The amount of power bartenders, wait-staff, sommeliers, and retailers (dubbed "Influencers) have on consumer choice is a highly important component in marketing brands. But who really knows how much influence they actually have? WSD sat down with the president of MSS Multi-Sponsored Studies, Kevin Moran, whose company offers marketing tools to help maximize a brand's perception in the eyes of the "influencer" group. These tools, delivered in the form of clear, crisp recommendations on how best to program influencers, are based on large-scale influencer surveys (in 2006, 10,000 bartenders) and are designed to help a brand increase its share of recommendations on-premise. Kevin formerly worked in sales, marketing and operations at United Distillers USA before it became Diageo and is a former bar-owner.
Megan: What is the percentage of business that goes to an influencer?
Kevin: It varies by category, but about 46% of all beer and spirits go through the on-premise channel. That's a good average. I can tell you that vodka is pretty much a 50/50 split these days, and is even leaning more towards on-premise because a lot of things get introduced there. As new introductions appear in a category, you tend to see a swelling in the on-premise in the early years of product introduction or run-up's in terms of volume in an on-premise category and then, as brands move to success, incremental volume develops in the off-premise. And by the way, just so you know, 15 years ago that probably wasn't the case. You were more likely to see a 60% off-premise and a 40% on-premise split.
The shift from off-premise to on-premise has a lot to do with the power of the influencers, who were affected by the more aggressive ways the spirits company's are now marketing - especially since the introductions of flavored malt beverages. Things like Smirnoff Ice have opened up the world of advertising, allowing more flexibility for spirits companies to be able to market and create an image that gets people into accounts to try their product. Remember, bartenders are consumers as well, so we see them being affected by consumer media as well. This is very similar to the effect that DTC advertising for Rx brands in healthcare has on physicians. Prescription writing has increased dramatically for advertised Rx brands in the US, and this occurs despite the fact that consumer awareness levels for those same Rx’s may not have increased. So the physicians are being affected.
Megan: So are spirits companies better at marketing than wine? How do the two categories compare?
Kevin: That's a tough comparison. Wine and beer kind of get thrown into one category and spirits in another. In the spirits world, for example, there's a code of conduct that all the major companies adhere to. This is not to say in any way that beer and wine companies do not adhere to the same code of conduct. However, for spirits companies, Things like, 'we will not portray scantily clad women in advertising' generally speaking, or 'we will not portray in advertising people that appear under the age of 25, or 'we will not include things in our advertising that may seem attractive to children' are voluntarily off-limits in communications. I think this is healthy and good and has helped them succeed in gaining wide acceptance.
The spirits companies have restricted themselves voluntarily from doing those things, along with refraining voluntarily from advertising on general media. In the cable world it's been a different story. Spirits companies were early adopters and recognized the growth potential (and reach) of this medium – and spirits companies have benefited from that greatly.
But the introductions of things like Smirnoff Ice 7 or 8 years were helpful as well. Their beer-like profiles opened up advertising to traditional media. And that's why you saw the first Smirnoff Ice advertisements at the Super Bowl 6 or 7 years ago. Now just think for a second what that did for the image of Smirnoff vodka. All of a sudden it achieved broad, general awareness, and since then they've turned the base vodka brand (Smirnoff Red) from a primarily off-premise brand in the US with no significant presence in the bars or real image 7 years ago to a monster in the on-premise. In the case of Smirnoff Red, Diageo has programmed bartenders masterfully as well to really drive performance on-premise.
Wine, however, has always been a more toned down product, more focused towards affluence, discriminating palates, and just a softer kind of communications set. And I think it's because of its image and the consumer set that has gravitated to the premium wines and super-premium wines. Taking away maybe your jug wines of the world, of course, but it's just been more of a sophisticated type of engagement. The wine category has not done anything really to cause problems out there in terms of messaging and the like. In fact, they have done a lot of clever things that the spirits companies have started in the last ten years: to commission health studies, to identify ways moderate consumption might benefit health, and to communicate the health benefits that may be associated with moderate alcohol consumption.
Megan: What do you find drives recommendations on-premise?
Kevin: What drives recommendations on-premise is not what most companies thought 5 years ago. This was one of the main hypotheses of our business model when we started, that incentives are not what necessarily drive influencers to recommend.
Companies were spending a lot of money, where legal, on incentives and things like trips to the distillery and prize contests that would reward the influencer for recommending a brand or doing something on behalf of the brand. I think that the conventional wisdom was that giving some type of personal reward to bartenders would drive recommendations. Our company felt and feels very strongly that was not the case.
