Harvard Business Review sends a weekly email with links to article summaries, and I enjoy receiving it to stretch me beyond the issues in the wine industry. Last week, there was a link to "Unleashing the Power of Marketing", an intriguing piece about how GE transformed the function of marketing from a support to a critical role to engineer growth by collaborating with customers, and identifying new product opportunities and markets.*
To create this breakthrough, GE had to change the way it thought about marketing -- from a support function (or worse, "cost center") to a revenue generating "commercial innovator". The company defined the "Key Parts of the Marketing Engine" -- principles, people and process, by identifying specific skills and disciplines, the essential roles and characteristics of marketers and evaluation metrics.
Most interesting to me is the second -- people, which identifies four critical roles for marketers: instigators, innovators, integrators and implementers. Despite numerous business school classes in marketing and management filled with case studies of how marketing-driven organizations operate, I've never before seen these roles so eloquently defined!
The instigator must think strategically to lead change -- practicing high level brainstorming to challenge the status quo by imagining ways to approach solving problems differently. Aptly named, instigators frequently face change resistance and must possess a fortitude of purpose and ability to take calculated risks to achieve a broader vision.
As innovators, marketers look to trends and market insights to identify areas for advancement before the competition. Instead of relegating this role to R&D or engineering, marketing actively participates in asking the questions both during and after the research to anticipate future needs. Again, consensus building skills and ability to fight for ideas is needed.
Hence the integrator role in which marketers seek to unite teams. We do this by cultivating data and presenting information in a clear way, sometimes speaking different languages with independent teams. This requires emotional intelligence and an ability to lead by combining positive, quiet force and shared interests versus outright pressure or more direct methods. A GE executive describes "war rooms" to identify potential issues and seek quick solutions before problems arose. (I realize the use of the term "war room" contradicts the quiet leadership method but these are two different audiences. The management team creates the "war room", then presents a united front to the departments.)
Finally, marketers must serve as implementers, executing the plans and using the integration skills to get the job done. This requires planning, evaluation and a measured approach -- this phase is typically more of a marathon than a sprint.
The authors state that these four behaviors must "be in concert", although "a marketing leader who has them all is rare". GE blends talents and teams to achieve this, and in some cases has two CMOs with complimentary expertise sharing leadership roles. Additionally, the company uses the process score card to evaluate marketers and identify strengths and areas for improvement.
In my next post I'll discuss the capability areas GE defined as part of its marketing process and how they can be used in the wine industry to create a marketing score card.
In the meantime, I encourage owners and operators to assess their teams given these critical roles. Does your winery have an instigator, innovator, integrator and implementer on its marketing and/or management team? Are there areas weaknesses holding the company back from growth an enhanced profitability?
In my own skill set -- without having yet officially self-evaluated, I would rate myself most highly on implementation with strong capabilities in instigation and integration. Innovation is an area I will seek to study and improve in the New Year.
*HBR provides article summaries online. To read the full article, you need to subscribe and buy an individual copy for $6.95.
12.21.2010
12.15.2010
December Newsletter
Read the latest issue of Strategic Guidance from the Ground Up, our bi-monthly newsletter. Learn about new time saving features from Google, large format bottle design suppliers and read the feature on the Transformative Power of Preparation and Goal-Setting.
11.17.2010
A Primer for Analyzing Wholesale Data
In my last newsletter, I wrote about the importance of analyzing account level data from the wholesale market. For smaller wineries, getting this data and knowing how to use it can be a challenge. For larger businesses, allocating the resources to wading through all of the data usually means having a dedicated person or team.
The first step is, of course, gaining access to the data. Depending on the number of wholesalers you work with, you may be able to simply ask for it in spreadsheet form -- this might work for about five to ten markets. After that, investing in software to help manage the business is usually necessary. (See the newsletter for different providers of this software.)
