Wine Clubs

It seems that out of every second envelope I open these days spills a letter, brochure or flyer for a wine club associated with the initiator of the post. I decided to count them up.

Apart from the monthly mailing I get from the Wine Society, and the bulky post I get from Cellarmaster, both of whom are in the solos business of selling wine, I have received another eight entreaties to participate in wine buying from other organisations in the last fortnight alone.

They come from credit card companies, retailers with charge cards, airlines, industry and professional associations, and a whole host of others. Newspaper publishers even want to get in on the act and insert invitations with the renewal notices for my newspaper deliveries. Today I received a letter announcing the National Trust was launching a new wine club for it's members. What has wine got to do with the position or brand values of the National Trust?

It strikes me that almost none of the myriad wine club offers can demonstrate a point of difference. They all claim to have wine no one else can get, from boutique little wineries that are so small that they can't supply the majors; they all claim to be able to provide wines which I can't find in any high-street retail shop; they all claim to know more about wine than anyone else, or to have a more extensive selection or a better selected range. The fact is that to an average punter like me they all appear the same and the clamour from them is deafening.

This seems to be analogous to how many business operators get into business in the first place. Rather than thinking about customers, and what they want or need, they think about what they can do.

You can imagine the thought process behind some of these wine club launches. They sit down and think along these lines - 'We might be a professional association, but we have a database of university educated professionals, who have high disposable incomes and in surveys of our member base we have found 6 out of 10 have an interest in drinking wine; they trust us and are affiliated with our brand. We could provide them with wine and it would be seen as a 'value-add' and will generate some incremental revenue for our association. Most importantly we like wine ourselves.'

And so they get into the wine business. And how do they do that? Of course they need scale to make the economics work, and they don't really know anything about procuring, selling and distributing wines, so they outsource their wine club to one of the handful of providers who also supply wine club services to all the others. So they have the same offer as everyone else differentiated merely by the badge of their association.

They get into the wine club business because they can. Not because they have a startlingly different proposition or perspective; not because they have spotted an unmet need, an opportunity to step into a gap; probably not even because they have abiding passion for wine.

Powerful, high growth businesses are those that do something differently and better than anyone else does or can do in favour of their customers. By innovating and creating value for their customers they build at least a temporary monopoly which allows the creation of enterprise value. This is what nudie did when I created it and this is why it grew like a weed, carried along by the energy and enthusiasm of it's delighted customers.

If you are going to build a business don't do so just because you can; ensure you stand out from the crowd and deliver something to your customers they can't get anywhere else. Otherwise you risk being just more junk mail.