By: Andrea Steffes-Tuttle, who directs marketing at VineSpring, an eCommerce, club, and allocations software platform for wineries and breweries
The brewery market is competitive and consumers have lots of options when it comes to how they spend their time and money. There are limits in tasting room capacity and expansion through distribution can take a long time, so why not diversify your sales channels and go straight to the people?! A beer club is a great way to connect directly with customers and support a sustainably growing business.
Plus, with so many breweries on the scene, it’s getting harder to differentiate among the competition. Investing in a subscription-based channel, like a beer club, is a great way to build a loyal base of customers, who provide a reliable source of direct revenue.
Wine clubs have long been a critical sales channel for wineries and we see more and more breweries take a lesson from wineries, shifting their gaze toward clubs. While beer clubs have a few challenges that wineries don’t—namely limitations on shipping out of state—a club can still provide a lucrative sales channel for breweries. And, as of September 1, 2019, UPS has expanded their allowable interstate DtC for beer to 10 states.
We’ve seen tremendous growth in the wine DtC shipping market, spurred by a wave of legislative change over the last decade that carved out permission for wine producers to engage in this market. At this time, though, most states have not passed similar laws that enable DtC shipping of beer, meaning that at this juncture, breweries have a much more reduced map than wineries when it comes to shipping their product through common carriers. Instead, beer clubs may need to work with local retailers who have purchased the beer through the three-tier system in order to fulfill their orders. Find more information on the state of beer DtC shipping here.
Here are a few reasons to consider starting a beer club
It’s a scalable way to strengthen relationships with customers
It’s easier to keep a customer than to find a new one. It’s also easier to grow your business through your current customer base. And just like any club, membership provides your customers with an opportunity to connect with your brand in a more interesting way and receive the benefits of early access and guaranteed rights to your most coveted beers. This type of connection improves customer engagement and retention, making your current customer more profitable for your business, for longer.
Clubs are a reliable source of revenue
The value of membership programs is tremendous—up to 41 percent of retail revenue in the U.S. comes from repeat purchasers, who represent only eight percent of all visitors. Year over year, there’s an increase in consumers’ willingness to buy new product categories online, particularly those more traditionally sold in stores or on-site.
The triangulation of the growth in the subscription economy, the tremendous customer-value that repeat customers provide, and the move from in-store to online shopping is a perfect storm of opportunity for breweries who sell through the DtC channel.
New opportunities for marketing and customer engagement
The subscription model provides a chance to reach out to and engage with customers on a regular basis. As a member, these customers are part of your tribe, and are often interested in special offers and merchandise like notebooks, t-shirts, glasses, hats, etc. These all provide more opportunities for revenue generation.
Customers who are members are often very engaged with your brand and can be leveraged as an extension of your marketing team. Beer club members can serve as ambassadors and social influencers, representing your brewery across their own, personal social channels—offering an entirely new marketing channel.
Finally, the approaches to nurture, connect, and reward your members are just downright fun. Pick-up parties and invite-only dinners are just a couple of in-person events that serve to connect you directly with your customers and drive sales.
What do successful beer clubs look like? Here are a few examples
Modern Times’ beer club is entering its fifth year. As a “League Member” and for $350/year, customers receive “13 League-exclusive barrel-aged beers, first dibs on an extensive list of rare special releases, proxy pick-ups for online sale purchases, exclusive crowler fills, a totally sweet welcome party, illuminating preview tastings, exclusive League merchandise, advance tickets for special events, and so much more.”
Members can join the League by buying a membership on a set day and time, at the end of the year, for the coming year. There are a limited number of spots available and access to membership sells out quickly.
This scarcity creates excitement and energy around membership. And, through the League program, Modern Times secures payment for their barrel-aged beers and establishes a group of customers who are interested and willing to buy their special releases and attend their tastings.
The Guardians of Funk program is a quarterly membership program. It’s similarly structured to many wine clubs. For $105 per quarter, “Guardians” receive eight 375ml bottles—two bottles of four different types of beer per quarter. Other benefits include club-only releases and tastings, shirt and glassware, free samples at the Little Beast Beer Garden, and the ability to purchase extra members-only bottles online with discounts.
The quarterly structure provides members with the ability to choose how long they want to maintain their membership and the program helps Little Beast improve the efficiency of their operations with the ability to plan for production and sales, based on membership numbers.
