Sometimes it’s the simplest ideas that have the biggest impact. Ask Wendy Burridge, founder of Wine Business Services and recent winner in the 2008 FNB Enablis Business Launchpad Competition. Her business is based on a simple customer relationship marketing concept, but it’s unique in that it targets the wine industry, offering it something no other business has before.
Using a combination of bespoke technology, electronic database management tools and targeted marketing suss, the business offers wine producers a service that enables them to market directly to a database of customers drawn from visitors to the wine farms. Burridge has over 15 years’worth of experience in the wine industry. Having previously produced her own wine, she worked for five years as wine buyer for the Wine of the Month Club. She holds a post-graduate diploma in Wine Business Management and is currently completing a Masters Degree through UCT Graduate School of Business Management.
Seeing the gap
“The degree is done in conjunction with the University of Adelaide in South Australia,so I’ve been exposed to a lot of their wine industry thinking, which sparked the idea for the business,” Burridge explains.“While South African wine farms usually distribute their wines to restaurants and the bottle store trade, very few of them have ever marketed directly to the people who visit their farms on wine tasting trips.
When an individual visits a wine farm, they usually leave their contact details in the visitors’ book, but after they taste and maybe buy some wine, they never hear from the wine farm again.”In Australia and the United States, wine farms actively target this market, but the idea has been slower to gain traction in South Africa.
“I think it’s because our wine farmers’ core competence is making great wine,but not necessarily marketing it, so this opportunity has been overlooked,”Burridge explains. It was a missed opportunity she knew she could rectify. “We help wine farms use and manage this database, and we market the individual farms’ wine club to people on their contact list. This helps to increase their sales in a market sector they previously hadn’t tapped into, and it builds a relationship with this market over the long-term,” she explains.
Drawing on experience
Burridge’s experience as Wine of the Month Club wine buyer gave her an in-depth knowledge of what a wine club needs, which approaches work best with customers and how to manage a database to optimum effect.“It’s not that some wine farms don’t already have wine clubs, but most of them lack the technological infrastructure, staff and expertise to manage them professionally.
What we offer in services like bulk sms’ing, newsletter capacity and online mailing adds a whole new dimension,”she says. If wine farms don’t yet have a database, Wine Business Services helps them to create one.
Burridge’s experience also gave her a solid contact base within the wine industry and when the time came to test her idea, she conducted research among various top-end wine farms to gain their opinions. “I had put together a basic business plan of how I thought the concept would work, and what the benefits to them would be, and I tested the waters with it.
The response I got was very positive. In fact, of all the wine farms I approached when conducting research, only two did not sign up in the end, and this was only because they didn’t have enough stock for wine club purposes,” she explains.
She invested 15 months’ worth of research into the concept before deciding to leave her job and open her own business. “While I looked at the international market, I also spent a lot of time considering how it needed to be tweaked for the local wine industry,” she explains.
Developing the business model
These adaptations make Burridge’s business model unique. “We use a basic wine club model in which members sign up and agree to make a certain number of purchases each year. That’s standard but our approach is far more personalised.
We operate as an extension of the wine farm’s marketing function, and our concept gives people far greater choice in the wine they receive,” she says.The business’s operations are geared not only towards marketing and delivery, but also towards getting to know customers really well.“My IT knowledge is very limited, so I partnered with an IT expert, George Bottome, who developed unqiue software that meets all our needs,” says Burridge, who describes the partnership as “the smartest thing I could have done,”.
The system is a one-stop database management and marketing shop – it allows us to do everything, from making personal notes on conversations with customers, to doing direct invoicing, sending out newsletters and tracking the activities of call agents,” she adds.
Burridge currently employs three full-time call agents to conduct marketing and sales calls, an office support manager to handle the logistics operations of the business, and a temporary sales agent and data capturer. Wine Business Services, like many small start-ups, had humble beginnings, but this hasn’t hampered its growth.
“I started the business with just R20 000, which I used to buy a computer and printer, and I operated out of my mother’s garage,” Burridge explains. She resigned from her full-time job in March 2008 and had signed up her first client by May in the same year.“I didn’t take a salary for five months – all the profit I made was ploughed back into the business.” This gave the business the crucial capital it needed to develop bespoke software and invest in more sophisticated systems.
Capturing the market
Because she’s offering something unique in the South African market, Burridge has found it relatively easy to sign up clients. “Other than the research I conducted among various wine farmers, I never marketed the concept. But I’ve managed to sign up 12 clients in the first seven months,” she explains.
These clients include some of South Africa’s best-known and prestigious producers – Spier, Rustenberg, Glen Carlou, Rupert &Rothschild, Lanzerac, Graham Beck and Simonsig are just some of them. “South Africa has around 4 000 primary wine producers and over 780 cellars crushing grapes, but only 15% of these are really high-end producers.
We’ve targeted this upper-end segment of the market for a number of reasons. Firstly they are already well-known and have a good reputation, and they make a product that’s of the highest quality. This is very important because if I am to promote their wine, I need to believe in it.Secondly, their size means they are more likely to have the capital to invest in the monthly retainer we charge,” Burridge says.
Benefiting from Launchpad 2008
The FNB Enablis Business Launchpad Competition will open new doors for the business. “I’ve never entered anything like this before, and it was really exciting to be nominated first as a finalist and then to be chosen as a winner.
In addition, the process has been very valuable as we’ve been exposed to some fine entrepreneurial minds,” Burridge says.This network will continue to widen. In addition to a package of technology prizes that include a laptop computer, cell phone equipment and software, all winners have been offered a free year’s membership in the Enablis network of entrepreneurs.
This membership brings with it the benefits of business training and online resources and support. All winners also benefit from 12 month’s worth of high-level mentorship support from an experienced business achiever. As a winner, Wine Business Services will also receive a profile in The Sunday Times.
Although competition winners do not receive a cash prize,they are allocated to a funder who will work with them as a funding partner to tailor-make appropriate funding. This could take the form of a loan guarantee,a loan on special terms, or an equity investment. Businesses such as Burridge’s are typically unable to get funding from banks on ‘standard commercial terms’.
Consolidating and looking to the future
“Our biggest challenge at the moment is to consolidate, to fine tune our systems before we grow,” says Burridge, who’s well aware of the dangers of growing beyond the business’s capacity.“Our goal is to remain small enough to be able to offer our unique personalised and niched service, but to be large enough to have the infrastructure to deliver and get the job done,” she explains.
She’s also looking at opportunities in the wine distribution market through direct marketing and telesales and has already signed up one distributor. With increased call agent capacity the business will be able to market special offers and new releases to distributors’ restaurant and bottle store clients, thereby boosting the services of their representatives.
“The next exciting thing on the horizon involves marketing to wine farms’ international visitors. We’ve installed a VoIP system and will make use of the farms’ existing overseas distribution networks. The international visitor is not just a pop-in guest. These are usually people who’ve done research, and carefully selected which wine farms they want to visit.
They’re an interested, motivated, ready-to-buy market and one loses out on such a great opportunity by not tapping into this,” she concludes.
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