3. Business Context
• Focuses on handcrafted wine and modern
casual dining
• Offers signature menu and Cooper’s Hawk
wines, made in its private winery
• Opened first location in 2005 in the Chicago
area; now located in seven states
• Each location has distinctive layout and
décor, but all have same warmth and
elegance that guests have come to expect
• Offers the following:
• Upscale casual dining restaurant
• Full-service bar
• Private barrel-aging room
• Napa-style tasting room and retail gift store
• Wine Club memberships
4. Competitors
• Cooper’s Hawk faces many competitors, both locally
and nationally, that serve in the wine club industry
(direct competitor), wine club and restaurant industry
(direct) or wine industry (indirect).
Direct Competitors
While many
competitors exist,
many are online
or not in the
same regions as
Cooper’s Hawk.
6. Situation Analysis
Total Revenue
• Revenue decreased 4.64% from year 1 to year 2.
$3,354,876
$3,199,162
$3,000,000
$3,250,000
$3,500,000
Year 1 Year 2
Total Revenue
7. Situation Analysis
Yearly Revenues Broken Down by Wine Club and Restaurant
Number of
Customers
Monthly
Fee
Monthly Total
Wine Club
Revenues
Yearly Total
Wine Club
Revenues
Total Year 1
Restaurant
Revenues
Total Year 2
Restaurant
Revenues
Silver 2,901 $16.99 $49,287 $591,455 $1,257,743 $1,152,887
Gold 1,364 $33.98 $46,348 $556,184 $949,492 $898,635
TOTAL 4,265 - $95,636 $1,147,640 $2,207,236 $2,051,522
8. Situation Analysis
Average Number of
Transactions
• Decreased 6.49% from year 1 to
year 2
Average Transaction Amount
• Decreased .7% from year 1 to
year 2
Year
1
Year
2
33867
31668
$66.02
$65.56
$65.30
$65.40
$65.50
$65.60
$65.70
$65.80
$65.90
$66.00
$66.10
30,500
31,000
31,500
32,000
32,500
33,000
33,500
34,000
34,500
9. SWOT Analysis
STRENGTHS WEAKNESSES
• High reputation in the industry: 200 wine awards
nationally and internationally
• In-store pick-up service
• Food program that pairs food and wine
• Relatively inexpensive monthly fee of ~$18.99
• Customized banquet or party design service
• Tasting room with house-made wine designed for
better drinking experience
• Reward system was designed without difference in
segmentation - as a result, all customers are
treated the same
• Competitors also have mostly vintage, classic
wines
• Monthly delivery service is very expensive
• Tasting room has limit of drinks before purchase of
membership
OPPORTUNITIES THREATS
• The healthy eating trend has contributed to the
growth of wine drinking in the last decade
• Wine is a popular gift to give someone
• The drinking trend has shifted towards lighter
alcohol and healthier ingredients
• House-made wines are now able to compete with
non-house wines
• Strong competitors have most of the wines
Cooper’s Hawk has in its tasting room
• Some competitors have personal tasting profile
records for individual customers to tailor products/
marketing
• Customers expect high levels of customer service,
especially Wine Club members
15. Segmentation Overview
• Only customer files with complete data were analyzed
• 4,265 customer files included in segmentation scheme
(66 were missing data)
• Customers were split into two groups before segmenting
because the average total revenue varies substantially
between them:
• Gold: 2-Bottle Wine Club members
• Silver: 1-Bottle Wine Club members
• Fixed base segmentation was used because it allowed us
to define clear breaking points based on variables that
differentiated customers. Furthermore, we could clearly
determine our mid-spenders to target them in marketing
communications; these customers have high potential to
be migrated to high-spenders and thus increase future
revenue.
• Total revenue and length variables were used because
correlation among these two variables was low (.189).
Because the Wine Club is a subscription-based service,
length becomes a vital variable. Furthermore, nearly all
customers in the database are active customers, meaning
that recency isn’t a vital variable. In addition, the
correlation between total revenue and recency was
relatively high (-.341).
