Michael Houlihan and Bonnie Harvey started Barefoot Wine in a laundry room and grew it into one of the top wine brands in the United States. I invited them to Marketing Smarts to talk about how their approach to selling wine disrupted the industry, and what other businesses can learn from their business model.

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Here are just a few highlights from my talk with Michael and Bonnie.

Whether you sell a product or a service, you're selling service (14:46): "You're not just making a sale one time. What you're doing is—no matter whether you're selling a product or a service—you're selling a service, and that service is 'I'm going to be there. I'm going to take it back if it's not right. I'm going to make it good if it's not right. You can trust me.' And when that's your real message, you have to do that in person. Social media is...a great way to look up a company or look up a person...but when you really want to make a commitment to buy a product from them for five or ten years, you really have to see them, look them in the eye. We believe in high-touch over high-tech."

For the best business insights, take your questions to the shop floor (5:36): "Because we didn't know any better, we asked people at all levels of the distribution system what would work, what was missing in the system. And so we got the equivalent of a master's degree education in wine marketing and merchandizing from people who were really on the line and saw what was happening. They weren't marketing people, they weren't high-level managers, they weren't consultants. They were forklift drivers. They were people who were wearing smocks, clerks in the grocery stores. They were grocery store buyers. And they were also on the bottling line, and we went out and talked to consumers as well. We asked a lot of questions of a lot of people who were involved in the industry, from the top to the bottom."

Support your local community, and your community will support you (9:10): "We really discovered what we call 'worthy cause marketing' as an alternative to expensive advertised marketing, and we discovered it quite by accident. We got a telephone call from a neighborhood group in Chinatown in San Francisco who asked us to write them a large check for their after-school playground project for the kids. We said 'well, we don't have that kind of money here. We can't even afford advertising.' We had a problem with our chain stores who wouldn't take the product in the beginning because...it was an unknown brand...and they were demanding that we advertise. We took a look at the cost and it was a couple hundred thousand dollars. The ad people would say if you don't advertise on a regular basis, week after week after week, you're going to get traction, and it could take a year." 

"So, we did the math and said 'we just can't afford this form of advertising.'  So here's this guy asking us for a check on the phone, so we said...'we don't have any money to give you, but we can give you wine, and you can use this at your fundraiser or you can auction it off...to raise money for your park.' He took the wine, and the next thing we noticed that our wines in the stores that were near Chinatown were just jumping off the [shelves]." 

There's a difference between "cause marketing" and "worthy cause marketing" (10:42): We said 'wow, maybe there's a relationship between this wine donation that we made—because people had a chance to taste the wine and now they have a social reason to buy the wine—maybe we should use this technique.' So we called it 'worthy cause marketing' because we were supporting a worthy cause and we were marketing to the members of the worthy cause. This is different than cause marketing where you write a check to a nonprofit, and then you address the general public as a good guy because you're supporting the nonprofit. This is more direct. Now you're going to the people who are buying your product and you're supporting their group, so the group members in that neighborhood where your product is for sale have a social reason to buy your product."

For more information, visit TheBarefootSpirit.com.

We talked about much more, so be sure to listen to the entire show featuring Michael and Bonnie, which you can do above, or download the mp3 and listen at your convenience. Of course, you can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode! 

Music credit: Noam Weinstein.

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Published on October 23, 2013