WHNetwork Blog

David vs Goliath, Big Wine Goes after Small Retailer

Industry giant Ernest & Julio Gallo is suing a Seattle retail wine & specialty food retailer over pasta. The Spanish Table, which operates four retail locations, opened their Seattle store near Pike Place Market in 1995. This January, owners Sharon Baden and Steve Winston received a letter from a lawyer representing EJ Gallo, stating that unless they stopped selling the “Gallo” brand of pasta, which is imported from Italy (and not related to the wine company), they would be sued. (Apparently the pasta brand is pronounced differently - it is pronounced "guy-o.")

When I spoke with Winston, he expressed shock and dismay that the first contact he would have would come from a lawyer. Winston said that if someone from EJ Gallo had simply called to have a conversation regarding their concerns, he would have been open to it. Regardless, he states that they were still willing to stop selling the pasta, not because they felt that was right, but simply because they didn’t feel that a legal fight was worth it. Baden and Winston say that they contacted the Gallo attorney asking if "they preferred that we donate the pasta to a food bank or destroy it."

Then things got a little messy. The couple told me that it seemed that Gallo was willing to drop the threat of a law suit if the couple would disclose the name of the importer. Baden & Winston say they declined, and things went downhill. They stated that the Gallo attorney would no longer communicate with them at all, only with their attorney, in essence, forcing them to hire one. They say that they were given an April 16^th deadline to hire an attorney and cease pasta sales, however, Gallo officially filed suit ahead of their own deadline on April 14^th.

Baden "wonders why we were dragged into this at all, after all we are just retailers, we don’t produce the pasta nor have any control over the name." Gallo Pasta has been made for decades in Italy and is quite popular with their customers. Baden said that The Spanish Table customers have been very supportive and have "expressed outrage at the actions taken by EJ Gallo." The publicity surrounding the story has caused the remaining pasta to fly off the shelves.

KING 5 News in Seattle, says that The Gallo Winery released a statement to them. "The Gallo brand is known, recognized and trusted throughout the world. The brand represents our promise to the wine consumer that there are Gallo family members involved in the business who are passionate about making wine, who care about the quality and are involved in every detail to ensure that the consumer is receiving the best quality wine. Thus, we must always protect the image of our brand and the promise it represents," says Susan Hensley, Vice President of Public Relations for the E. & J. Gallo Winery.

The Modesto Bee
reported that Susan Hensley said E.&J. Gallo is merely protecting a valuable brand.

"Like many companies, we have understandings with companies around the world to not sell or market products in the United States under the 'Gallo' brand," she said in a written statement. "We have such an understanding with the Gallo pasta producer. Given this understanding, whenever we discover the product is being sold in the United States contrary to this understanding, we must take steps to correct the problem."

Hensley added that the matter likely "will be quickly resolved."

Modesto Bee reporter John Holland also wrote that this isn't the first time that the winery has sued to protect its name. Founders Ernest and Julio Gallo sought in 1986 to keep their brother Joseph from marketing cheese from Atwater under the "Joseph Gallo" name. They prevailed, and the cheese today is known as "Joseph Farms."

We'd like to know what you in the industry think, please take a moment and share your opinion.

-Margie

King 5 News video
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Just sharing with you, something related to my country history http://www.gallo.pt/azeite/historia/en
GALLO, it's about Portuguese olive oil . . . i wonder if it is related or not with the article issue that you described!

Bartolomeu Lança
http://www.linkedin.com/in/bartolomeu
tannin.co.uk/consulting/5desetembro_winenotes.pdf

Last week we talked about "standing out in a sea of sameness" and how important it is to ask your customers what they think. (Go here to read the article -scroll down to see all of your comments). I mentioned several very small details I have encountered that made me either come back to - or stay away from - local restaurants. I find it fascinating how very minor details can swing an experience from favorable to not, and vice versa. And the fact is most of us are quite fickle. Especially in lean times, people may not be willing to risk another trip to your establishment if they were not thrilled with their previous experience.

