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Direct Wines Case Study


crm case study
Customer

Direct Wines

Sector

Mail Order Retail

Success

Increased order value; improved customer loyalty

Redspire is one of the most diligent technology partners I’ve worked with. I consider them to be an integral part of our set-up and central to how the IT Services team have supported Direct Wine’s growth.

- David IvesHead of IT ServicesDirect Wines

Redspire and Direct Wines – a long-term partnership

Direct Wines is the world’s largest independent wine merchant and has been supplying top quality wines to more than 700,000 customers since 1969.

The business specialises in selecting small production wines from a diverse portfolio of producers. In turn, they retail their wines to the end consumers through a number of different trading identities including Laithwaites Wine, The Sunday Times Wine Club and Wall Street Journal Wine.

Although this model leads to savings being passed on to their customers, it also means that Direct Wines have to manage the full supply chain which traditionally consists of producers, distributers, wholesalers, retailers and, of course, customers.

To add to the complexity, the business also trades under a number of different identities representing some global brands – each with their own specific marketing approach, product range and customer profile.

The challenge of managing a customer relationship management (CRM) that supports the many pillars of Direct Wine’s business falls to David Ives, who has been the Head of IT Services for the last 5 years.

“With multiple relationships across different product suppliers, 3rd party affiliates and internal technology solutions, we certainly do have a myriad of relationships to manage”, he said, “but we’ve always promoted a can-do culture within our team which means that we believe our systems should be a solution – and not a barrier – to a particular challenge. ”As one example of how his team has had to adapt to their environment, David highlighted the shift in the way their customers buy wine: “Increasingly, our customers research and select products online. Our business has had to evolve more dramatically in the last 5 years than it has at any time in the previous thirty years”, David continued, “this has had a marked effect on how our systems interact with each other”.

Since 2005, Redspire has been a central component in supporting the development of Direct Wine’s CRM system as Rick Lyle, Senior IT Consultant, explains. “Direct Wine’s success is built on well-established processes and a specific business model which means that they require a customer relationships solution to match. In most cases they aren’t able to buy a solution ‘off-the-shelf’ which means that whenever they encounter a challenge they come to Redspire to help with the solution. ”Rick continued, “Some of the most common challenges we run into involve integrating the CRM with other systems, for example, mobile and online systems to cope with the diverse customer facing interfaces”.

The 3 ‘C’s: Consider the Customer’s Customer

Redspire take a pragmatic approach to every project which is appreciated by David: “Rick and his team always explore if a solution is possible within the existing CRM framework avoids expensive and unnecessary solutions which allows us to remain competitive.” Rick agreed, “With every project we work on, we adopt the same process. Following a robust requirements gathering period, we explore the challenge from every angle. Importantly, we also examine the Direct Wine’s customer experience. We put ourselves in their shoes and think about how we would want to be contacted. This tactic has led to some innovative solutions.”

Behavioural targeting is one such innovative solution that has recently been deployed. As a customer engages with the company, the CRM captures a record of their preferences and purchase history so that they are offered a personalised wine selection based on their own choices and products that they have indicated they like or dislike.

Furthermore, any printed or online engagement with the customer can be dynamically populated based on their profile within the CRM meaning that correspondence is heavily personalised and promotions that are specifically relevant to that individual can be positioned.

Increasing Average Order Value

Redspire’s relationship has led to much commercial success too. Rick highlighted the work to drive more revenue from their existing customer base. “Direct Wine’s distribution model means that customers will pay the same delivery cost for a case of 15 bottles of wine as they would for 12 bottles.” Rick continued, “They identified a potential price promotion whereby customers would be encouraged to take an extra 3 bottles with their order, for the same delivery cost”.

Redspire identified a simple solution within the existing CRM framework which would alert sales agents at a key moment in the process when the offer was relevant and could be applied.

Crucially, sales staff would have relevant customer information at their fingertips enabling them to recommend specific products based on relevant historical behaviours, for example; wine from a favoured region, ‘similar to’ offerings or price promoted items. Since the introduction of the up-sell system, Direct Wine experienced a dramatic increase in the average order value and improved margin of their existing customers.

Building Customer Loyalty

Similarly, Redspire were instrumental to the success of Direct Wines loyalty scheme. What on the face of it appears to be a simple “points mean prizes” scheme is in fact a complex set of rules and business logic – particularly when the requirement is for the system to be able to handle the redemption of points in real time.
Redspire provided both business and technical expertise to develop and bespoke the CRM system to be capable of ‘on the fly’ calculations of the points accumulated and points redeemed. Offers were tailored to account for the value of the points and customers encouraged to take advantage of the offers they were eligible for.
From Direct Wines perspective, the scheme was an outstanding success.

David Ives said: “The initial results from the introduction of the scheme showed a take up of over 110,000 customers who have spent over 445m points and purchased goods worth over £18,000,000. The numbers speak for themselves.”

The relationship between Redspire and Direct Wines has developed over an 8 year period and coincides with the greatest shift in how the business markets and sells it product.

Rick Lyle puts this down to Redspire tenacious approach to how projects are delivered. “We consistently work towards developing a technology solution which satisfies the original business objectives. We won’t hand over a project unless each stakeholder is completely satisfied.”

Direct Wines’ David Ives has the last word: “Redspire is one of the most diligent technology partners I’ve worked with. I consider them to be an integral part of our set-up and central to how the IT Services team have supported Direct Wine’s growth.”

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