Making money with $ocial media

28 August, 2008 at 2:48 pm 1 comment

A local company is a case in point of the potential power of social media for businesses.  Stormhoek, a Western Cape winery, has been making waves on the web since 2005, when it turned to the blogosphere to promote its brand.  Stormhoek’s first campaign was simply to hand out 100 free bottles of wine to bloggers in the UK, France and Ireland, who were not obligated to promote the product.

Nevertheless, the campaign paid off and yielded exposure for Stormhoek. More importantly, it helped bring in the bucks:  in less than two years, the company’s UK branch was enjoying a five-fold increase in sales – a feat that it attributes to blogging.

Web 2.0 to the rescue

In February this year, Stormhoek found itself faced with a crisis when its UK partner, Orbital declared bankruptcy.  But instead of asking FNB for a loan, the company asked its customers.  (Yes, you read right.)

For a loan of R2000, a Stormhoek supporter would be allocated a vine in the company’s vineyards with his/her name and location on it.  The supporter would also receive a photograph of the vine and a bottle of wine sourced from that vineyard’s crop. 

Stormhoek would pay back the loan with interest, by allotting 5% of its production costs to a loan-repayment fund.

The Own-a-Vine-Save-a-Job campaign quickly went viral once it was posted on the company’s blog. To date, Stormhoek has received R572 000 from the campaign and is on track with loan repayments. 

I’m impressed by Graham Knox’s creative thinking, but even more amazed that it worked.  Perhaps I shouldn’t be though, because their social media strategy is simple, effective and based on trust.  Stormhoek’s success story is due to the honest and transparent relationship it maintains with its supporters through the Stormhoek blog, Facebook group, Twitter feed and Zoopy video channel

The lesson from this for other South African businesses is this: social media can help you meet your goals if it’s used consistently and creatively.

Frome one newbie to the other, here are some interesting resources that further explain how social media can benefit businesses:

Next Generation Social Marketing

Fundamental Truths about Social Media Marketing

Using Social Media in the Workplace

Entry filed under: Uncategorized. Tags: , , , , , .

The customer could be King again Big Brother 2.0

1 Comment Add your own

  • 1. statsninja  |  30 September, 2008 at 2:04 pm

    Thank you for this useful post. South African businesses are only beginning to tap into social media. I think it is a must for small businesses or sole proprieters – it beats having to waste thousands of rands on advertising when you can advertise your services freely online.

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