We talked about why it's important to engage your customer to get their feedback, perhaps through an online customer satisfaction survey. OK, so now you are on board; you are actively asking your customers for feedback (feedback of any kind mind you, not just confirmation that you are doing a good job). Now that you have asked, and you have your customer's feedback, what do you do with it?

I believe that you look for different types of information. The first would be anyone who has had a less than fantastic experience. Although many people would agree with this, it is also human nature to put off the unpleasant tasks for later. Don't. Immediately contact anyone who has not had a stellar experience. Why? First of all, they can provide you with details of what may be going wrong: with your service, staff, products, etc. and you can immediately correct it. Second, but just as important, you have a magnificent opportunity to save a customer; perhaps even win a customer for life!

When you contact your customer (and the sooner the better), here are some easy steps to follow:

1. Listen completely/Let them vent.

Give them your complete attention. Don't interrupt, don't explain, don't defend or justify what happened. It doesn't matter why the problem occurred and they don't need your side of the story.

2. Apologize (sincerely).

Many managers don't like to apologize, especially if they feel they (or their staff) were not at fault. If it was your or your staff's fault, acknowledge it! If not, apologize anyway; you don't have to take blame for causing the problem, you are simply apologizing for the customer having a bad experience. And remember: you never know what else has happened in a person's day, be empathetic.

3. Make it right.

There are two trains of thought on this one. The first is to ask the customer what it will take to make it right. Personally, I disagree with that approach. For myself, it makes me feel put on the spot, and I dislike "asking for something." I think the manager should volunteer what they think is right, and should make it above and beyond simply fixing what went wrong.

4. Thank the customer for taking the time to talk to you and sharing their experience (and for their patronage)!

And invite them back...

Now that you have dealt with the issues, it is time for rewards. What did the customer(s) rave about? This is a great time to reinforce and reward staff behavior. Did a server receive compliments? Pass them on - in front of all the staff! Did the customer adore a particular dish? Compliment the back of house - in front of all the staff! (You may even wish to implement an informal formalized reward system).

Next - what about the ideas, thoughts and opinions you have received? You know: "The music was too loud," "The lights were too low," "I hate Sushi," "The service took too long," and on and on. Do you immediately react and change things? Do you lower the music? Turn up the lights? Change the menu?

Not so fast...

It is imperative to know what your concept is - and is not. Do you have a written concept statement? If not, you may want to consider writing one. A concept statement defines your concept: The look, atmosphere, food, service style, target audience, etc. And it can help keep you on track.

Let me tell you a story that was told to me by a friend, who had been in multi-unit management for the concept in this story. They began, as every concept does, with one unit. They were hip, they were cutting edge. The music was loud, the servers edgy, the food casual, yet popular with the young crowd that frequented the place. It was hit. So they did what many people do with a hit - they grew the company.

Some interesting things happened along the way. The young hipsters that started the company got a bit older... married... maybe had a kid or two. Then one of them noticed. Hey this music is too loud for a baby's ears! And there aren't any high chairs! And what is little Suzie supposed to eat? We need a child's menu! And on and on it went. A new HR Manual came out: no body piercing, no visible tattoos, you must look "professional" after all, this is a family joint! (Or wait a minute? Is it?)

Sales went down, down, down. Why? They weren't true to their concept. Sure, they gained some new customers along the way. But at the same time, they alienated their core audience. They lost focus of who they were. And their customers didn't seem to know anymore either.

Prior to making any decision regarding your concept, you need to first ask yourself one question: "Will this support what our concept is?" If you are a sushi restaurant, and you get feedback from someone who doesn't like sushi, you could add other choices to your menu. Or you could just accept that people who don't like sushi aren't your target market. If you are the Hard Rock Café, you don’t play Barry Manilow. Or ban body piercing, unnatural hair color and tattoos. The more you do to appeal to those who aren't your target market, the more diluted your concept becomes.

What are your experiences? What decisions have you made that were right? Which ones would you make differently if you could do it all again? Email me!

-Margie

If you are not currently actively seeking your customers' feedback or need help with a customized guest satisfaction survey - call me at 707-933-0687 or email me.

