Rethinking Marketing Budgeting, Part 2

In last month’s blog post we floated the idea that wineries should consider total sales and marketing budgets together, rather than separately, to adapt to changes in the retail marketplace.

That is, to consider above-the-line sales expenses and below-the-line marketing costs as one total budget.

Since then, this idea has struck a chord with wholesaler and winery thought leaders we’ve met. There is a sense of anxiety about the wine marketplace. At Benson, we believe the industry is at an economic inflection point that will reward dramatic action and efficiency, and punish complacency.

Sales & Marketing Headwinds

We all know that wine sales are soft, with some notable exceptions.

The middle tier faces headwinds including the effects of private/custom labels on brand sales, the growing influence of the larger wine and spirits retail chains, the effects of home delivery on in-store activation results, and chronic under spending by wineries on creating consumer demand.

On the other hand, wineries are seeing a crowded three-tier marketplace dominated by large wholesalers and retailers, a DTC sales channel constrained by winery visitation, and only the occasional anecdote of how these two channels can support each other. (The DTC Wine Symposium 2020 has an interesting Workshop scheduled on this topic.)

How can clever marketing help address these market conditions?

Moving Toward Integrated Sales and Marketing

We’re not suggesting spending more money; just spending smarter. Here are some suggestions that could apply to wineries selling in the three-tier market.

  • Push thematic marketing campaigns to the local level: Take a marketing campaign’s central theme and don’t just create a hashtag campaign or a tasting room promotion, but extend that theme into a sales plan with POS, incentives, instore tastings, etc. Schedule in-market winemaker dinners, press meetings, and geo-targeted advertising in support of that theme. In short, create a 360-degree campaign in key markets, at specific times. (While that may sound obvious, very few wine companies execute at this level.)
  • Create Better Digital Assets: Wholesalers and retailers need winery trade sites to provide easy access – be careful of clunky share drive platforms, and password-protected trade sites.
  • Know how your ABL budget is spent. Sales incentives, depletion allowances and other above the line costs are often opaque, high decentralized, and may not actually support marketing activations or brand image goals.  And, are the wholesaler allocations actually being spent?

Synthesis

We will be the first to admit that promoting integrated marketing is self-serving! It’s in our mission and it’s how we staff account teams. But we also know it works. And who would oppose budget efficiency when faced with a sluggish market, extreme competition, and built-in obstacles to the two main sales channels?

So, what are we doing about it? In addition to our normal planning activity, we are paying more attention to a few areas:

  • Brainstorming Out of Scope: Creating campaign themes and sharing our experiences with extending themes into sales campaigns with POS, incentives, in-store tastings, contests, PR, etc. That is, thinking more broadly, and often way beyond the scope of current client agreements. At times like this, we need to invest even more time in our clients’ success.
  • Repurposing Digital Assets: Reviewing how investments can be efficiently repurposed and recycled.
  • Supporting the Middle Tier: Asking wine importers and wholesalers how our agency can better serve their needs.

We recommend you keep these ideas in mind as you plan for 2020-21. Thanks for reading.