Cork’d sounds like the best form of social media; it
provided a platform to rate, share and discuss wine. The aim of Cork’d was to
make wine less intimidating and educate users. At the time of the case, the
company was led by CEO and recent HBS grad Lindsay Ronga and was originally
acquired by Gary Vaynerchuk, who was widely known in the industry. The platform
achieved the goal of education through user interactions, but also by involving
wineries (i.e. bridging the gap between producer and consumer). There were
other companies providing a similar service, such as VinCellar and Cellar
Tracker, but their target users were the high-end wine consumer. In contrast,
Cork’d was for a wide range of users/ anyone interested in learning
more about wine. Although some were critical of Cork’d for not establishing a
targeted demographic (as mentioned in Exhibit 2, the article from Goodgrape), I
believe this was a good business decision; by not forming a niche demographic,
Cork’d could service a larger number of users and have a true social media
feel.
The company primarily made money via an annual fee charged
to winery accounts. Wineries would pay $999 annually to have premium content on
the platform – these wineries were then featured in promotions, tasting and
online media content. Those wineries that did not participate could have a
profile, but with extremely limited features. The issue Ronga faced at the time of the
case was how to increase the revenue of the company; only a few wineries were
paying the annual fee, and these were customers attracted via relationships
with Vaynerchuk. Ronga wanted to stay away from display ads and was not
currently charging users for access.
While the company was challenged financially, many users
really appreciated the content and access to the wine that Cork’d provided.
Exhibit 4 highlights one blogger’s experience attending a Cork’d tasting event:
“What’s special about being involved in such an intimate tasting environment
(besides sitting next to the CEO and comparing tasting notes), is the ability
to speak up. To really open up and converse about what it is you’re smelling,
tasting, experiencing. And you know what? It feels pretty amazing. To not be
intimidated. To not second guess yourself. To say whatever it is that comes to
mind.”
I thought this was such a great account of the value add of
the platform and I came up with a few ideas around how Cork'd could
potentially increase revenues. Some options to consider…
1.
Utilizing a freemium model with wineries. At the
time of the case, only wineries paying the annual fee had any access to
content. If non-paying customers were offered some features they could see the
benefits of increased access to consumers, and might be more inclined to
buy a full membership. They could also offer levels: free, member, premium
member.
2.
The company could utilize display ads. As we have seen with Facebook and Instragram, ads are not always an
annoyance, they are targeted and can even be educational. And of course, they
generate good revenue.
3.
The case mentions wineries had no way of
quantifying the value add of a Cork’d membership. Cork’d should try to develop
some metrics to entice wineries to join. Can they track via clicks to the
winery's website? Or connect with online retailers to see if there is a way to
track purchase?
4. Have more tasting events in major cities and charge for them! This sounds like a great way to earn revenues and spread the word on the platform.
I really love this idea and was sad to see that
Cork’d was shut down (I believe a few years ago). In our presentations last week, Cork Dork
provided a similar platform, and I still do believe there is a need for this
type of platform.
