Luxury Brands and Customer Engagement. Lessons for small Australian wine producers

Australia’s small winemakers are, on the whole, highly competent at translating the abundant natural capital of Australian wine country into high quality wine. Australian winemakers excel at wine production. The Australian industry has been less successful at inspiring the customer to pay a premium for the quality of its product.

In recent times two opportunities have emerged for small winemakers to improve profitability and better access customers:

• “Premiumisation”, which relies on lifting desirability and consequently price in both domestic and export markets.
• Increasing the percentage of wine sold directly to the consumer and retaining margin otherwise captured by wholesalers and retailers, primarily in the domestic market.

The author identified that prestige or luxury brands are able to command price premiums by rousing customer desire. Through visiting many of these brands across different industries the aim of this is to observe whether any of the techniques utilised by luxury brands might be transferrable to small winemakers and other primary producers.

The report offers commentary as to the common characteristics of luxury brands. These are typically businesses that offer products, which, like wine, exist “beyond necessity” (Csaba, 2008). Importantly, the author concludes that it is not necessary to be a luxury brand in order to adopt some of the techniques and concepts that drive the success of those businesses.

During the process of research and interviews, three key elements of success exhibited by luxury brands were identified:

• They understand their unique “Brand identity”.
• They seek to understand their customer’s emotional drivers of consumption.
• They are master storytellers and present a consistent image.

The author recommends that by being more attentive to these three elements, small Australian winemakers may find success in persuading customers to more highly value their product and consequently pay a premium for it. Importantly, this will require a shift from production-centric communication to framing marketing strategies based on improved engagement with emotional triggers that influence customer behaviour. Tools such as customer led design may be adaptable for determining which emotional desires customers hope to satisfy under different wine buying scenarios. Communications can then be tailored which tell authentic stories that better engage with underlying customer desire. This sort of analysis would be of advantage not only to individual winemakers, but also Australia’s generic marketing efforts under the Wine Australia banner.

The report offers insight into a range of practical activities observed that were utilised by the businesses visited. Interestingly, many of these are simple, fairly basic activities that can be undertaken by most businesses. Small winemakers should take heart that there is no ‘silver bullet’ to success and that simple techniques applied with discipline appear to be the basis for much of the success enjoyed by successful luxury brands.

A key recommendation is that small winemakers should focus at least as much of their energy on marketing and communications as they do on production. The most successful brands of all categories are likely to be those who recognise the importance of this and take steps to resource those components of their business.