December 29, 2005

blogging doubled stormhoek sales in less than twelve months

wine134657.jpg
[The original brochure that came with the bloggers' Stormhoek bottle. To read it in full, click here.]

[UPDATE: Stormhoek is sponsoring "100 Blogging Dinners in 100 Days", May-August 2006. If you're a blogger who likes wine and throwing parties, please go read this. Thanks.]

A journalist phoned me yesterday about an article she is writing about business blogs for one of the large UK trade mags. I gave her this little nugget, which I've only just been allowed to go public with:

Blogging doubled Stormhoek sales in less than twelve months.

We're talking tens of thousands of cases, here.

To recap: Earlier this year I sent out a hundred or so complimentary bottles of Stormhoek wine to bloggers, just to see what would happen.

Three Provisos:

1. The bloggers had to live in the UK, Ireland or France. They needed to have regularly kept up a blog for at least 3 months previously. Their blog could have a readership of three or three thousand- size or status didn't matter, just so long as they were genuine bloggers.

2. They had to be of legal drinking age.

3. They were under no obligation to say anything about the wine, good or bad. If they just wanted to snarf the wine and say nothing, or say something negative, that was fine. It was their call.

As it turned out, a lot of them ended up writing about it. A meme of sorts was created, and it spread.

I have been saying this for years, and still not everybody believes me: "Blogs are a good way of making things happen indirectly."

No, bloggers and their friends didn't start suddenly descending on supermarkets, buying the wine in large numbers. That's not how it works.

What happened is that by interfacing with the blogosphere, it fundementally changed how Stormhoek looked at treating their primary customers (the supermarket chains) and the end-users (the supermarkets' customers).

i.e. It caused an internal disruption, both within the company and the actual trade. Wine drinkers' basic purchasing habits didn't change because of the meme, but the meme allowed Stormhoek to align itself more closely with said habits.

I've also been saying this for a while: How Robert Scoble's blog affects Microsoft [his employer] internally is a far bigger story than how his blogging affects external sales. This insight, which I started figuring out at the beginning of 2005, was instrumental in how we planned the Stormhoek stratgey.

The Stormhoek wine meme didn't sell more bottles, any more than Scoble's blog increased sales of Dell computers. That's not what this game is about. What matters is "The Porous Membrane". What matters is the internal disruption.

You have to remember: there are hundreds of thousands of vinyards in the world, all trying to sell to the twelve or so mass market wine buyers in the UK. So you need a story that cuts through the clutter.

And the best stories have market disruption baked-in.

With the disruption, came a new and different story that the supermarket buyers and the importers wanted to hear. Telling the story made the sales process easier. With easier sales, the curve was raised.

So my advice with business blogs is not to think of them as sales channels, but as disruption channels. Much more effective.

[NOTE TO SELF:] "Blogging as a marketing tool is easier when you think of it as a chemical catalyst, not as a hammer and nail."

[PODCAST:] Johnnie Moore and James Cherkoff interview Jason Korman, the CEO of Stormhoek. Great background on the story.

[UPDATE:] Decanter Magazine picks up the story.

Posted by hugh macleod at December 29, 2005 10:56 AM | TrackBack
Comments

Excellent stuff - well done Hugh

Posted by: Dennis Howlett at December 29, 2005 1:04 PM

Congratulations on selling 12 bottles instead of 6.

Posted by: LSF at December 29, 2005 2:30 PM

Good that you have now added 'We're talking tens of thousands of cases, here'. Now the real impact is clearer.

Posted by: LSF at December 29, 2005 4:41 PM

Thanks LSF... yeah... "Double" is pretty meaningless without some kind of context.

Posted by: hugh macleod at December 29, 2005 4:45 PM

Hugh,
I can hardly wait to see what happens when Stormhoek rolls out to the States!
Dave Wheeler

Posted by: Dave Wheeler at December 29, 2005 7:13 PM

Congratulations!!

It is very encouraging to see that good blogging reeeally works!!

Happy new year to you!

Posted by: nabila at December 29, 2005 10:22 PM

Keep Rockin Hugh!

Posted by: Avin at December 30, 2005 7:19 AM

Dave Wheeler, yeah, I'm looking forward to the States as well. For one thing, this kind of thing is far more "in sympatico" with the American entrepreneurial schtick than in Europe.

The vast majority of the kvetching I've received so far for Stormhoek has been from Europeans. I think that speaks volumes.

Posted by: hugh macleod at December 30, 2005 12:05 PM

Any idea when the rollout to the States will happen?

Posted by: Mark at December 30, 2005 1:03 PM

Mark, as far as I know, it should be in February, thanks.

Posted by: hugh macleod at December 30, 2005 1:09 PM

I recall ad agencies claiming that the Jamie Oliver campaign added billions to the share value of Sainsburys - in the classic way that agencies confuse mathematical correlation with cause and effect. How can you defend the claim that it was blogging (rather than lessons derived from blogging and additional stormhoek executives' thinking) which doubled sales. If you overclaim, you risk having any achievement undermined.

