Transcript:
Peter Crosby:
Welcome to Unpacking the Digital Shelf where we explore brand manufacturing in the digital age.
Peter Crosby:
Hey everyone. Peter Crosby here from The Digital Shelf Institute.
Some leaders in e-commerce were able to see the storm clouds gathering over advertising-driven performance marketing, and invest strategically to test and grow new muscles for attracting and keeping customers. Joe Fisch, CEO of Wine Access and his team saw those shifts coming and have expanded the ways in which they reach new customers and how they invest in content and superior customer service to keep them and grow their value over time. It's an interesting roadmap for any brand looking to diversify their acquisition and loyalty strategy. And Joe joins Lauren Livak and me to lay it all out.
Peter Crosby:
Thank you so much for joining us on the podcast today, Joe. The alcohol and beverage industry has been super innovative in the way to reach customers. And what you're working on at Wine Access, you're at the forefront of that as far as I'm concerned. We're just delighted to talk to you about it.
Joe Fisch:
Wonderful. Well thank you so much for having me. It's my pleasure.
Peter Crosby:
Yeah, you've got subscriptions and partnerships, community events. It seems like you're really listening to the customer and driving to create a really exceptional and deep experience online, so we want to dive in. But your career, I think, is an unusual one in e-commerce. You started out in financial audit, to chocolate, to wine CEO. So I would just love for our listeners to hear your path to get to this focus. It's fascinating.
Joe Fisch:
Yeah, absolutely. Yeah, it's a bit of an accidental path, but I think the more and more people I talk to, you see that more and more. I originally studied accounting in college and went to work for one of the Big Four. I worked as an auditor at PwC. So when you think about auditor, to wine e-commerce CEO, that's probably not the most logical path, but it ended up working out pretty well.
So when I was at PwC, my two biggest clients were Kendall-Jackson and Foster's Wine Estates, which is now Treasury. So they have Beringer, Meridian, Penfolds, those types of brands. So I really got this affinity for wine, and I remember... it was 2007/2008, the wine industry not doing as well at the time. So I did get to use my, what I would say is partner-employee discount. I used it a lot. So I was getting access to wines and drinking wines that I never would be able to drink. I mean I was in college drinking Mickey's 40s, and now I'm drinking Beringer Private Reserve '03. So I came a long way within a year and I got a huge affinity for wine. I was like, Wow, this is so special. This is amazing. It also started an expensive habit when I then moved on to different clients and that same sort of discount didn't carry over. So —
Peter Crosby:
My takeaway so far is that PwC drives you to drink.
Joe Fisch:
I think you could probably ask anyone who worked there and maybe... you'll probably get that answer nine times out of 10. I'm sure they don't want me saying that, but yeah.
Peter Crosby:
Maybe auditing in general. I won't-
Joe Fisch:
Maybe auditing in general. It's not their fault as a firm, it's just a tough —
Peter Crosby:
It's a tough business, yeah.
Joe Fisch:
So I had always thought about, oh, I want to eventually get back into wine, but the options tended to be limited. I didn't necessarily want to work for a winery, because I didn't want to tell the same story over and over. So I wrote down that dream and put it elsewhere and continued on with my career. So then I eventually moved into M & A consulting, primarily for private equity clients in the retail and consumer space. And that's where I got my first experience in e-commerce, because being on the west coast, a lot of private equity investment went into e-commerce. You think about San Francisco, probably one of the e-commerce capitals of the world, along with Seattle.
And then, the opportunity to work for the Ghirardelli chocolate company came around. So I always say that I'd be a terrible software person, because if I can't eat it or drink it, I'm not going to understand it. But I was like, oh, I understand chocolate. It wasn't the greatest thing for my waistline, but it was such a great thing to... and it's such a great place to work for. So again, stayed within that consumer products arena, but was hoping to eventually make the jump to wine. And then the Wine Access opportunity came along. So my predecessor was looking for someone who had run a corporate finance department, a lot of us in the Bay Area knew e-commerce, so maybe the funnel gets a little bit more narrow. And then the kicker was they had to know wine as well. So there were three of us probably in the Bay Area.
