How Network Geofencing Can Help Wineries and Tasting Rooms Increase Foot Traffic (Repost from Hearst Bay Blog)
As the most substantial growth period in U.S. wine consumption draws to an end, California wineries are looking for ways to take mobile advertising to the next level. Only a few years ago, all you needed was a website to increase foot traffic to your tasting room. Today, even the smallest, most boutique wineries are using best practices like brand storytelling to optimize their websites, and offer rewards like free tastings to increase the number of customer interactions on sites like Yelp and Facebook. As a result, even wineries that have optimized their online presence are facing increased competition for coveted consumer attention.
Geofencing refers to the practice of setting up a virtual boundary around a business using GPS or RFID (radio frequency identification) that sends a text or notification to mobile devices that cross it.
How It Works
There are two basic types of geofencing: App-based and network-based. App-based geofencing, as the name implies, requires building an app, and linking your geofence to the app. Because it tends to be more expensive for businesses (you have to create an app) and requires users to have the app installed and running to receive push notifications, we don't recommend app-based geofencing, and the remainder of this article will focus on network geofencing.
To receive calls and text messages, your mobile device is continuously communicating with nearby cell towers that accurately triangulate your position. If your device encounters a Wi-Fi signal or SSID, it captures that data and updates your location with even more precision. These services are known as “region monitoring” and are the reason your phone knows where you are at any given time.
Network-based geofencing utilizes these Wi-Fi and cell tower communications to track when a mobile device enters your pre-defined target area and trigger a response, usually a push notification. Because this type of geofencing doesn’t require consumers to download an app, visit a website, or match with a search algorithm, it is compatible with 92% of U.S. smartphones. As a result, Salesforce reports that 53% of consumers visited a specific retailer after receiving a geofencing alert, with 50% admitting that their visit was unplanned. Perhaps most importantly, Salesforce reports that 80% of consumers who use location-based services indicate that they want push notifications from businesses—meaning that your ad is not viewed as intrusive spam or junk mail, and many companies report a 90-97% read rate.
Let’s take a look at a hypothetical case study to see how this might work:
Vintage Vines Case Study
Vintage Vines is a small, family-owned winery that just opened a tasting room in Sonoma, CA. Because of budget limitations and real estate availability, this tasting room is located just off of the main drag, a short block and a half away from the town center where the most popular tasting rooms are nestled around the open and inviting Sonoma Plaza. Although Vintage Vines has already earned high reviews on Yelp and has a best practices traditional marketing strategy that includes actively engaging their social media followers and leveraging their wine club, the owners believe they are only getting 60% of the foot traffic that similar tasting rooms nearer the plaza receive.
After experimenting with online ads and free wine tasting offers on Yelp with only limited success, they hear about geomarketing from a customer and decide to try it. After reaching out to a few different agencies, they settle on one that helps them create a geofence that includes the central walking zones of downtown Sonoma, as well as two streets that are popular because of the free parking they offer. Based on prior research with their customers, they decide that the geofence will trigger a push notification offering a complimentary glass of wine with any tasting purchase. The ad will read “You are near our 2nd Ave locally owned tasting room. Come in today and receive a free glass of wine with any $10 tasting.”
Choosing a Saturday in June for the first test of their new geofence marketing system, the owners of Vintage Vines experienced both trepidation and excitement as they waited for the final tally of customers at closing time. As they wave goodbye to the last smiling tourist of the night, their sommelier hands them a piece of paper with the day’s tally on it. They had served almost three times the usual number of customers! Their experiment with geofencing was a success, and they looked forward to increased foot traffic throughout the rest of the season.
Why Geofencing Works
Geofencing works because it targets people who are already in the vicinity of your business. In places like Sonoma, Napa, and Paso Robles, where wine tasting is the main draw for tourists, a high percentage of the people passing through a geofence boundary will already have a strong inclination towards doing a wine tasting. A push notification from your business may be the only thing needed to direct them towards your particular winery or tasting room rather than a competitor’s. Even if you are operating your tasting room in an area that is outside of traditional tourism zones, demand is high enough among Californians in the Bay Area that geofencing can increase sales almost anywhere.
Consumers in 2018 are savvy, and anything that looks like an ad goes straight into the recycling bin in most households and workplaces. The same is true of digital advertisements that make it through the spam filters in most email inboxes. However, even though geofencing has been around for a few years, the novelty has not worn off, and conversion rates remain high, while costs are up to 57 times lower than other forms of digital advertising. Additionally, there are signs that it is not the novelty that makes geofencing useful, but rather the focused targeting that the technology allows. Wineries and tasting rooms that use geofencing and push notifications to offer discounts can elicit excitement and even gratitude among consumers seeking enjoyable experiences and affordable luxuries. After all, who wouldn’t be happy to discover a free or discounted wine tasting when walking through town on vacation?