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Well said Margie. Too often, to solve a problem in business we want to "drive" the customer in a certain direction and we forget about treating them as a fellow human being, listening carefully, empathizing and then remedying and addressing the cause of the negative feedback. Some new tools are now available in the market for restaurateurs to use to make it easy for the customer to give their feedback. There are the traditional comment cards and 800 phone numbers and of course web surveys to elicit this all important feedback. The ubiquitous use of mobile phones now provides a real-time channel to obtain this feedback in a discreet manner, while the customer is still in the restaurant. Too often, the customer does not want to deal with a direct confrontation to complain about an issue, so they bottle it up, get out and just don't ever come back. If they use any modern tools on the web and in the blogosphere, they will vent negatively to everyone they know and more! Not a good situation for the reputation of your establishment. You typically need to be able to provide the customers with more than one channel to provide this critical feedback to you. Of course this should be low cost and not an additional data collection and assimilation burden on the business. It also should make it easy for the staff and management to address issues quickly and effectively. Research also shows that if you can achieve a quick resolution of an issue with customer, you have a great chance to change the situation of the customer being a detractor of your brand and converting them into a strong promoter. Check out a product suite called Txtandtell that uses the mobile channel to do this at http://www.txtandtell.com

Carl Mostert
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Margie,

I am going to have to take this and pass it on internally. Too good not to use and as the guy managing the feedback process at Ted's (an interesting job for the IT guy), it will help us to jump start our customer service policies refresh.
Thanks for doing my job for me.

David Curtis

I was talking with a friend of mine yesterday, who happens to be a brilliant speaker and trainer (Debbie Maier). We were talking about how companies can stand out in a sea of sameness.

Location, service, personality, product(s): all are ways to stand out and differentiate your company. However, before you try to differentiate yourself, don't you need to know how you are perceived by your customers now? After all, without first getting a clear picture of what your customers think, there is no way to know how to get to where you want to go. It's like going to Map Quest and asking for directions to New York - only having no starting location!

How do you find out exactly what your customers think about your company, your products, your service? Ask them! It's fast, it's easy. it's inexpensive, yet there number of companies that do it is still relatively small.

I can tell you why I go where I go when I go out, and why I avoid some places:

* One place has terrible lighting and uncomfortable chairs in the bar, especially on a rainy day, it's just too dreary.

* I met a girlfriend for a quick nibble and drinks at one local place and got a $100 check. It's been two years and I haven't been back.

* The entree I got at one place wasn't very hot. It was the first time I'd been there in a long time and I haven't been back. After all, maybe that's their norm...

* A friend and I sat at the bar for dinner and a glass of wine at another local place, and they poured us an extra 1/3 glass when we were though with our wine, but still had a few more bites of dinner. It was a nice gesture, and left me feeling really good about going back.

* There are a couple of local wineries that are always on the list to stop at when people are here from out of town. I can count on having a great time, tasting some great wines, and they have personality plus. There's also a few I avoid...

None of these places have ever asked me what I think - some of them don't know they lost business, and some may not know why they keep getting me back!

Where have you stopped going, and why? And does anyone know they've lost your business? Let me know! (email margie@wineandhospitalitynetwork.com)

Call me for information on how fast (and inexpensively!) you can find out just what your customers are thinking. Call 707-933-0687 or email me at margie@otlconsulting.com.

-Margie
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Margie,

Great article. There is one place that I have not been back to since my first time, Good Time at 1104 Pine St in Paso Robles. When I went there the tables and floors were dirty, the wait staff was slow and did not know anything about the menu, the food came out cold and the bill equaled that of a fine dining restaurant.

On the other hand 10th Street Cafe in San Miguel (805) 467-3141 has been one of the best restaurants I have ever been too. The food is always top notch, the staff are attentive and excited about helping out with special dietary needs and they cater to children. I frequent that restaurant on most of my special occasions and when friends and family come into town.

Mike Sanchez
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Great points for sales people in all industries to consider. When I was in sales at CIBA Vision my territories changed annually; my first step when introducing myself to new accounts was to ask them for their opinions of CIBA Vision and our products. This simple question (and how I handled the information received in the responses) was a contributing factor to my quick success when assuming new territories.