16. Segmentation Overview
(continued)
Silver Club Members
• Total Revenue Break Points:
• Median, 50th Percentile: ~$1,800
• Even breaking point to distribute
segment sizes
• 90th Percentile: ~$3,000
• Isolates high-revenue customers who
require different communication
messages
• Length Break Points:
• Median, 50th Percentile: 68 months
• Even breaking point to distribute
segment sizes
18. Segmentation Overview
(continued)
Gold Club Members
• Total Revenue Break Points:
• Median, 50th Percentile: ~$3,400
• Even breaking point to distribute
segment sizes
• 90th Percentile: ~$5,200
• Isolates high-revenue customers that
require different communication
messages
• Length Break Points:
• Median, 50th Percentile: 68 months
• Even breaking point to distribute
segment sizes
21. Segment Descriptions
Segment #/Name Description
1
Vintage
Full-Bodied
High total revenue; longer than median length of relationship
2
Unripe
Full-Bodied
High total revenue; shorter than median length of relationship
3
Vintage
Medium-Bodied
Moderate total revenue; longer than median length of relationship
4
Unripe
Medium-Bodied
Moderate total revenue; shorter than median length of relationship
5
Vintage
Light-Bodied
Low total revenue; longer than median length of relationship
6
Unripe
Light-Bodied
Low total revenue; shorter than median length of relationship
22. Silver Club Total Revenue
6%
4%
25%
15%
22%
28%
Vintage Full-Bodied
Unripe Full-Bodied
Vintage Medium-
Bodied
Unripe Medium-
Bodied
Vintage Light-
Bodied
Unripe Light-Bodied
Percentage of Total CustomersSegment Name Total Revenue*
Vintage Full-Bodied $667,357.32
Unripe Full-Bodied $466,190.86
Vintage Medium-Bodied $1,649,705.49
Unripe Medium-Bodied $984,820.42
Vintage Light-Bodied $991,235.99
Unripe Light-Bodied $1,109,125.34
Total $5,868,435.42
* Based on two years of restaurant revenue and
approximately seven years of Wine Club revenue
24. Silver Club YOY Change in Revenue
• Revenues are
declining within all
segments of Silver
Club customers,
except the vintage
full-bodied.
• Segment 2, unripe
full-bodied, is
experiencing the
greatest decline in
revenues compared
to other segments.
1 2 3 4 5 6
Year 1 $256,430 $212,212 $495,779 $355,506 $221,770 $307,502
Year 2 $261,925 $179,495 $461,601 $335,830 $214,505 $290,989
% Change 2.1% -15.4% -6.9% -5.5% -3.3% -5.4%
0
100,000
200,000
300,000
400,000
500,000
600,000
25. Profile: Silver Club Members
Vintage
Full-Bodied
Unripe
Full-Bodied
Vintage
Medium-Bodied
Unripe
Medium-Bodied
Vintage
Light-Bodied
Unripe
Light-Bodied
# of Customers 166 112 738 443 646 800
Total Revenue $667,357.32 $466,190.86 $1,649,705.49 $984,820.42 $991,235.99 $1,109,125.34
% Contributed to
Total Revenue
11.40% 7.90% 28.10% 16.80% 16.90% 18.90%
Average Length of
Relationship
76.83 months 63.14 months 79.22 months 62.99 months 74.88 months 61.57 months
Average Total
Revenue in Wine
Club
$1,305.36 $1,072.79 $1,345.87 $1,070.25 $1,272.19 $1,046.05
Average Total
Revenue in
Restaurant
$2,714.86 $3,089.62 $889.50 $1,152.82 $271.79 $340.35
Average Recency 0.669 months 0.696 months 1.875 months 1.535 months 5.397 months 4.634 months
Average Frequency 29.67 28.50 13.62 15.54 5.37 6.26
26. 13%
6%
28%
16%
16%
22%
Vintage Full-Bodied
Unripe Full-Bodied
Vintage Medium-
Bodied
Unripe Medium-
Bodied
Vintage Light-Bodied
Unripe Light-Bodied
Gold Club Revenue
Percentage of Total CustomersSegment Name Total Revenue*
Vintage Full-Bodied $667,772.48
Unripe Full-Bodied $303,248.73
Vintage Medium-Bodied $1,433,909.06
Unripe Medium-Bodied $794,073.33
Vintage Light-Bodied $814,228.02
Unripe Light-Bodied $1,098,471.64
Total $5,111,703.26
* Based on two years of restaurant revenue and
approximately seven years of Wine Club revenue
31. Targeting StrategyTargeting Strategy
We selected vintage medium-bodied
segments as our targets for both Sliver and
Gold levels for following reasons:
• Longer relationship with Cooper’s
Hawk and more engaged (30% of
total transactions)
• Contribute more than a quarter of
total revenue
• Average check size is $60, which is
well below that of vintage full-bodied
($97) and unripe full-bodied ($82).