Below are the fields in which I'm most interested for each market:
* Account name and address (would love phone number and buyer, too)
* wine(s) purchased and quantity of each one
* distributor sales rep who made the placement
The above is just a baseline set of information and represents a good start for those who haven't yet made wholesale management a priority. (I always recommend that if you're in a market, you might as well manage it -- it is ultimately the winery's responsibility to do so and those who expect the distributor just to sell through without a partnership will likely be disappointed.)
Software providers like DarWine will help you look at changes in the business because it's gathered monthly and offers a series of reports ranging from account level detail to wholesale business overview. Top level information might include a report showing number of accounts and placements for each wine nationally comparing 2009 with 2010. An example of a detailed report shows this data for an individual market to let me know best accounts, unsold accounts, etc. A further drill-down might be looking into purchasing patterns of individual accounts.
Assuming I just have the baseline information from my clients, here are a few examples of how I use it at different intervals to ...
monthly:
* have a productive conversation with each brand manager regarding inventory management/depletions and any programming
* send a thank you note to new accounts, or depending on the size of the order, a special token for the staff members
* send shelf talkers to new off-premise accounts who use them
* promote special accounts or events through social media and winery e-blasts to consumers
... quarterly:
* help plan market travel and specific accounts to call upon during the day and patronize each evening
* run a list of accounts for DTC manager to keep on hand for out-of-town visitors to the winery who ask where to find their favorite wine when they return home
... annually:
* call top X# of buyers in each market to thank them and personally invite them to the winery and send a thank you gift
* run performance report for review meetings with wholesalers
Adding wholesale analysis to your repertoire will result in a great ROI if done consistently and well.
The first step is, of course, gaining access to the data. Depending on the number of wholesalers you work with, you may be able to simply ask for it in spreadsheet form -- this might work for about five to ten markets. After that, investing in software to help manage the business is usually necessary. (See the newsletter for different providers of this software.)
Below are the fields in which I'm most interested for each market:
* Account name and address (would love phone number and buyer, too)
* wine(s) purchased and quantity of each one
* distributor sales rep who made the placement
The above is just a baseline set of information and represents a good start for those who haven't yet made wholesale management a priority. (I always recommend that if you're in a market, you might as well manage it -- it is ultimately the winery's responsibility to do so and those who expect the distributor just to sell through without a partnership will likely be disappointed.)
Software providers like DarWine will help you look at changes in the business because it's gathered monthly and offers a series of reports ranging from account level detail to wholesale business overview. Top level information might include a report showing number of accounts and placements for each wine nationally comparing 2009 with 2010. An example of a detailed report shows this data for an individual market to let me know best accounts, unsold accounts, etc. A further drill-down might be looking into purchasing patterns of individual accounts.
Assuming I just have the baseline information from my clients, here are a few examples of how I use it at different intervals to ...
monthly:
* have a productive conversation with each brand manager regarding inventory management/depletions and any programming
* send a thank you note to new accounts, or depending on the size of the order, a special token for the staff members
* send shelf talkers to new off-premise accounts who use them
* promote special accounts or events through social media and winery e-blasts to consumers
... quarterly:
* help plan market travel and specific accounts to call upon during the day and patronize each evening
* run a list of accounts for DTC manager to keep on hand for out-of-town visitors to the winery who ask where to find their favorite wine when they return home
... annually:
* call top X# of buyers in each market to thank them and personally invite them to the winery and send a thank you gift
* run performance report for review meetings with wholesalers
Adding wholesale analysis to your repertoire will result in a great ROI if done consistently and well.
Latest Bi-Monthly Newsletter
Edition 15 covers part II of Increasing Sales with Marketing-Driven Strategies, a review of Grappos.com and discusses the importance of analyzing account level data.
10.25.2010
Study Finds Marketing Key During Downturn
There is a natural tendency to cut marketing spending during a down economic cycle. When revenues and margin begin to decrease, business managers begin to look at ways to cut costs to maintain an acceptable level of profitability.
Marketing is typically in one of those "first to go" categories. While understandable since measuring ROI can be tricky given the demand creation cycle, cutting these activities actually reinforces the downturn for the company.