Tom Furlong
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Was at Bouchon on a Friday evening a couple years ago. Crowded, of course, which is to be expected for a Keller restaurant. We had been going to Bouchon about six times a year, so while not regulars we did frequent the place. Had a reservation for two and we were seated near the kitchen door in the back of the room…no big deal, someone’s got to sit there. After placing our order for appetizers and entrees, the apps came, fine, we finished. Dishes were cleared along with silverware. Twenty minutes later the entrees appeared. Literally ten minutes after that fresh silverware appeared. Laughable… After we finished our meal the waiter approached with our bill, but then tucked it away after seeing our dinner plates had yet to be cleared. We hadn’t even been offered coffee. Amazing. Haven’t been back in over two years. (And no, we are not high maintenance patrons.)
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I have certain special wineries that I always take people to. And what they all have in common are four things:

1. Good wine

2. Friendly wine servers

3. Knowledgeable wine servers

4. Attractive surroundings

If the people visiting are wine geeks, then the surroundings don’t matter. While attractive surroundings do make a visit more pleasant, if the wine itself is of superb quality, then tasting in an industrial warehouse works just fine. But as for the other three points, obviously if the wine isn’t good, why bother. And an unfriendly server—and there are many—can spoil the experience. Wine knowledge is important, especially for the people I take to visit. It’s not crucial if people are just out for a good time.

What I find interesting is that some wineries just don’t care. I have let wineries know if their tasting rooms have cost them visitors and purchases. And yet often no changes are ever made. I know firsthand where the hospitality director hired secret shoppers to comment on the experience, and then, when the shoppers reported “the worst experience ever” at that tasting room, the owners refused to make any changes at all. The hospitality director then quit, leaving the inmates in charge of the asylum as the tasting room people now had free reign to ignore customers completely.

Wineries which depend on direct sales will generally offer a better tasting room experience than wineries which sell mostly through the distribution channel. It all depends on whether the management sees the tasting room as a sales channel producing income or as a public relations effort that simply costs money.

Larry Chandler

Wine Editorial | Sales | SEO Marketing | Winery Support Services
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Hello Margie, You are absolutely right that a way to know what your customers think about you is simply to ask candidly the question. Among other ways to also find out what your guests like or dislike, is to look at your product mix reports. People vote with their money therefore read what they buy or don't buy. When you analyze your sales buy price point, day par, protein, or flavor profile, you can determine what you should remove from your menu, what to improve on and what to keep as is. To go back to your title, I think that a certain amount of "sameness" is desirable because we all need a taste profile reference. When I order a grilled cheese sandwich or a minestrone soup, I already know that it is supposed to taste like. We all have a taste and flavor memory bank and sometimes we don't feel like being adventurous. But you are right to imply in the title that "sameness" is not desirable. A certain amount of novelty creates appeal and interest. This said, too much uniqueness could incite decision confusion. The hard part is to determine a just balance. That's were intuition and experience come into place.

Alex Smida
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I agree that speaking with customers is a part of defining what can make a destination stand out. Customer satisfaction or lack thereof can be a gauge to measure how well you deliver on a promise of value. However, customer satisfaction alone is not a good indicator of how well you've differentiated the destination. There are many other things to consider. Our publication, The Wanderlust Report on travel marketing and destination branding, discusses this subject in depth from a different perspective n each issue. Volume I | Issue no. 4 covers Brand Positioning For Tourism Marketing, the core to achieving meaningful differentiation. You can find it here: http://www.createwanderlust.com/marketing-tourism-defining-a-brand-positioning

Mark Shipley
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I read the title of this post as how to stand out in a sea of sameness... but it's all about "whining." That's easier to do than to make recommendations on how to stand out. Most restaurants unfortunately don't stand out and don't understand the concept of WOW and differentiation. Standing out and WOWing your guests is as simple as a table by table approach to conversing with your guests, handing out a business card with a unique title, or giving your guests a "kiss" -- a Hershey Kiss, rather than those same old boring, boring lousy tasting mints that every restaurant gives out.