• The average total revenue is $2,834,
which is way below the top spenders
at $5,038
• The average annual frequency for
Gold level is 11.36, which is half of the
full-bodied segments
1 2 3 4 5 6
Check_Total $82.53 $97.11 $59.69 $67.58 $47.29 $50.57
$0
$20
$40
$60
$80
$100
$120
Average Check Total – Gold & Silver
1 2 3 4 5 6
TotalRevenue $5,038 $4,870 $2,834 $2,775 $1,975 $1,841
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Average Total Revenue – Gold & Silver
32. Silver Club Vintage Medium-Bodied Profile
Total Revenue Contributed $1,649,705.49
Percent of Total Revenue Contributed 28.10%
Average Length 79.22 months
Average Total Revenue Spent in Wine Club $1,345.87
Average Total Revenue Spent in Restaurant $889.50
Average Recency 1.88 months
Average Frequency (2-year period) 13.62
Club Type Red: 34.1%
Sweet: 4.1%
Variety 52%
White: 9.8%
Most Recent Revenue Center Banquet: 0.8%
Bar: 25.2%
Patio: 3.8%
Server: 47%
Tasting Room: 23.2%
33. Silver Club Vintage Medium-Bodied Profile
• Contribute largest portion to Silver Club’s total revenue (28.1%), but their
average total spend is moderate compared to the vintage and unripe
full-bodied segments.
• Indicates there is a larger number of customers that fall into this
segment.
• Typically spend more through restaurant as compared to Wine Club.
• Extremely frequent and recent with a long-term relationship with
Cooper’s Hawk that provides evidence of their preference for the brand.
• The variety club type is preferred by these customers as they receive one
bottle of wine per month and desire a mix between receiving red and
white wines.
34. Gold Club Vintage Medium-Bodied Profile
Total Revenue Contributed $1,433,909.06
Percent of Total Revenue Contributed 28.10%
Average Length 79.88 months
Average Total Revenue Spent in Wine Club $2,714.52
Average Total Revenue Spent in Restaurant $1,382.37
Average Recency 0.91 months
Average Frequency (2-year period) 22.72
Club Type Red: 37.7%
Sweet: 2.6%
Variety 55.1%
White: 4.6%
Most Recent Revenue Center Banquet: 0.0%
Bar: 29.4%
Patio: 3.1%
Server 43.7%
Tasting Room 23.7%
35. Gold Club Vintage Medium-Bodied Profile
• Contribute largest portion to Gold Club’s total revenue (28.1%), but
their average total spend is moderate compared to the vintage and
unripe medium-bodied segments
• Indicates there is a larger number of customers that fall into this
segment.
• Typically spend more through restaurant as compared to Wine Club.
• Extremely frequent and recent with a long-term relationship with
Cooper’s Hawk that provides evidence of their preference for the
brand.
• Variety club type is preferred by these customers as they receive two
bottle of wine per month and desire a mix between receiving red and
white wines.
• Red wines are extremely popular as well.
37. Key Survey Results and Insights
25%
18%
20%
22%
10%
5%
Reason for Joining
Quality
Variety
Reasonable Fee
Exclusive Benefits
Peers
Others
0 0.5 1 1.5 2 2.5 3 3.5
More Educational Opportunity
Wine Diversity
Special Event and
Celebrations
Rewards
Ranking* for Areas of Improvement
Wine quality and
exclusive benefits
were the top two
reasons for joining
the Wine Club.
Rewards program
received the
highest ranking for
things Cooper’s
Hawk could
improve upon
*Lower value is means higher ranking
39. Silver Vintage Medium-Bodied
Behavioral Objective
To convert 50% of the Silver Vintage Medium-
Bodied members to the Gold Club level in year 3.
Mental Objective
Cooper’s Hawk Gold Wine Club offers benefits that
are exclusively available for Gold Club members;
as a Gold Club Member, you are rewarded for the
value you bring to the company.
Why purchase just one bottle a month when you
can purchase two to share with your friends and
family?
40. Achieving the Marketing Objective
Silver Vintage Medium-Bodied Segment
Year 2
# of Customers Price
Monthly
Revenue
Yearly
Revenue
738 $16.99 $12,538.62 $150,463.44
Year 3
# of Customers Price
Monthly
Revenue
Yearly
Revenue
369 $16.99 $6,269.31 $75,231.72
369 $33.98 $12,538.62 $150,463.44
INCREASE OVER YEAR 2 $75,231.72
41. Silver Vintage Medium-Bodied
Marketing Communications: Tactic 1
• Email campaign delivered to Silver Vintage Medium-
Bodied customers that communicates the new
incentive package when upgrading from the Silver
Level to Gold Level wine club.
• If customers upgrade to the higher club level, they are
rewarded with a personalized bottle of an exclusive,
handcrafted wine with the member’s name and
anniversary date included on packaging.
• Survey results indicate that customers desire to be
rewarded more and to receive exclusive benefits
that make club members feel special and
appreciated.
• This special gift is a symbolic trophy of the relationship
between Cooper’s Hawk and the club member.
• This special incentive taps into a customer’s self-
motivation and esteem for being a highly-valued
club member.