Even when there is not a downturn, some firms choose to cut marketing when things are going well -- I saw this a few times in the wine industry when I worked for Ed Schwartz Public Relations (now Calhoun & Company). In one particular example, the company worked diligently for two years to get coverage in a major business publication. Soon after, the client called to end the engagement saying that the work was phenomenal and that he no longer needed PR. Rather than invest in building the momentum, he decided to choke it off at its peak.
This research study by McGraw Hill was cited in a North Bay Business Journal article that came through today's Daily Links. The main take away for me is a reminder that some businesses grow during recessions. For example, one of my clients is up 70% YTD, and the main reasons for it are enhanced focus among the (fabulous) team of people and a strong, targeted marketing plan.
Investing in your brand awareness and loyalty (especially within your target market) when others are cutting, actually brings your business a greater ROI.
Marketing is typically in one of those "first to go" categories. While understandable since measuring ROI can be tricky given the demand creation cycle, cutting these activities actually reinforces the downturn for the company.
Even when there is not a downturn, some firms choose to cut marketing when things are going well -- I saw this a few times in the wine industry when I worked for Ed Schwartz Public Relations (now Calhoun & Company). In one particular example, the company worked diligently for two years to get coverage in a major business publication. Soon after, the client called to end the engagement saying that the work was phenomenal and that he no longer needed PR. Rather than invest in building the momentum, he decided to choke it off at its peak.
This research study by McGraw Hill was cited in a North Bay Business Journal article that came through today's Daily Links. The main take away for me is a reminder that some businesses grow during recessions. For example, one of my clients is up 70% YTD, and the main reasons for it are enhanced focus among the (fabulous) team of people and a strong, targeted marketing plan.
Investing in your brand awareness and loyalty (especially within your target market) when others are cutting, actually brings your business a greater ROI.
10.21.2010
The Power of Goals - A 3 Part Process for Plan Preparation
Setting goals is normal part of everyday living in modern society. Whether it's getting to the gym three times per week, creating and tracking a budget, or spending time with the family on Sundays, setting specific goals helps identify what is important and to live a life of purpose.
In the business world, setting and measuring goals is a very important practice for success. John Wooden, one of the most successful college basketball coaches of all time and author of one of my favorite business books, Wooden on Leadership, believed that winning (or losing) was a matter of preparation. For Wooden, the process of becoming the best team possible -- setting goals and tracking success -- was the most important predictor of success:
"Success is peace of mind, which is a direct result of self-satisfaction in knowing you made the effort to do the best of which you are capable."
In the wine industry, particularly in smaller and younger businesses, goal-setting is often primarily focused on the production side. We spend a lot of time setting goals for vineyard yields, fruit processing, aging, style, production level, recognition, etc.
Production goals are undoubtedly important given the need to deliver delicious wine, but, if there is no plan specifying goals for people and processes, managing the business side becomes increasingly difficult. The symptoms of lack of preparation include rising inventories, decreased demand, unclear and/or inefficient processes, frustration and waning focus among people and, ultimately, decreased sales, profitability, and team cohesion.
Many want to believe that making excellent wine is "enough", but with competition from imports and new domestic entrants, consolidation in wholesale and account tiers, and the variability of economic cycles, it just isn't. I don't necessarily believe in the "new normal" of consumer spending (people tend to revert back to old habits once economic pressures decline), but I do believe in the "new normal" of the competitive landscape in the wine industry.
The great news is that preparation is a proactive process, not something out of our control like enormous flocks of birds preying on vineyards or rain during harvest. It's something we all have in our power to do provided we commit the necessary time and brainpower.
Preparation is also a positive learning process. It helps you understand why certain tactics worked and others didn't, and gain knowledge of team strengths and challenges. Viewing this process in a positive light means freeing yourself as a business manager to make mistakes and then seeking the understanding that comes from correcting them. Wooden again speaks to this value:
If you're not making mistakes, then you're not doing anything. I'm positive that a doer makes mistakes.