Posted by: john at December 30, 2005 5:10 PM

John, A couple of points:

1. If you can show me a part of the sales proccess that wasn't directly affected by the whole blogging thing, I'd love to see it. If you can show me one part of the company that wasn't prfoundly affected by the blogging thing, I'd love to see it.

2. If I am totally wrong here, no big deal. One more delusional blogger on a rant. But if what I'm doing bears any semblance to reality, then the impications for my client [and anybody else who cares to follow this story] are enormous. Especially if this meme takes root in the States, once we roll out the product there next year. Either way, the risks are small, the potential payoff is too huge to ignore.

But you're right. There's always risk...

Posted by: hugh macleod at December 30, 2005 7:10 PM

Interesting, it echo's my experience with the corporate blogging survey 2004 and 2005. Many of the companies that were really successful, Microsoft and Macromedia were very successful because of their blogger's focus on the ideas and thoughts of their customers. The power of the collective if you will. Some say this is a new idea, web 2.0. But I think this is the marketing concept as it should be.

Posted by: John Cass at December 30, 2005 9:00 PM

I have a roof right under the three landing patterns for Phoenix Sky Harbor airport in Arizona.

wanna rent it?
Big ass logo there
Bottom three photos..
http://theheadlemur.typepad.com/ravinglunacy/2005/07/awning_project_.html

Posted by: the head lemur at December 31, 2005 2:23 AM

Thank you for this post, Hugh. This is a great story and moves the concept forward with good empirical information.

The trick is to get the occupants of zone "B" in your membrane diagram to talk. Passing out wine did that excellently. Other companies, particularly tech gadget makers, have also stimulated conversation by distributing products to bloggers.

Another conversation stimulator is an excellent zone "A" blogger like Robert Scoble.

What are others? Lacking a zone "A" blogger, what can an organization do? Finding ways to start the conversation and keep it going is often the toughest obstacle to overcome.

Posted by: Harry Chittenden at January 2, 2006 3:35 PM

Harry, I think the toughest obstacle to conversation is the reluctance of organisations to actually do the dirty work i.e. put your ass on the line and start talking.

Lots of companies don't want to put their ass on the line, don't want to talk with anyone. They just want your money.

A self-imposed limitation.

Posted by: hugh macleod at January 2, 2006 7:47 PM

As usual, we differ only in terms of nuance and direct causality.

My argument is that to say that blogging doubled sales would imply that any company that started a blog could expect to double sales - that may be true but it probably isn't. The type of blog and the willingness of the organisation to buy into it are clearly important factors in the equation. Many other things are going on in addition to the blog (this was also true in my Jamie Oliver example).

You say "blogs are a good way of making things happen indirectly" and I know what you're getting at. But I would pedantically argue that you cannot MAKE anything happen indirectly. You can make something happen directly and that thing may in turn make something else happen. However, for that sequence to occur, there have to be other factors in place - specifically a willingness to change behaviours and processes. At stormhoek for example, all those involved in the sales process had to be open to change - if they hadn't been then the outcome would have been the same as with those feeble fake corporate blogs.

If done right, blogging can help to foster the environment in which such behaviours change, but the simple act of blogging is not sufficient. I think we'd both say it was essential but my point was that if you claim direct causality, you run the risk of undervaluing the efforts and initiatives of those not directly involved in the blog. That's all.

Posted by: john at January 3, 2006 4:57 PM

What's the downside? The cost of 100 bottles of wine plus postage? Distributors spend that in a couple of weeks as samples in front of the trade. I think it's a good way to launch into new markets and develop ground swell. My address is Cincinnati Wine Warehouse, 6611 Madison Road, Cincinnati OH 45227

jens at cincinnati wine warehouse

Posted by: jens at cincinnati wine at January 3, 2006 11:19 PM

Could you tell us more about how every part of the company was changed/disrupted by the blogging?

Since almost none of the Stormhoek blog entries have any comments, it doesn't seem like there was a big flow of info about the market coming in to change how anything was done.

Was it that thinking about writing forced people to think about who their audience is, and what that audience would care about? Which translated into asking those same questions about those people's interest/desires from the product?

I'm not being snarky, I'm just trying to get beyond "interfacing with" and "disrupted by" to some tangible examples...

Posted by: Bill Seitz at January 4, 2006 3:05 AM

Bill I think is on my wavelength about this - as far as I can see 4 people (in addition to you hugh) have made blog contributions - what percentage of the labour force and/or those involved in the sales process does that represent?

Posted by: john at January 4, 2006 4:05 PM

How is this blogging approach any different than the classic public relations efforts that have been achieving coveted mentions in 'lifestyle' publications for wine brands over the years? Other than taking the topic out of the hands of those who have an interest in holding the reins of knowledge about the, oh so complex, topic of wine. Other than beginning to position wine as a consumer product that does indeed not require vast knowledge of tradition, ceremony and soil composition to enjoy.
Good for you! I know nothing about blogging but I have made a career of selling wine and this story development approach has been very interesting to observe.

Posted by: Irene at January 6, 2006 3:29 PM

Okay, now I get it.

Posted by: Marketing Headhunter at January 12, 2006 11:28 PM