff back. There are no concrete answers to all of it, but there's certainly some intellectual and academic exercises to do to make it more understandable. I love it. I've loved being here. Thank you for having me. I can't wait to be in Hermosa beach and have a glass of wine with you. We'll find something better than that old wine that I was drinking in Cheesecake Factory 25 years. Yes, I know. Thanks for being on the show. Cheers. Cheers.