The Bruery is a boutique craft brewery specializing in barrel-aged and experimental ales. In 2009, The Bruery released Black Tuesday, an imperial stout aged in bourbon barrels that in its first release landed at 18 percent ABV.
The team had been telling the story of Black Tuesday on the blog, and when the release day arrived, there was a huge line outside of the tasting room of people waiting to buy a beer that they had never tasted. This overwhelming interest inspired The Bruery to look to the wine club model and create their clubs to give beer enthusiasts a way to sign up for access to exclusive Bruery beers.
They offer two different types of membership in the form of “Societies”. The Preservation Society is a quarterly club that offers members a package with three bottles per quarter. The Reserve Society provides the choice of three Reserve Society options based on the customer’s preference for included beer, promotions, and bottle pickup options on both coasts. Each membership option includes new releases that are exclusive to members, included merchandise and bonus beers from the archives.
What are best practices for subscription programs?
Have a customer-first mindset
Consumer expectations are heightened. We hear this everywhere, but it’s important to think about how the shift impacts a brewery’s business. Services outside of the industry provide an increasingly sophisticated level of service and exceed buyers’ expectations.
As a result, today’s customers expect personalization, especially when it comes to subscription services. Buyers are savvy. They know that they are sharing their data and they expect that in return for the information they provide, their experiences with your brewery will be simpler and more tailored to their preferences.
When establishing your beer club, keep this in mind and identify ways that you can provide special offers and access tailored to your club members. Even something as simple as enabling members to select their favorite types of beer, and providing them early access to releases aligned with their selection, could go a long way.
Use systems to manage and automate as much as possible
Many breweries don’t have a huge staff to manage wine club members. In most cases, it’s just one person, in which case, it helps to lean on systems to automate some of the work. There are three areas to consider when you think about the technology you use and what to automate:
Which data do you have on your club members? How are you collecting that data? Where are you storing it?
Collecting simple information such as beer preference, source (how they found you), and pairing that data with their transaction history provides you with the inputs to automate and personalize your member’s experience.
You can collect this information through automated emails. For example, once someone joins your club, send an automated email requesting the desired information. And, if your email system connects to your club membership software, all of that data can be joined together to create personalized messages.
Using marketing technology to support your communication, your brewery has the ability to create a series of automated messages such as a welcome email, a message from the brewer, and a special offer for new members. Each of these messages can be personalized with the information you have about the member. Using their name, preferences, and purchase history, you can create rules that determine which messages to send to which members.
Another way to leverage automation is to create a series of messages and reminders that take customers through the beer club order process.
Each release, you likely have to create a series of messages to your members asking them to confirm their address and pick-up details. It’s not unusual to get no response from members. Instead of tracking these members down and sending them personal requests, an automation system that connects to your club management system can automatically send reminders to the members who haven’t provided the necessary information for their release.
Email is an important communication channel for breweries to connect with customers, share their stories, sell products, and communicate club logistics. When evaluating systems, look for one that includes automation and works hand-in-hand with your club management system.
Sign Up and Membership
To enable this kind of automation, you need the right technology. The systems that are going to work well for your business vary, but no matter what, look for platforms that openly integrate with other systems to make sure that you can manage your club and combine all of your data.
Start with a club management and eCommerce system, like VineSpring, that allows you to create and manage your club packages, rewards, and access to exclusive products. That way you don’t have to manage members and their payment information by hand and you can easily connect club and purchase data to marketing and product management systems.
A flexible system will grow alongside your business, scaling and continually supporting your customers as their needs and your business changes.
Start Simple and Grow
Your club management software should be able to handle a variety of club types. Start off simple and create clear expectations for a group of friendly customers. As word spreads and you’re able to test and refine the process then you can develop a more complex club program.
A Solid Foundation = a Successful Beer Club
Once the foundation is solid and there are systems in place to help support the club structure, it’s time to add the finishing touches and launch the program.
Remember, clubs are not only a way to attract new customers, but the perfect way to retain and nurture your current customers. Think of club members as future brand evangelists and external marketers for the brewery.
Honing in on what works for your customers may take some time, so don’t be discouraged if things don’t take off right away. With the right system in place, you should be able to gauge what is working and what isn’t. Learn from your customers’ needs and openly ask for suggestions.
With great beer, technology you can rely on, and clear messaging, your beer club is bound to open a new, fiercely loyal channel to grow your brewery.