I had a buddy who ended up passing on the job, and he's like, "Okay, you should go talk to Joe. And then if Joe doesn't want, there's one more person left." So when it came up I said, "Oh wow, this is amazing. This is exactly what I'm looking for." And I ended up pretty much taking the job. I don't even know if I negotiated salary. I was like, "I'll do it." And normally it's a bad sign if you're a VP of finance, and that's why I came in as, didn't negotiate the salary. You're like, uh-oh, maybe that's telling. But luckily it worked out pretty-
Peter Crosby:
It all worked out.
Joe Fisch:
And then in 2018 was then promoted into CEO. So that was the short, or I guess long version of my path to Wine Access.
Peter Crosby:
No, I think that's so cool, because the skills that you developed across that are really important in a CEO; to be able to understand the books and know where the growth comes from in digital and e-commerce. So I was wondering, when you transitioned into the CEO role, what was that transition like? What did you need to either relearn or learn anew to be able to shift to that level of leadership?
Joe Fisch:
Yeah, I mean it was definitely... Those first six months were really tough. Growing up and coming up in my career in finance and accounting, that's the language that you speak. And your boss speaks it, and then the people who report to you tend to speak it, as you move up through various organizations. So it's very easy. I always equate it to saying, okay, great, we're speaking Spanish and everyone in finance is speaking Spanish. Now you're obviously going to be interacting with other departments, and over that time you're learning a different cadence of speak, and how do marketers see the world, how do sales people, how do wine professionals? But a lot of times, it's always done through a finance lens, because maybe 80% of your interactions would be within your own department.
So then, when getting promoted into CEO, now it's time spread pretty evenly across all of the various departments. And it's almost as if it's like, okay, I need to learn five or six different new languages, and I need to be very, very fluent in them. And I think that was the piece that took a lot of the time to adjust to. It's like, okay, when thinking about from a marketer's perspective, how are they viewing it? Because I think it's one thing to view it through a financial lens and how it relates to marketing. It's another to be like, okay, actually no, this is a completely different language and a completely different approach to how the marketing team is speaking with the consumer, or the operations person is speaking with a third party carrier. So that took a lot of trial and error, but fortunately I have a great team and a very patient team, which is probably most important, and able to navigate through that. You never get there. You never fully get there. So each day I'm always learning new things as it relates to all the different departments and department heads.
Lauren Livak:
And Joe, I have to ask this question, because I feel like you rarely find someone who goes from finance to e-commerce. So I know a lot of e-commerce professionals, whether they're in a center of excellence or marketing, they have to deal with finance a lot. And to your point about language, sometimes there can be a disconnect. So if you had to give one piece of advice, now sitting at the CEO level and knowing all the different language, for people in the e-commerce or digital seat trying to work with their finance partners on retail media budget or just budget in general, what would be your piece of advice that you would give to better collaborate together?
Joe Fisch:
Yeah, I think this isn't just from a finance perspective, it could be from any department level. I think if you really care about the product and you're really curious about how all the aspects of the product are touched from different levels and different perspectives, that goes a really long way. When I went to Ghirardelli, it was like, okay, I'm going to learn everything I can about chocolate, whether or not it's going to have a direct relevance to how to run a finance department there, that it may, it may not. But I found that actually being really curious about all the different aspects of it, people can feel that. They can tell, oh, is Joe just trying to work down my budget to get a little bit more lean to report to corporate? Or is it like, hey, he's really trying to understand what we're trying to do here and be a real partner in it.
So I don't know, I always say approach things with curiosity and demonstrate you actually care, and it's even better if you do care. Feigning careness works well, but actually caring works even better. I've always found that that ends up being one of the best ways to approach it.