In my practice, goal-setting for established wineries is a three-part process. First, I seek to understand the winery's strengths and challenges with interviews and surveys: confidential individual interviews and then surveys of key stakeholders including staff, trade and consumers. Then, I provide data analysis and recommendations to my clients and their teams, which serve as a point for further discussion about goals and processes. Finally, based on the knowledge gained from these conversations, I work with owners and managers to develop a strategic marketing plan identifying organizational and sales goals, mapping out specifically who is doing what, and when and how performance will be measured. We work to establish an engaging and motivating review process and coach the "players" to success based on preparation.
The research phase of this process respects and includes the winery's past while mapping out a proactive future. A consultant can't enter a company and effectively make recommendations based on prior experience alone. My experience working with close to 60 wineries ranging from domestic "one-man" operations to global producers gives me a series of best practices, but it doesn't give me the proprietary knowledge that is just as important in delivering excellent preparation.
For new wineries, there is still a research phase based on identified competitors, and focus groups can be used to augment it. Preparation for a new winery means that there isn't a lot of data to consider for the plan, but there is also a "fresh slate".
Operating with a common set of goals has several power effects. Teams become more focused and united, prioritization is easier and more effective coaching is possible. The feeling of setting and achieving (or surpassing) a goal also helps build momentum needed for the next year, when we need to plan all over again!
In my next post, I'll discuss meaningful business goals for the wine industry.
.
In the business world, setting and measuring goals is a very important practice for success. John Wooden, one of the most successful college basketball coaches of all time and author of one of my favorite business books, Wooden on Leadership, believed that winning (or losing) was a matter of preparation. For Wooden, the process of becoming the best team possible -- setting goals and tracking success -- was the most important predictor of success:
"Success is peace of mind, which is a direct result of self-satisfaction in knowing you made the effort to do the best of which you are capable."
In the wine industry, particularly in smaller and younger businesses, goal-setting is often primarily focused on the production side. We spend a lot of time setting goals for vineyard yields, fruit processing, aging, style, production level, recognition, etc.
Production goals are undoubtedly important given the need to deliver delicious wine, but, if there is no plan specifying goals for people and processes, managing the business side becomes increasingly difficult. The symptoms of lack of preparation include rising inventories, decreased demand, unclear and/or inefficient processes, frustration and waning focus among people and, ultimately, decreased sales, profitability, and team cohesion.
Many want to believe that making excellent wine is "enough", but with competition from imports and new domestic entrants, consolidation in wholesale and account tiers, and the variability of economic cycles, it just isn't. I don't necessarily believe in the "new normal" of consumer spending (people tend to revert back to old habits once economic pressures decline), but I do believe in the "new normal" of the competitive landscape in the wine industry.
The great news is that preparation is a proactive process, not something out of our control like enormous flocks of birds preying on vineyards or rain during harvest. It's something we all have in our power to do provided we commit the necessary time and brainpower.
Preparation is also a positive learning process. It helps you understand why certain tactics worked and others didn't, and gain knowledge of team strengths and challenges. Viewing this process in a positive light means freeing yourself as a business manager to make mistakes and then seeking the understanding that comes from correcting them. Wooden again speaks to this value:
If you're not making mistakes, then you're not doing anything. I'm positive that a doer makes mistakes.
In my practice, goal-setting for established wineries is a three-part process. First, I seek to understand the winery's strengths and challenges with interviews and surveys: confidential individual interviews and then surveys of key stakeholders including staff, trade and consumers. Then, I provide data analysis and recommendations to my clients and their teams, which serve as a point for further discussion about goals and processes. Finally, based on the knowledge gained from these conversations, I work with owners and managers to develop a strategic marketing plan identifying organizational and sales goals, mapping out specifically who is doing what, and when and how performance will be measured. We work to establish an engaging and motivating review process and coach the "players" to success based on preparation.