A Creative Solution for Price Sensitive Connoisseurs
Silicon Valley Bank has identified a growing “frugal-hedonist” consumer category that is far more price sensitive than traditional age-segmented cohorts. The growth of this category is reflected in the decreasing number of visits to pricey wine regions like Napa and Sonoma, where the standard tasting fee is $38 and $21 respectively, and the influx of visits to wine regions like Oregon and Washington, where standard fees are $13 and $9, making wine tasting more of an affordable luxury.
Because geofences can be set up anywhere and anytime, creative marketing solutions for wineries seeking increased sales might include setting up geofences around strategically targeted grocery and liquor stores with push notifications linking to coupons for bottle purchases. Alternatively, you might even consider setting up a geofence around indirect competitors like restaurants, breweries, and taprooms to entice visitors who are looking for a casual and relaxed evening drinking with friends.
When creating a push notification for customers, ensure that you stand out from the crowd by creating advertisements that have an emotional connection with customers. Wineries can appeal to shared values by using terms like “sustainable,” “organic,” “family-owned,” and “female-owned” (of course, these should already be part of your brand story). Moreover, you can tie promotions to holidays or special events, like the Women’s March, Breast Cancer Awareness, and Red Nose Day.
In addition to using geofencing to push advertising to nearby consumers, you can also use the same technology to keep track of foot traffic at your competitors’ locations. This technique can help you track the effectiveness of your ad campaigns. For example, if you are having a slow day, but your competitor sees the usual amount of traffic, you should try a different push notification. However, if you are both seeing reduced traffic, there may be seasonal or regional reasons why customers are not visiting that day.
Increasing Direct Sales
Industry experts have been clear about changing consumer preferences in the wine industry. As millennials grow into the largest segment of the market (forecasted to occur in 2026), wineries that depend on the tasting room experience as the primary path to direct sales would do well to take note. Millennials are more price sensitive than other cohorts, and seek both a luxury adult beverage experience and “a good deal.” Wineries interested in increasing direct sales should experiment with using geofences to offer promotional coupons for bottle and bulk discounts.
In the crowded market of Northern California, where wineries and tasting rooms draw 23.6 million people each year, geofencing offers a way for wineries and tasting rooms to customize their marketing strategies to target consumers at key locations with custom advertisements. Such efforts are almost guaranteed to net a positive return on investment. Entering this location-based advertising space now, while the technology is still relatively young, also gives wineries and tasting rooms an opportunity to gain market advantage and be ahead of the curve.
Whether your business is selling a product or a service, an online presence is vital if you want to maximize your growth. Putting your business on Yelp is a quick, easy way to get online, reach more customers, and if you have a company website, boost your SEO.
More than 142 million users use Yelp every month to find crowd-sourced reviews of local businesses. That’s 43% of the United States. The majority of users (66%) are college educated, 44% have an income level over $100K, and age is fairly evenly distributed across the spectrum.
According to a BCG study of 4,300 small businesses, the average Yelp listing results in an additional $8,000 in annual revenue. And a Harvard Business Review study on restaurants showed that each star increase can result in a 5-9% increase in annual revenue. Taking into account that setting up your profile takes less than 5 minutes, it is definitely worth the effort.
It Doesn’t Matter How Great Your Product Is If People Can’t Find You
If you show up in a Yelp search result, someone in your area wants to buy what you are selling. That means you are missing out on potential customers if you aren’t listed. Particularly if there are few competitors in your area.
This is a screen shot of the results when I search for “beef jerky” near my home. You wouldn’t know it, but there’s a boutique beef jerky store with a fantastic product right in the center of the shaded area. Since it doesn’t have a Yelp listing, interested consumers who searched for the product this company sells, in the area the store is located will spend their money somewhere else. It doesn’t matter how great your product is if people can’t find you.
List Your Company, Even If You Don’t Have a Storefront
It’s worth listing your company even if you do most of your business online and don’t have an actual storefront. Adding your business to Yelp not only increases visibility to Yelpers, it also boosts your listing on search engines like Google, Yahoo, and Bing. Plus, if you are willing to let people drop by your location or make deliveries, you increase the odds of local sales and save on shipping costs.
How To List Your Company On Yelp
As I mentioned, it takes less than 5 minutes to set up a Yelp profile, and it’s totally free. Simply go here and click the “Claim my business button,” then fill out your name, address, business category, and website. Yelp will verify within 1-2 business days.