Lauren Livak:
At the end of the day, we're all humans, and we're all going towards the same goal. So I love that. I think that makes a ton of sense, moving kind of cross-functionally and working together. And you have such a fascinating background, so thank you for sharing that. But let's dive into the brand side for you. So you're doing a lot of exciting things and you're really focusing on the experience. So can you talk us through some of the exciting things you've been doing from start to finish to really make sure that the customer experience is best in class?
Joe Fisch:
Yeah. So I think we always start off with what are the points of differentiation and how do we do it. Because I think if you don't have that down, then the customer experience and everything else that follows kind of falls apart, because it's not rooted in any sort of key values or key... how you do it. So we look at the four different components we have are wine curation, content, perfect providence, and then just superior customer service, and we kind of tick through each one of these.
So when we think about wine curation, we have one of the best teams, I think the best team, pound for pound in the industry, that's flying all over the world and finding the best wines in the world. So we have a master of wine, which is one of the most difficult achievements in the world of wine. We have one on our team and there's about four... I want to say around 430 in the world, master som, so similar; very difficult to achieve designation. It has about equal numbers of master soms in the world, just over 400. We have the former beverage director of Morimoto, a foremost sake expert. So it's this amazing team who have dedicated their lives. They've probably tasted more wines and forgot about more wines than most people will experience in a lifetime. So they are a core pillar of what we do and how we can derive amazing value to our consumer.
From a content perspective, and when we think about how we go to market and how we provide value to the consumer, every wine that goes out, it's a 500 to 1,000 word narrative. We're trying to reach consumers not just through the written word, but through podcasts. So we launched our podcast last year, and we're onto season two this year. Doing video for wine club. So every wine club that we put out, there's a video with our chief wine officer, and another one of the wine team members talking through, "This is why we selected the wine, this is why we think it's so special." So how do we continue to have multiple different touch points from a content perspective? So I'm excited to see where else we can take that.
Perfect providence for us, really important. So making sure that the wine that you're drinking actually came from the winery that it was supposed to. But I think even beyond that, there's things like from a shipping perspective, if we make sure that every bottle is taken care of. So when it's following a route from one of the distribution centers, either on the East Coast or the West Coast, if it's getting shipped to you in the middle of the country, we're analyzing what are the temperatures that it's going to be traveling through, will it need ice packs, will that wine be compromised if we're shipping it? If it is, then we'll hold it back. So we're very, very particular about how we take care of the product.
And then lastly, just a superior customer service. Our customers are our lifeblood. So consistently have Net Promoter Scores in the high 70s, low 80s. So I've been really happy the last couple quarters. We've had consecutive quarters above 80, which is just... I even look at it sometimes and I'm like, "This can't be real." And then I'm going through each year the ones I'm like, "Yep, I remember that customer, I know that one." And really, really happy with where that's going. But obviously keep looking how can we continue to push that up? So that's how we think about the components or the basis for the brand experience.
And then off of that, you have the offshoots of the different things that we do, whether it's partnerships with the Michelin Guide, or with Decanter, or with Sunset, to in-person events with the Classified Growth. So we have one this week with Château Pontet-Canet, where the proprietor is going to come in, and we're going to sit down with 40 of our top customers in San Francisco and do a private tasting just for them, tasting through back vintages of Pontet-Canet. So these are the things that even in a virtual world, we figure out, how can we create a brand experience that goes beyond that, just to name a couple.
Peter Crosby:
And Joe, the way in which you drive your funnel these days from the top all the way around to loyalty really has changed, because so many of the things that underpin e-commerce through advertising have really gotten more complicated and challenging in the last year or so. And I was wondering how has that shift... but one, were you relying on performance marketing in its sort of classic sense to a great degree? And how has your approach to the market shifted in the face of that and what have you discovered along the way?
Joe Fisch:
Yeah, great question. We tend to be a pretty analytical numbers driven group, go figure, with having a CEO who's a finance guy. But even from our marketing standpoint, our CMO, heavy growth marketer, is really tied into the numbers, kind of a finance person's dream. So we were heavily performance marketing, and really most of our focus, growth marketing, the Facebooks of the world, paid search, and then would supplement it with some brand marketing. I always feel like podcasts are another area... I always feel like that's kind of a combo of brand and growth. But we were almost 100% that way.
