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Should my Cellar Door be Appointment-only or Open to the Public?

It depends on your strategy. First, let’s look at the types of cellar door operations.

Types of Cellar Door Operations

The most popular cellar door (i.e. tasting room) is of course a room with a standing tasting bar, open regular hours, to all comers.

On the other side of the continuum is appointment-only, in a room with a table and chairs, sometimes with a tour of the operation, for 30-90 mins. It may be for individual groups or it may bring groups together into a time slot.

The continuum looks a bit like this:
1. Appointment only, sit-down, tour, wine and brand story
2. Appointment only, tasting bar, wine and brand story
3. Public (no buses), sit down, wine and brand story
4. Public, tasting bar, as much of a wine and brand story as possible
5. Public, tasting bar, as much of a wine and brand story as possible, no tasting fee

svb_tasting-room-survey-2014aTypes 1-4 all assume a tasting fee (probably reimbursed on purchase of wine).

The SVB Tasting Room 2014 report showed that on average 23% of cellar doors were open to the public and 18% private appointment-only. In Oregon 30% public vs 35% private, Napa 27% vs 22%, Sonoma 18% for both, Canada 15% vs 5%.

Appointment-Only Cellar Door

Assuming type 1 above.

Pros

  • Show and tell – time to not only give your brand story to visitors but also show the vineyard and/or winery and to explain why your wine is special. You’re making a personal connection with visitors.
  • You don’t need to run a full time cellar door, in fact you just need a room with a table and chairs and an appropriate liquor license.
  • The conversion rate and average order value is much higher because people understand the value of your brand and like your story. The SVB Tasting Room report puts the average order value at US$294 for appointment-only vs US$70 for public (Napa skews the order value average, I’d reduce this to below $200). Likewise conversion rates (people who sign up to wine clubs divided by people who walk through the door) are 2.7% appointment-only vs 1.7% public, anecdotally some appointment-only operations have 20% conversion rates (more about this in a future blog post).
  • Visitors also “self-qualify” by which I mean they only come if they are serious wine lovers who are truly interested in your brand, not people mildly interested in wine and just out for a good time. The former are much more likely to turn into long term high value customers, the latter probably won’t even buy wine.

Cons

  • The hurdle of appointment-only reduces the volume of visitors—this is a big issue unless you can really increase your conversion rate.
  • The time (and cost) per visitor is higher though you may mitigate this by having set times to bring people together into larger groups.

Open to the Public

Assuming type 4 above.

Pros

  • Much higher volume of visitors because it’s easier to attract foot traffic with no appointment barrier.
  • High volume means the operation can run on tasting fees augmented by wine purchase.

Cons

  • Visitor type is likely more mainstream and less likely to be a long term high value customer, which might be just fine for mainstream lower cost brands.
  • The average order value is lower and conversion rates are poorer.
  • Some in the group may not pay for tastings, they’re social not serious. The same SVB survey hints at this with an average of 35% who don’t pay or purchase anything.

Hybrids, winery cafes and restaurants

The best option may be to do both. Have a greeter who can direct high value customers to a higher end tasting experiences in the “back room”. It’s what Robert Mondavi does by having tours booked in advance (or at the time if you arrive when a tour has spots free). They finish off with a sit down tasting (while the normal tasting room is three visitor deep chaos).

One component not covered here is the additional revenue from winery restaurants and the overhead cost sharing of running both a tasting room and a restaurant. In short the more visitors who buy something a coffee, a wine, a lunch, or a wine club membership the more sense it makes to open to the public.

Conclusion

The more people in the door the less time you have to tell your brand story and talk through the wines. The less time to tell your story the fewer people are likely to convert to purchase wines or join your wine club. On the basis of converting a higher percentage of your visitors to be wine purchasers or wine club members, the appointment-only is the better option.

It’s also better if you have limited cash flow and can’t afford to build a special cellar door and staff it full time.

What’s your thoughts, comments below.

In my next post I’ll look at the numbers. Will a greater volume of wine club members make up for the lower conversion rate?

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