Tom Walenkamp from Good Pair Days: Smart Subscriptions for Wine Lovers | #423

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Tom shares how he’s opening up the gates to the wine cellar

Tom is the Co-founder and CEO of Good Pair Days, a monthly wine service that offers personalised wine recommendations and a whole lot more. With a background in finance from Macquarie Group and an MBA from INSEAD, Tom has leveraged his expertise to innovate the wine retail industry.

In this episode of Add To Cart, we are joined by Tom Walenkamp, Co-founder and CEO at Good Pair Days

Good Pair Days is a company that have built a custom, personalisation engine to deliver expert wine curation specific to each customer’s taste – in their words, it’s like you’ve got a best mate who’s an award winning sommelier.  A decade after launch, they now have over 65,000 subscribers and were dubbed the ‘Netflix of wine’ by Vogue.  In this chat, Tom shares how they have taken their personalisation recommendation engine to the next level, why their focus prioritises customer satisfaction and value creation and we hear all about their exciting plans to launch a physical space for wine – not a bar and not a bottle shop, but something quite unique. Tom also gives us an inside tip for ordering wine in a restaurant…cheers to that.

“Our personalisation engine facilitates safe discovery”

Tom Walenkamp

Safe discovery with machine learning

“The very first algorithm we built was very much a simple algorithm like regression. If you like this, what’s the percentage chance you’re going to like that? And it’s spitting out a formula for the type of wines you like. And then over time that got smarter until eventually, I think it was in 2019, we killed the algorithm, the formula we had built altogether and started from scratch with machine learning. 

So that’s where we basically just fed all your quiz answers, plus all your ratings of all your wines, plus all the tags and details we had on every bottle that our wine team would do. And we fed that all into a big machine learning engine to help us make these more advanced recommendations. And that was a big step and it’s probably a step backwards for a few months until we got enough data flowing through that, enough ratings going to the system, enough wines, but then it started to really get better and better. 

And so I think we’ve got something like 90% rating accuracy now. And the way we judge that is if we recommend a wine bottle to someone and whether they say they like it or don’t like it, we then judge whether that’s a successful recommendation.”

The right customers

“Keeping current (customers) is our main focus. We don’t think of it as keeping, we think of it as providing enough value and making sure that our product is still great for our members. That’s always our number one focus because there’s no point in acquiring a customer if you can’t keep them. We don’t make money on the first purchase or the first few purchases, so we really need the product to be good enough for customers to stick around and that’s a risk we take.

We back ourselves to have an awesome enough product and to create enough value for our members that they will stick around. But that’s why that’s always our first focus. Obviously we need our marketing to be efficient enough for our unit economics to work. But we find that that comes secondary to making members happy.

This is probably a funny one, but we don’t like to over optimize our marketing to make it such high converting materials that we’re acquiring customers that don’t necessarily want to be a customer.   We want the right customers. We don’t want to attract people that don’t want a monthly wine subscription because ultimately that’s going to cost us. They’re not going to be happy and it’s going to cost us money.”

Let them go

“We made a call that we were only going to do the right thing. That sounds funny, right? But like some of these things are grey area things that brands do, even some of your conversion rate optimization stuff. We made a call that no, we’re going to only do things that we can be really proud of. And that’s like when you cancel a subscription, we make it really easy. We don’t do too many boxes that you have to tick. We don’t try and trick people or anything like that. We let you pause for a certain amount of time. But what we do do to try and reduce churn is just make an awesome product. So we try and get all those things upfront, in terms of offering as much value as we can in all the ways that we do for all members. 

And we do survey customers on why they cancel and often budget or lifestyle circumstances are the number one and two reasons and that covers a lot. But often you don’t want to overly convince someone that needs to save some money that much that they should be buying wine instead. It just doesn’t feel right. 

So what we do instead is say, hey, we get it, these things happen and you know, there’s a number of reasons, but we’re here for whenever you’re ready to come back.” 

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