Then we started to work with some of these other partnerships, which you can either put in brand marketing or quasi performance. And when the Apple OS X changed with a lot of the privacy settings came about, we started to shift a little bit out of Facebook and paid, and move our mix from let's say 99% or 100% performance marketing to more to these partnerships, and then a little bit of brand marketing as well, because we'll see if you do brand marketing, somehow your organic or direct traffic pops, and I don't think that's a coincidence, but it still tends to be probably a pretty low ratio, maybe 15% or so is in what I would call "brand marketing". And we're going to continue to shift more into large scale partnerships, which have a little bit longer of a sell cycle in the sense that they don't hit... it's a little bit easier. It's like, okay, I'm going to pump X amount of dollars into Facebook, and I know that's going to turn out y number of customers.
With the larger brand partnerships, it takes time. But when they do hit, you get a really sticky customer. So that's where we've, especially in the last I'd say year, have really focused our efforts.
Peter Crosby:
And when you think about that stickiness, does it come from the halo effect of the partner, or is it because you went at them almost from a brand perspective and talking less about the transaction and more about your differentiation? What do you attribute that stickiness to?
Joe Fisch:
Yeah, I think there's a combo. I think it's a combination of a number of things, both of which... both of the things that you had said. So I think there is... when you think about a Decanter, or a Michelin, or Sunset, you're speaking to customers from a psychographic standpoint that make a ton of sense; travel, food, leisure, all kind of mixed together. So I think there's one... that you have a really good fit. Then there is a component of they're subscribing to Sunset, they're subscribing to Decanter. So when we're doing a wine club with them, the behavior that they've exhibited already with a Michelin or with a Sunset, it's an easy thing to kind of replicate. It's not a far jump. We're not asking to make a far jump. We're like, okay, you subscribe to this too.
Then there's a tremendous amount of brand loyalty that they probably have, because if they're willing to subscribe to one of these different partners, then I do think there is this halo effect that ends up happening as well. And then the fourth is, if you're Sunset say, "Hey, we're bringing in Wine Access, who's this premier partner in the wine space, and it's providing just another benefit to you. We think that you'll like it because we share some more values, and we're bringing it to you and speaking to you through wine in a way that we think that you'd like." So I think those are three or four of the reasons why you have that sort of stickiness when it comes to these partnerships.
Lauren Livak:
And now, when you're working with all these different partners, whether it's the magazine or you're doing an event or anything digitally related, that's all different types of content that you have to provide to the customer and they might see it in multiple different places. So when you think about content, especially in your industry, I know you said having really robust explanations and things like that, but how do you make sure that you're answering the right questions based on where the consumer is getting their information, either through a partnership, through your online site, how do you focus on those things?
Joe Fisch:
Yeah, so I think it's when we're setting up these partnerships, so let's say it's a Michelin guide, I think they're going to have... they may have a different way in which they want to consume or see content than a Sunset versus someone who may just be looking for a quick transactional wine on the website. So from a Michelin perspective, that obviously is very food heavy. So if we're talking through a subscription with Michelin, it will be getting recipes associated with the wine that we're offering in that particular shipment from the chef. And then if we're working with the som there, why the som loves that wine, and why Vanessa or someone on our... Vanessa is our Chief Wine Officer, why she loves that wine. Each one of these components needs to be really specific and talk to that particular consumer in a way in which they want to receive it.
If it's Sunset, it tends to be very focused on West Coast wines and West Coast living. And so again, for that, we're not going to pull our reasoning from Germany on it, and talk to it that way. And it may be a little bit more of an integrated story as opposed to something on the website, where if someone's shopping from a store experience, or... okay, give me the cold, hard facts. I want to know what are the tasty notes. Assess this wine for me. Is it high in fruit? Is it low in acidity? And just get to the point, give me a quick narrative tagline, and then I'm going to make my buying decision, and done. So we always try to make sure that whatever we're doing in each one of those areas is always deeply rich and a deep expertise on it, but the way in which we may go about it may be slightly different.