If you decide to invest a little more time on Yelp, you can also respond to customers, offer paid promotions (which I usually don’t recommend), and take advantage of free analytics.
How to Get Positive Reviews
Yelp prohibits trading discounts or services in exchange for positive reviews, so how can you ensure that your company maintains a positive rating? The same way you ensure that you stay in business in the first place—by keeping your customers happy. In my experience, when you exceed expectations, customers will be happy to leave a positive Yelp review if you ask them to.
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I’m convinced that everyone has a really great idea for a product or service that would make life just a little better. It wouldn’t even surprise me if you had two or three ideas right now that would somehow ease frustration, solve a problem, or streamline a complicated process. I’m also convinced that most people have an inner voice that whispers fear and doubt and keeps them from acting on their ideas. Today I want to highlight someone who ignored the voice of negativity and took action, becoming incredibly successful along the way.
When Sara Blakely first got the idea for seamless panties, she wasn’t the billionaire fashion guru that she is today. She was a door-to-door salesman selling fax machines, and she was irritated by the way her panties showed through her business suits. So what did she do? It wasn't complicated. She snipped the legs off some pantyhose and created a working prototype. When her prototype worked and she realized there was nothing like it on the market, she bought a “how-to” book at Barns & Noble and wrote her own patent application.
From there, it took persistence, hard work, and more than a little luck to build Spanx into a billion dollar company. But in my experience, most people never get to the critical first step of building a prototype.
So what would it take to create a prototype of one of your ideas? It might be as easy as cutting the legs off of a pair of pantyhose. But if you need more help, here are some practical takeaways from the Sara Blakely/Spanx story to give you guidance:
1) Pay attention to your "felt needs." If you experience frustration, chances are others do too, so find a solution that works and try to sell it. This is the core of entrepreneurship. Sara's problem? Visible panty lines. Her solution? Using thinner material.
2) Always be ready with an elevator pitch. When you have an idea or product, you need to develop a 60 second pitch clearly explaining the problem, the solution, and why your product is different than anything else on the market. You never know when you'll have a chance to pitch to potential backers.
3) If you get permission to give a pitch in person, do whatever it takes to make it happen. When Sara was finally given the chance to pitch to Neiman Marcus, she knew she wouldn’t get a second chance so she dropped everything, got on a plane and flew to Dallas
4) If you have a good pitch, but people aren't receiving it, figure out why. In Sara's case, it was a gender barrier. Men just don't have experience wearing panties, so when she pitched to men, they couldn't see the problem. When she finally pitched to a female buyer at Neiman Marcus, she had to take her into the women's restroom and show her how the product actually works to convince her to place the products.
5) Don't give up. Others may not give you the time of day, but if you know that your product is valuable and that there is demand for it, persevere. We all love overnight success stories, but most of the time what looks like a catapult to fortune and fame from the outside took years of hard work behind the scenes.
6) Just because you got your product into a store, doesn't mean you can relax. There's a lot of legwork necessary to make sure it sells and stays in the store. Sara got Spanx into department stores pretty fast, but they weren't selling because their placement was not intuitive for her customer base. She made it her full time job to stand in the department store telling people about her product, and even went so far as to move the display to a more prominent location without asking management's permission.
Do you have an entrepreneurial success story, or a question about how you can get started on your own path to success? Leave a comment, or click the contact button and get in touch. And be sure to share on Facebook and twitter!
I like this definition of leadership from Greg Dess: "Leadership is the process of transforming organizations from what they are to what the leader would have them become. This implies dissatisfaction with the status quo, a vision of what should be, and a process for bringing about change."
Based on this definition, are you a leader? How about the managers, directors and executives in your company? Are they exercising leadership, or simply maintaining the status quo?
Notice that all three aspects of this definition are necessary for good leadership. If you are satisfied with the way things are and can't see any way to improve, there's nothing to lead people towards. Hence, dissatisfaction is necessary because it points out the problem. I guarantee that your life is not perfect, and your workplace includes areas of friction where change would be beneficial. If you want to increase your leadership skills, begin to be intentional about seeking out friction areas. Watch the people and processes around you for areas of improvement and you will soon find them. Ask questions. "What if I..." "How could we..." "Why aren't we..." The squeaky wheel will become apparent and you will have the opportunity to lead others in applying the grease.
But dissatisfaction alone is not sufficient. I've worked with a lot of people who are dissatisfied with the way things are, but have no vision for what could be. They complain to their peers, grumble to their friends and family about how bad they have it, and become jaded and sarcastic about almost all aspects of life. But they have no idea what to replace the status quo with.