While we clearly see that there is a place for those kinds of incentives, we clearly felt that they do nothing more than get you a temporary kind of loyalty to a brand, and once the incentive is over, the loyalty disappeared. There is something more important you can do to build your brand in the eye of the influencer over time and in this case the bartender.
The number one most important thing to a bartender - and I'm speaking about spirits now - is being seen as highly credible, an expert confident in what he or she recommends. Basically having an understanding of the product is important to bartenders, and it's not just something that is isolated to the spirits, beer and wine worlds.
It's something that we have found in 58 different product categories. The greater the perceived expertise a consumer has for the recommender (the bartender), the more likely it is that the consumer will accept that recommendation, especially when social standing is hanging in the balance.
It's something that is intuitively obvious, but something that needed to be proved. Things like training education are incredibly important because bartenders want to sound like they know what they're doing. Personal enrichment beyond just getting a prize is really important and probably the most impactful in terms of driving recommendations for spirits on-premise.
In the wine world, the two key influencers are the wait-staff and the sommeliers (sommeliers tend to be located in more high-end accounts). A sommelier is much more interested in being perceived as the expert of the wine. They know the temperatures, the region the wine came from, knows the blending mix, can tell you which year was the best vintage, and the like - which is very different from the wait-staff.
The wait-staff is much more interested in very simple things. First of all, is it in the account? Most of them don't even know all the wines that might be in the account. Secondly, they typically just don't have enough time to learn about all of them in the way a sommelier would. Sommeliers are typically male while the wait-staff is about 50/50. The wait-staff is much more interested in knowing what's there and being visually reminded through prompts, through simple programming like table tents. So when the wait-staff is juggling 8 tables they'll know what's in the account because it's right in front of them, and they can recommend it.
Also, there are differing degrees of wine knowledge amongst different wine-staff. What you find is that wait-staff who are 50-plus years old generally, and especially those working in higher-end accounts, are more knowledgeable with products. Under that age break it's kind of a same world, less knowledge. The less knowledge they have, the more visual prompts they need. Also, the more knowledge they have, the more similar the recommendations patterns are for the brands and the higher quality of the brands they recommend.
This is Part I of a two part interview, so more to come tomorrow.
Megan: What are the characteristics of "push" brand vs. "pull" brand programming?
Kevin: There are certain brands in spirits, let's say, that a bartender will give great ratings to when asked about its quality.
But when you see how often the brands are being recommended, it's really low and kind of confounding. Those brands that tend to be smaller in volume but may have positive ratings on them in terms of quality and crispness, those brands really need that "push" incentive to get the bartender to recommend them. Bartenders tell us very clearly that if they have the opportunity to recommend either Grey Goose or a smaller volume, high quality brand, they're going to recommend Grey Goose unless the small volume brand is willing to do a little something extra. That's basically what it comes down to.
Megan: What is the difference between bartenders and wait-staff needs?
Kevin: Bartenders are very interested in education and wait-staff are not. Wait-staff are interested in having some kind of knowledge of things, okay, but they have many more tasks to deal with than just serving drinks. They're just looking to be informed - and they're very impressionable and willing to hear new things - but they can't get bogged down in the details.
The downside to that is there are 420,000 bartenders in the U.S. and
2.2 million wait-staff, so you can't dismiss wait-staff importance because there are so many of them. Wait-staff make close to the same amount of net recommendations per year as compared to bartenders - something like 3.48 billion for the wait-staff and 3.8 billion for the bartenders. So yes, serving drinks is only a small part of the wait-staff's responsibilities, but you still have to deal with them.
Kevin: When we first started out, we had many clients said that while 'I am concerned about getting recommendations, I'm also really concerned about making sure more of my products gets purchased from the establishment to increase my sales.'
The simple answer we gave them was: 'well, if they're recommending more they're going to run out of your brand quicker, and they're going to have to buy more.'
That's the simple way to look at it. But another way to look at it was to try to identify how influential a bartender was, even if he/she is not the owner, at actually stocking the bar. What we found through our work is that 82% of bartenders tell us that they are either very influential or extremely influential in what gets put into that bar.
Bartenders think of themselves as the owners, it's their bar whether they own it or not. It's their town and they're the mayor. So they feel that it's their duty to tell people what it is that they should be drinking, and a good bartender revels in that kind of opportunity.