Lauren Livak:
I think that goes a lot to some of the conversations we've been having around personalization. Usually, we used to think of personalization as like, "Hey Joe, this is for you," or, "Hey Lauren, we think this might be a recommendation." But it's really evolving more into how are you reaching the consumer the way that they would like to see the information, experience the information, or based on their location, to your point about people in California with a specific kind of wine. So it seems like you're really focusing on curating those personalized experiences in everything that you do.
Joe Fisch:
Yeah, absolutely.
Lauren Livak:
Would you agree?
Joe Fisch:
Yeah, absolutely, because I think if you say, hey, we have this algorithm that's going to pick out this wine perfectly for you, that gets, I don't want to say a little boring, but it probably does. So we still do that. We still have all the technology and the data behind it to be like, this is the exact wine for you. But then it's like, how do we take it from that base recommendation say, okay, and then this is why this wine is just relevant in general, here's the story behind it, this is why it's a beautiful wine. And I think the fact that we're able to do both of those different components becomes a point of differentiation and something that we always continue to figure out, like how do we evolve with it, how do we make it bigger, how do we make it better?
Peter Crosby:
And Joe, is your content... we actually had on the podcast this week as the week we are recording it in, talking to a printer who's now tying printed materials into the e-commerce content lens. And are you totally digital content with your clients, or do you send them out catalogs and postcards? Are you doing any sort of that old fashioned US mail kind of stuff?
Joe Fisch:
Yeah, we haven't done a catalog, but every single shipment that goes out, you'll get a really nice card stock, an 8 x 11 insert that will have a picture of the wine. It will remind you how is the wine profile, so talking through the levels of fruit intensity, level of acidity, do you need to decant the wine or not, what is the serving temperature, when is the drinking window? So you'll have all kind of the basic facts that we talked about, like if you're making a buying decision on the website. And then, we'll have a reminder of the story. So it'll be a truncated version of the 500 - 1,000 word narrative of what were the key points of why we love this wine, why it's relevant, who are the people behind it, so every single wine goes out with that. And that's something that we continue to get amazing feedback from our customers.
They love it because they can do a quick read of it, and then file it away. And when they have their friends over, they look like a genius. They look like a master of wine when they're there. So, we try to make sure-
Peter Crosby:
A little card in their hand, writing pen on their palms. So, that's what I would have to do.
Joe Fisch:
Yeah, exactly. We like to make sure our customers look good in front of our friends. That's the other path of what we do. So we always make sure the wine's great and then we want to make sure they look really good too.
Peter Crosby:
Yeah, over time, do you build out cohorts of wine maturity for your different customers? Are you able to tell if one of your customers is a serious... knows they're freaking wine and just want to belong to Wine Access to be part of getting access to the things that maybe they can't necessarily get somebody else? And then you have your sort of wine beginners that are just stepping into it. Are you able to split them across, target them differently based on what you know about their experience, or is it you just provide really helpful content across all of those cohorts, and people just absorb what they want?
Joe Fisch:
So we definitely see it in the buying behavior... because we will look at, depending on how we send a wine or how we put it in front of someone, we'll look at buying behavior. We'll look at what are they clicking on, what are they reading, how far are they reading down on the content, and then that will help determine what path we put them in. So if someone's only looking at classified growth Bordeaux... we probably wouldn't email them with the $17 or $15 Malbec. We know that the likelihood, when we run the affinity analysis on all of the different buyers and cohorts, that's probably not a good idea. But we do still have some people who know exactly what they want, but they still want to see every single piece of content because they're like, "The story is just so fun."