If that describes you, the road to health involves intentionally asking yourself "What makes me angry, frustrated, or annoyed about this situation?" "What do I really want?" "Why am I here, instead of somewhere else?" Many people stick around too long in an unhealthy situation because they have never allowed themselves to give an honest answer to these questions. Leadership starts with yourself, and if you are so dissatisfied that it leaves you bitter and jaded, it may be time for a drastic change of scenery. Find a new job, go worship at a different church, get a new group of friends. Wherever that bitterness is coming from, it will keep you in a downward spiral until you either change the situation, or give yourself the freedom to get out.
People who have dissatisfaction and a vision don't become jaded because they have hope. That vision for what "could be" is one of the greatest energizers available to humankind. It provides direction and a goal to strive towards. A vision can become a rallying point for friends, coworkers, and even strangers. Think of all the people who showed up in Washington D.C. for the women's march in January, 2017, or all of the disenchanted individuals who camped in public spaces across the United States during the Occupy movement. Dissatisfaction provided the impetus, and a vision was born for what could be. But what was the result of these movements? It's not completely clear.
While publicity was immense for the Women's March and Occupy, both lacked a process for achieving change. As a result, whatever net effect these movements had are minimal compared to what could have happened if stronger leadership had been in place.
What applies to these large movements also applies to much smaller situations, including your own circumstances. If you have both dissatisfaction and a vision, use that energy to create a process. Write down a plan. Set goals and objectives that are measurable (measurable means they are not abstract; you could either achieve them, or fail to achieve them). Now you are exercising leadership, as you have not only cast a vision, you have also created a road map and have started down it with everyone else who was captured by your vision.
Instagram is the kind of success story entrepreneurs dream about. Founded in 2010 by Kevin Systrom and Mike Krieger, it gained over 100 million users within its first two years, and today has grown to more than six times that number.
If you are interested in founding your own tech startup, here are 10 takeaways from Instagram that can help you succeed:
1. Learn to forecast the future. Ask, "What will people do with this technology that nobody expects right now?" When Instagram was founded, most people were carrying camera phones in their pockets, but there was no great way to share the photos. Kevin Systrom and Mike Krieger found a way to make photo sharing easy.
2. Entrepreneurs don't always invent something new, sometimes they develop a new way to use a technology that already exists. As Kevin put it in his interview with Guy Raz, "Everyone knew you could take photos with your phone, they just didn't know the photos could be interesting." Can you think of a technology people are already using, but not fully implementing? Figure out how to increase implementation, then monetize it!
3. Sometimes a little legwork pays off. Cash was in short supply in Instagram's early days. On one occasion, Systrom and Krieger heard that some investors were having a meeting and showed up with a working demo. The investors were so impressed with the product, that they signed on immediately.
4. If an investor tells you to change something, change it right away! Meeting with an interested investor creates a sense of energy and movement. If you wait to make your next move, energy will wane and the investor may think you are not serious and is likely to pull their backing.
5. Don't ask why people are not using your product/company, ask why they continue using it! Loyal customers are worth ten times more than new customers. They are your brand advocates, and are likely to do some of your marketing for you. A significant portion of your energy should be focused on satisfying and retaining these customers.
6.Figure out a way to make people feel better, and your invention will be a success. In the language of economists, people consume a product or service because it increases their "utility." That is, the satisfaction a consumer derives from your product, minus the price they paid for it, is greater than the satisfaction they would receive from another product. Instagram wasn't the only photo sharing app launched in 2010, but it was the first to use filters well. Filters make your photos look better, and that makes you feel better.
7. Ask friends and family for input on your ideas. Getting outside input is one of the quickest ways to leap over a hurdle. And friends and family are the easiest people to get feedback from. Kevin's wife was the one who suggested adding filters to Instagram, and she came up with the idea while vacationing in Mexico. (Maybe I should add another tip: Work hard, but take a vacation before you burn out!)
8. Innovation can happen in the way a product is shared. Instagram was the first app to allow open sharing, so you can follow people without waiting for them to accept you as a "friend." This was another reason for the app's success.
9. When you make a mistake (and you will), apologize and be transparent. Remember the whole fiasco about "Instagram now owns the photos you post, and will use them in advertising?" According to Systrom, that misunderstanding occurred because they didn't put enough effort into writing their terms of acceptance. Instead of blowing off critics or hiding it, they apologized for their mistake and moved on.
10. It takes grit to succeed. When the stars align and your product works and you have investors who back you, getting your product to market is still going to take sweat, sleepless nights, and a strong desire to succeed. This is what it means to be an entrepreneur.
How about you? Do you have any tips for success? Share them below, and be sure to follow me on Twitter.