Scaling Brand Loyalty Through Social Impact: Lessons From Barefoot Wine With Michael Houlihan

Michael Houlihan was the Co‑founder, President, and CEO of Barefoot Wine, an iconic brand that he and his partner Bonnie Harvey launched in a laundry room in 1986 with no money and no knowledge of the wine industry, and built one of the top wine brands in the US and in 28 countries. It was eventually acquired by E. & J. Gallo. A renowned writer, speaker, and consultant, Michael co-authored the New York Times best-selling book The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. He currently divides his time between mentoring entrepreneurs and working on media projects, including Business Audio Theatre.

Here’s a glimpse of what you’ll learn:

• [2:43] Michael Houlihan recounts the origins of Barefoot Wine and turning debt into opportunity
• [5:40] Discovering “worthy-cause marketing” through a Chinatown fundraiser and its surprising impact on sales
• [10:22] How to identify nonprofits whose members align with your products or services
• [12:54] The difference between traditional-cause marketing and Michael’s “worthy-cause marketing” approach
• [15:03] Scaling the strategy from startup to enterprise and building lasting brand loyalty
• [19:03] Lessons learned and what Michael would do differently if he started Barefoot Wine now

In this episode…

Many businesses face the challenge of building awareness without massive advertising budgets. How do you create genuine customer loyalty when traditional advertising channels are out of reach? Learn how one entrepreneur transformed an unknown product into one of America’s most beloved brands using unconventional marketing strategies.

Michael Houlihan, marketing innovator, built brand awareness by leveraging what he calls "worthy-cause marketing." Instead of relying on big ad budgets, he donated wine to community fundraisers, giving people a social reason to choose his product over competitors and building loyalty in the process. This targeted approach created advocates, not just customers, as people felt emotionally connected to the brand’s support of causes they cared about. Michael explains how this method isn’t just a badge of charity for public image, but a strategic way to leverage existing networks and communication channels within communities. He also details how to apply the same principles to ecommerce businesses by aligning with organizations whose members are likely customers, which creates a scalable and loyal fanbase.

In this episode of Minds of Ecommerce, Raphael Paulin-Daigle interviews Michael Houlihan, Co-founder of Barefoot Wine and Business Audio Theater, about how unorthodox marketing can scale a brand. Michael discusses the origins of “worthy-cause marketing,” how to scale the approach from startup to enterprise, and why businesses should focus on building advocates rather than customers. He also discusses how to choose nonprofits strategically and lessons learned from scaling and selling his company.

Resources mentioned in this episode:

• Raphael Paulin-Daigle: LinkedIn | X
• SplitBase
• Michael Houlihan: LinkedIn | Website
• Bonnie Harvey on LinkedIn
• Barefoot Wine
• The Barefoot Spirit: How Hardship, Hustle, and Heart Built America's #1 Wine Brand by Bonnie Harvey and Michael Houlihan
• “Newton’s Proven Playbook for Influencer Marketing Success With Aaron Zagha” on Minds of Ecommerce

Quotable Moments:

• "We were basically turning nonprofit members into advocates for our products."
• "Do you want customers or do you want advocates? Most people who've been in business for a while say they want advocates."
• "It's not just getting the mercantile thing that they mail to you; it's the feeling inside that this brand stands for something bigger."
• "All businesses are service businesses; they think they're selling a product, but they're all selling a service."
• "You only have one competition and that’s you last year. If you get better, you don’t have to worry about the other guys."

Action Steps:

1. Leverage “worthy-cause marketing”: Partnering with nonprofits creates social reasons for customers to buy and builds strong brand loyalty.
2. Choose causes you genuinely care about: Authentic connections with causes strengthen credibility and deepen customer trust.
3. Provide value to nonprofit partners: Supporting their goals with products or services turns their members into natural brand advocates.
4. Scale your strategy as you grow: Expanding from local groups to broader movements keeps your marketing relevant at every stage of growth.
5. Focus on building advocates, not just customers: Advocates drive powerful word-of-mouth marketing that outperforms traditional advertising.

Sponsor for this episode…

This episode is brought to you by SplitBase.

At SplitBase, we design, test, and manage high-converting landing pages and on-site experiences for fashion, luxury, and lifestyle ecommerce brands. Our optimization program pinpoints exactly where your store is losing money most, and then we help you fix that.

The result? Increased conversions and profits for our clients.

With our team of conversion optimization specialists, performance marketers, and conversion-focused designers, we've got your back when it comes to testing and optimization.

Request a proposal on SplitBase.com today, and learn how we can help you get the most out of your marketing spend.

You can find us on LinkedIn, Twitter, and Facebook. Don’t miss out on our exclusive podcasts at Minds of Ecommerce.

Episode Transcript

Intro:  00:06  

Welcome to the Minds of Ecommerce podcast, where you'll learn one key strategy that made leading ecommerce companies grow exponentially. We cut the bullshit and keep the meat in a 15-minute episode. Founders and executives take us through a deep dive into a strategy, so you get to learn and grow your online sales. In the last episode, I had a chat with Aaron Zagha, CMO at Newton, a direct-to-consumer baby sleep brand, and we talked about how to scale and measure influencer marketing. Today on episode number 66, get Ready.

Michael Houlihan, a New York Times best-selling author and the founder of one of America's best-known wine brands, is on the podcast today. And that brand is, well, Barefoot Wines. Now we'll be discussing unorthodox marketing strategies that can easily be applied to ecommerce businesses. Now, those are strategies that helped make Barefoot Wine one of the leading wine brands in America. I'm your host, Raphael Paulin-Daigle, and I'm the founder of SplitBase.