But I'm going to really generalize. I think with certain clubs, so let's say for instance our internal discovery club, a lot of times that may be people on the earlier path of their journey. That's not to say it's exclusive, but I think that's a good place where a lot of people start. They're like, "I like wine, but I don't know that much, and I kind of want to experiment with different wines." And you'll get six of those... six wines four times a year. And then, I think then when we think about the typical kind of store buyer, just general e-commerce store, or the daily offer from an email marketing perspective, people going in there tend to know exactly what they want.
So the club, I think in some regards, you may have people earlier on in their journey. And then, when we start to move towards general store and daily offer, so the daily offers are single SKU per day, and they tend to be a little bit farther along in their journey. But that's not to say from a club perspective, we don't have people who know exactly what they want, but they still may say, hey, for a couple of months, or excuse me for a couple of quarters, they may want to jump into a discovery platform.
Peter Crosby:
Yeah, that makes sense.
Joe Fisch:
But very broad generalization, but it's directionally right.
Peter Crosby:
You're in an industry, which it's this interesting combination of regulation, like every state having its own thing, very complex rules and regulations, and how you can behave, I would imagine in each state, all the way to the romance of it all. You need to cover such a wide swath of capabilities to do your business, I would imagine. Is that a fair... because we've talked to... we've had a few people on the podcast in the ALC/BEV space and it's always got this additional dimension of complexity that... and also in the... we've had people on from the cannabis space, a lot of it's kind of similar. And do you find that to be the case, and does that take a lot of infrastructure and attention to be able to keep up with all the changes that are constantly happening in your industry?
Joe Fisch:
Yeah, and I think it's not... whether it's chocolate, or whether it's alcohol, whether a food product, I think any person or any company operating in this space has to be on top of it. I know at Ghirardelli that was obviously a huge deal, because you're dealing with a consumer food product. Same thing from Wine Access perspective and the marketing of wines, and there's certain places that you'll never go, like a Utah. And then there's other places that tend to be more open. So I think every person in this space is constantly... well, they should be paying attention to it and making sure that they're aligning and building the infrastructure to make sure that they're operating above board.
Lauren Livak:
And I think you have a unique approach and creative ways in trying to do that, right? Because there might be restrictions around content, or around actually purchasing, but being a part of a community and learning about something, or reading a magazine, or seeing a collaborative event is a different way of reaching the customer, it seems like without having to go through a lot of some of those legal requirements, we will actually have product in hand, where maybe they can get it the way that they need to within their state, but they can have an experience with you that they might not have been able to have through just a plain purchase on your e-commerce website.
Joe Fisch:
Yeah, I mean I think content's a great way of putting it. We don't operate outside the US, so you could be in a different country and we still have people who will... I guess it ends up being free marketing for whoever they're buying from over in Europe or in Canada, so they should probably send us a thank you note. But there's no reason why they can't come and see Vanessa talk about a wine with the Michelin Club. So even if you're not buying wine from us, you can still benefit from the robust content. And we always take thank you cards if you want to send them our way.
Peter Crosby:
We'll get you one out later just for being on the podcast show, because actually this has been really cool. When we first spoke and it's on so many people's minds, what customer acquisition and retention and upsell looks like, and cross-sell looks like in this new digital environment. And I really appreciate you sharing the way in which you've expanded the ways how you go to market, with partners and others to spread your risk and also attach yourself to more lucrative, more sticky customers. I just think it's a really, really interesting and forward-thinking strategy that you guys have taken. I really appreciate you sharing it with our audience.
Joe Fisch:
Oh, of course, of course. Yeah, we have a great team. So as long as I make them play nicely in the sandbox, they end up being the ones who do all the work. And yeah, I just got to make sure that they're happy. But I appreciate it and thank you so much for having me on.
Lauren Livak:
Thanks Joe.
Joe Fisch:
All right, thanks.
Peter Crosby:
Thanks again to Joe for sharing his own personal journey and the new one for his customers. Swing on over to digitalshelfinstitute.org and become a member to connect with all our resources. Thanks for being part of our community.