The research phase of this process respects and includes the winery's past while mapping out a proactive future. A consultant can't enter a company and effectively make recommendations based on prior experience alone. My experience working with close to 60 wineries ranging from domestic "one-man" operations to global producers gives me a series of best practices, but it doesn't give me the proprietary knowledge that is just as important in delivering excellent preparation.
For new wineries, there is still a research phase based on identified competitors, and focus groups can be used to augment it. Preparation for a new winery means that there isn't a lot of data to consider for the plan, but there is also a "fresh slate".
Operating with a common set of goals has several power effects. Teams become more focused and united, prioritization is easier and more effective coaching is possible. The feeling of setting and achieving (or surpassing) a goal also helps build momentum needed for the next year, when we need to plan all over again!
In my next post, I'll discuss meaningful business goals for the wine industry.
.
9.08.2010
Swiftwater Cellars Grand Opening Friday
It gives me great pleasure to announce the grand opening of Swiftwater Cellars this Friday! This is truly Washington's ultimate destination winery -- delicious wines by Tony Rynders and Linda Trotta; fine cuisine and hospitality by Chef Matt Bates, F&B Norm Dillard and Club and Event Manager, Jami Parks; and a solid accounting and business foundation by Controller, Bjorn Gjerde. It's a beautiful location about an hour from Seattle in the Cascades. And there is something for everyone given the Suncadia resort -- golf, trails, spa, fishing and much more. All created within the vision of founders, Don and Lori Watts and their son and GM, Donnie and his wife, Meghan.
I have had the pleasure of working with the ever-growing team for the last 17 months and to get to this point is both professionally and personally thrilling. They broke ground in only August of last year so the fact that such a beautiful facility was finished in such a short period of time is nothing short of amazing.
Here's a detailed look at the work we've done together over the last year and a half:*created and revised a messaging platform
*written and revised a business plan
* developed labels, packaging and a wide range of marketing materials with Joe Farmer of WhizBang Studio
* sourced software for the winery and restaurant
* written job postings
* sent 6 press releases and 7 newsletters
* pitched 300 writers and counting
* promoted 35 resulting articles, a video and radio interview so far... still counting!
* created a website and planned a new one with Brett Lytle of Lytle Works
* sourced bottle photography from Image works
* developed 3 social media platforms
* created two rock star wine clubs which already have over 150 members
* grown our contacts from 100 to over 1000
* hosted ground breaking and participated in Taste WA and Wine in the Pines
* created a website and planned a new one with Brett Lytle of Lytle Works
* sourced bottle photography from Image works
* developed 3 social media platforms
* created two rock star wine clubs which already have over 150 members
* grown our contacts from 100 to over 1000
* hosted ground breaking and participated in Taste WA and Wine in the Pines
* worked with the Suncadia marketing, PR and event teams
* written and revised a speech
* sourced dummy bottles, branded items, glassware and "This is how we roll" shirts
* written and revised a speech
* sourced dummy bottles, branded items, glassware and "This is how we roll" shirts
* had 8 meetings and spent likely 5 full 24 days on the phone
* sent thousands of emails and logged 5000+ driving miles
* enjoyed many delicious meals at Portals in Suncadia, Seattle and the Watts family homes in Cle Elum and Kennewick (can't wait to finally have one at the Hoist House!)
* seen a Tri-City Americans ice hockey game and attended a baby shower
* visited several Prosser area wineries
* shared dinner two IPNC Salmon Bakes
* met many family members, friends and business associates
* congratulated Don on his Puget Sound Hall of Fame award
* congratulated Don on his Puget Sound Hall of Fame award
* and last but certainly not least... welcomed two new babies
Whew! This is just what I've worked on... multiply that by a factor of 100 for the full team's efforts.
In February of 2009, I'd never heard of Cle Elum, Suncadia, or the Watts family. Thanks to an introduction by Tony Rynders, whom I'd met at a conference in June 2008, I became part of an incredible team and business vision. For all this I am truly thankful.
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