Back in August I was invited to a press tasting here in Los Angeles. Normally, this would not be something to write home about – or in this case, the entire world – but this particular event fascinated me. It was not at a trendy restaurant during the off-hours of a weekday, it was not during cocktail-hour at one of the dozens of ultra-luxury hotels in the city, and it wasn’t a dreadful luncheon.
Ruffino Wines was holding their press tasting at Voda Spa in West Hollywood – complete with manicures and massages. Upon first glance of the invite, I marveled at the balls-out audacity of securing RSVPs by offering free spa services and thus guaranteeing a completely captive audience of press. And all of this with no obvious connection to wine – especially Chianti.
Upon further inspection of the materials, however, I was absolutely taken. They had found a simple and luxurious way to work WITH the recession in order to market their wines.
HOW IT WORKED
In 2008, the New York Times ran two stories on The Lipstick Index – a term coined by Leonard Lauder of Estée Lauder that described his experience of selling more lipstick in times of economic hardship. The theory behind this term is based on the idea that when times are tough and big luxuries – vacations, cars, even couture clothing – are no longer realistic expenses, people seek small indulgences, like nice lipstick, to see them through the times. Sound like a stretch? Check out the article for yourself.
The brains at NY-based Cornerstone PR, Ruffino’s public relation firm, read the article and decided that wine could be a similar small indulgence. Riffing off this idea, Ruffino soon had a press campaign called “The Chianti Index” and set up tastings at Spas that featured wines in the $8-$25 range, along with Chianti-colored manicures.
So many companies in the wine industry seem to be putting on a brave face and pretending (at least in public) that either there is no recession, or that it’s not affecting them. In the meantime, behind closed doors these same companies are panicking about dropping prices, decreasing wine club membership, and the uncertainty of sales this holiday season. For marketing wine, behaving as though nothing has changed DOES NOT WORK.
Marketing a product to the masses as “the ultimate in luxury” will not be effective when the masses are not comfortable spending money on true luxury items right now. HOWEVER… Being able market that same product as a small indulgence – the flexibility of adapting to the mental state of the times, the idea of The Lipstick Index and Recessionistas – can mean the difference between a rise in sales, or a drop.
Imagine: Let’s say a particular winery has a $50 bottle of wine that is marketed as the absolute top-tier, ultimate in luxury, single vineyard, special lot, 18 months in new French Oak, yaddah-yaddah of it’s class. The current branding says “When you want the absolute best wine, this is the wine you get.” Now let’s look at a consumer. Doesn’t matter if they are 45 and lost 40% of their kids’ college fund in the stock market, or if they are 25 and making $30k a year, we’re looking at the average consumer that is feeling the pressure to cut back. Think about your own spending. About the conversations you’ve had with friends. The first cut-backs are on things we don’t need. The Ultimate in Luxuries. The nice-to-haves. The new german cars. The big vacations. The best new gadgets.
By continuing with the branding of “Ultimate in Luxury,” our example wine has placed itself squarely in the Should-Not-Buy category of products. The odds of our consumer purchasing this wine are pretty slim.
HOWEVER. If that same $50 wine adjusts it’s brand message from “Best of the Best” to “Small Indulgence,” it’s chances increase dramatically. If the message says “This is how you can pamper yourself – no vacation needed,” then that wine no longer resides in the Should-Not-Buy zone for our consumer, but rather the We-Deserve-This zone. The Stay-cation zone. The I-Can-Share-This-With-Friends zone.
What wine needs to do is take a tip from the Lipstick Index. By sticking to traditional branding, companies are making it more difficult for consumers to qualify spending their money. By adjusting their branding, companies are making it easier for consumers to make the decision to buy. I know it sounds simple. That’s because it is.
Don’t look at this as a magic bullet. Think of it as the bullet that wine companies can save by NOT shooting themselves in the foot.