42. Silver Vintage Medium-Bodied
Marketing Communications: Tactic 2
• Email campaign delivered to Silver Vintage
Medium-Bodied customers each week that
promotes the increased incentives for Gold level
members.
• Gold Level members will receive 1.5 points for
every $1 spent, as opposed to the previous 1-
for-1 reward system.
• Survey results revealed that customers want to
be rewarded and feel like they are valued.
• This strategy incentivizes customers to
upgrade to the Gold Level membership and
by increasing the pace of redemption for
rewards.
43. Gold Vintage Medium-Bodied
Behavioral Objective
To increase frequency of restaurant visits by 4 from
11.36 per year to 15.36 per year for 50% of Gold
Vintage Medium-Bodied customers in year 3.
and
To increase average transaction amount by
$20.11 from $57.45 to $71.81 (an increase of 35%)
for 50% of Gold Vintage medium-Bodied customers
in year 3.
Mental Objectives
Every meal at a Cooper’s Hawk Winery and
Restaurant location is the ideal accompaniment to
one of their exclusive, unique, and perfectly-
paired wines to enjoy with your family and friends.
44. Gold Vintage Medium-Bodied
Achieving the Marketing Objective
Transaction Amount
Year 2
Number of Customers 350
Average Transaction Amount - Restaurant $57.45
Frequency 11.36
Yearly Revenue $228,421.20
Year 3
Number of Customers 175
Average Transaction Amount - Restaurant $57.45
Frequency 11.36
Yearly Revenue From Lower Average Spend $114,210.60
Number of Customers 175
New Average Transaction Amount – Restaurant $77.56
Frequency 11.36
Yearly Revenue From Higher Average Spend $154,189.28
Total Yearly Revenue $268,399.88
New Overall Average Transaction Amount - Restaurant $67.50
REVENUE INCREASE OVER YEAR 2 $39,978.68
45. Gold Vintage Medium-Bodied
Achieving the Marketing Objective (Continued)
Frequency
Year 3
Number of Customers 175
New Average Transaction Amount - Restaurant $67.50
Increase in Average Frequency 4
REVENUE INCREASE OVER YEAR 2 $47,250.00
46. Gold Vintage Medium-Bodied
Marketing Communications: Tactic 1
• Gold Vintage Medium-Bodied customers are
given a a special stamp card at their next wine
pick-up.
• The stamp card correlates to the year-long
promotion where customers collect stamps for
each transaction made in a Cooper’s Hawk
restaurant serving-area, bar, patio or tasting
room.
• If a club member collects 15 stamps in one year,
he/she is invited to an exclusive, year-end
tasting of new dishes being tested for future
menu changes.
• Survey results indicate that customers desire to
be rewarded more and invited to more
exclusive events that make club members feel
special and appreciated.
47. Gold Vintage Medium-Bodied
Marketing Communications: Tactic 2
• In-restaurant promotion encouraging Gold
Vintage Medium-Bodied customers to bring a
group of five or more people.
• Promotion includes receiving 20% off a bottle of
wine for the table if the member’s party is five or
more.
• This encourages positive word-of-mouth
marketing as customers and club levels share
this information across networks and encourage
people to come with them to Cooper’s Hawk.
• Survey results revealed that customers want to
be rewarded in more ways.
48. Achieving the Marketing
Objective
Year 2 vs. Year 3
Year 2 Total Revenue $3,199,162
Percentage Increase in Revenue Needed for Year 3
(From Marketing Objective)
5%
Amount Increase in Revenue Needed for Year 3
(From Marketing Objective)
$159,958
Year 3 Revenue Increase From Silver Club Members
Converting to Gold Club
$75,231.72
Year 3 Revenue Increase From Gold Increased
Restaurant Transaction Amount
$39,978.68
Year 3 Revenue Increase From Gold Increased
Frequency
$47,250.00
YEAR 3 TOTAL REVENUE INCREASE OVER YEAR 2 $162,460.40
50. Summary
Background
• Total revenue from Wine Club members is decreasing from
year 1 to year 2.
Customer Profitability
• 52% of customers contribute 80% of the total revenue.
Revenue is more widely dispersed among our customers than
Pareto’s 80/20 Rule typically suggests.
Segmentation
• Fixed basis segmentation was used to segment 4,265
complete customer data files on the variables of total
revenue and length of relationship split between Silver Club
and Gold Club members.
Targeting
• Vintage Medium Bodied segments were selected as targets
for both Silver and Gold members. These targets are
moderate-value, longer-term customers.
Marketing Communications
• Communication messages focused on maximizing
membership level, increasing frequency, increasing average
transaction size and making the relationship more rewarding