Joel Cohen, Publisher of WOW www.RestaurantMarketing.com www.RestaurantMarketingBlog.com
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Great Topic! Word of mouth and personal referrals still seems the best and most reliable way to promote in my business. Treat your customers right, bend over backwards for them and they'll keep coming back... and bring you lots of referrals! I also hand out raffle slips during my tastings between the whites and the reds that collects contact info and comments. I collect them at the end and conduct a fun raffle. I often get feedback about the tasting and many referrals to people who would want to host a tasting or even join my team as a wine consultant.

Michael Schwartz Independent Wine Consultant & Team Leader Grapevine, Texas http://www.thetravelingvineyard.com/michael7856
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Thanks, Margie! You just helped me a realize a quick and free way that I could ask people what they think. My blog has a sidebar heading that says, "Recent Comments." So I just modified it to say, "Recent Comments -- Please Share What You Think." So simple, but a world of difference! Most appreciatively, Sue http://blog.lovingmyself.com/
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Some great points here... 1. Small gestures of hospitality leave lasting impressions and usually don't cost much. Careful about watching margin too closely in lieu of pursuing great hospitality. 2. Hospitality involves more than just friendliness. Would you invite someone over to your home and have them sit in an uncomfortable chair? Or turn off half the lights so you can't see each other. 3. I'll bet if the place that charge you $100 had the world's best hospitality, you might remember the $100 but you would also remember the experience. Thus...more willing to make another visit. I talk to my regulars each and every shift to get the pulse of the restaurant. Talking involves more than a greet, sometimes I actually sit and drink a cup of coffee with them. I've gotten more valuable feedback from this...I keep in mind that one regular speaks for probably 10 other customers.

Scott Temme
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Margie, this is well said and appropriate for any business. I think it's a trust issue for many people. They don't trust that outsiders could know better than they do. After all, they've spent their life savings and every waking moment for the last year to build this thing that came from within them.

My wife tells me that she knows me better than I know myself, she's right.

Jeff Schacher
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I'm in total agreement here. The EASIEST and BEST way to get the measure of one's business is to ASK the patrons who use it. It's not complicated or rocket science, and it's usually inexpensive. Highly effective, too. This could quite possibly be the most important post on this site, and most people are going to miss it.

Chef Zig Thomas
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There was a restaurant that I once went to late one evening where they allowed this "couple" to do some things in a booth that weren't meant to be done in a restaurant. Haven't been back there in years. I doubt they know I've quit going there. And given what went on, I doubt they care.

Harold http://www.sellmoremeals.com
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This is something we are struggling with as a company right now. While we have the "secret shopper" program, that only tells us from a checklist point of view how our restaurants are meeting our standards. It does not tell us what our clients think about us or what they think we should do to improve. We have a feed back form on the website, but that requires guests to seek us out. So, we have been experimenting with survey technology. Creating a web survey and adding a message to the check out receipt. But that still does not get us in face to face conversations with our guests. Our next step is to investigate a different kind of loyalty program, one that emphasizes restaurant level events where we can interact with our most loyal guests and give something back. We are tossing ideas around, monthly wine tasting, new menu item tasting, fan club meeting, etc. Rather than the old points type system we want to bring our fans together and have an open dialogue and reward them with free food, drink, and the opportunity to participate in making our restaurants better.

David Curtis
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Hi Margie, I love the topic and the feedback. I agree with Michael about treating your costumers right. As Darby said some companies only allow you to use there "cookie-cutter" sites, so it is up to the individual to make the most of every opportunity. Nothing, but nothing beets one to one contact with a client. You should be in contact with a customer at least 4 times a year, and not to sell them anything. Asking them about a new product they have tried, if their delivery came in a timely manner, (in my case) what they thought of the tasting and what they would like to see in the future. At the end of every tasting I talk to everyone in the room, whether they placed an order or not, and ask if they enjoyed themselves and if there was something they would like to see different at another tasting. I am always looking for productive comments...something more than "it was great". So I ask specific questions. I think this shows your clients that their opinion is important to you and help with your business. Great topic!

Sabrina Porter spgreatwine@aol.com"