This is Minds of Ecommerce. Now this episode is brought to you by SplitBase. At SplitBase. We help leading eight and nine-figure brands such as Dr. Squatch, Hyperice, and Amika grow through customer-focused conversion optimization programs. We find out where your website's leaking most money, and then, well, we help you fix it. The result?

You get increased conversions, higher AOV, and of course, more money to allow you to scale advertising profitably. Now, we've been at it for a decade and can help you manage the entire conversion optimization process from A to Z, from design to landing pages to development, and of course, strategy. So go to Splitbase.com today to learn how we can help you get the most out of your marketing spend. All right, Michael, welcome to the show. Thank you so much for being here.

Raphael Paulin-Daigle:  02:03  

It's great to be here, Raphael.

Michael Houlihan:  02:05  

Now, as you know, this podcast is all about going deep. And I'm sure we could have a conversation that spans hours with your knowledge and with your experience. But, you know, today you mentioned that you've got some very specific strategies that you'd like to share about how you've grown Barefoot Wine that can easily be applied to ecommerce. So I'd love to dive deep into that. But before, maybe just for maybe some of our international listeners or people that aren't familiar with Barefoot.

And I'm sure that's very few people, but can you give us a bit of a highlight reel as to what is Barefoot Wines today?

Michael Houlihan: 02:43  

Right. Well, here's 20 years of history in five minutes. So Bonnie and I got together, and after I'd been with her for about a year, she asked me to collect an overdue bill for one of her clients, and she was an office manager at the time, and she was managing an office for a grower up in Sonoma County who was growing grapes and selling them to wineries. Well, the wineries didn't pay, and he was owed about $300,000. So she asked me to go collect it.

And in the process of collecting it, I realized that the only way I was going to get anything out of these wineries, especially the bankrupt one, was by trading goods and services for money instead of getting paid money. I got paid for wine and I got paid for bottling services. Well that's great if you know what to do with it, you know. So I went back and told Bonnie. She says, well, that's great, but it isn't going to pay our bills, you know.

I said, oh, well, you know, we'll come up with a marketing plan and find some buyers. How hard could that be? You know, how long could that take? Well, it took 20 years, but we didn't know it at the time. So, in other words, barefoot would have been here, if we had known what we were getting into.

So with that said, I just I just want your listeners to realize that, and this is a good segue when we get started, of course, you know, we went to the largest buyers and they said, what are you going to advertise this? We're not going to put it in because nobody knows barefoot. It's not going to sell. Nobody knows this brand. How are you going to get the word out there?

And we said, well, you know, we don't have any money for advertising. What we have is really, you know, a debt which we converted into assets that we're going to try to market to pay off the debt. And you make a few dollars and go down the road. And he says, well, he says these chain stores aren't going to take it. The box stores aren't going to take it.

Nobody's going to touch it because it's not known. I said, well, what am I going to do then? And they said, well, you're going to have to sell it to every mom and papa and every corner grocery store and every independent, because the chains won't touch you. And so going out and, you know, doing that. I was asked the same question.

Are you guys going to advertise this? I've never seen this brand before. So it was the same problem, you know, that we all have, which is how do you get the word out about the goods and services that you're providing for your potential clients? And one day I get a call from this guy from Chinatown in San Francisco. He's a neighborhood association.

And he says, oh, you're a rich winery guy. I just need $50,000 to complete my fund for a kids after school park. You know, we're going to buy some swings and some slides and, you know, a jungle gym. And I thought to myself, boy, I said, are you sure you have the right number, pal? Because I don't have a dime.

I said, I don't even have $5,000. I said, but I'll tell you what, I do have a lot of wine, and it's unsold and we're trying to sell it, so I'll give it to you. Some of it for your fundraiser, you know, and maybe it'll loosen some people up and they'll write a bigger check. Or maybe you can auction it off and buy some slides and swings if you want. And he didn't.

He wasn't really excited about that. But. And we didn't hear from him again. But when we got the reports for sales in the San Francisco city limits, we noticed that barefoot was taking off in the Chinatown neighborhood, and we couldn't believe it. So we went to the stores that were all mom and pop, little independents, and I personally sold.

And yep, it was flying off the shelves so we couldn't figure out what had happened until we realized, oh, you know, remember that guy from Chinatown? I wonder if the people who went to his fundraiser saw us and figured that we were supporting their group, and maybe it gave them a social reason to buy our product, which is obviously more important than a mercantile reason like price and quality. That would be mercantile, but, you know, an emotional and social reason might be, hey, these guys support us. I want to support them. So that's what we call worthy cause marketing.

You know, we didn't have a Stanford grad on board to call it cause marketing or anything like that, but so this was the first time in commerce that we actually used nonprofit organizations and their organization and their communications network to get the word out about our product. And we did it in several ways. First of all, we donated goods which they could use for auctions and whatnot. Now, if you're into services, you can donate services. And the second thing we did was we made sure that our name was up big and bold only at fundraisers, only where they were trying to raise money, because we knew that the people who came to the fundraiser were qualified buyers for our products.

We also required that we were allowed to put a form down in front of everybody's plate at the $100 plate dinner that said, hey, we're barefoot, and here's why we support your group and we love what you're doing. And here are the stores that are right close to where you are right now that you can go buy this. And so that's how we did it from city to city, community to community and across the United States. And when we had the money for commercial advertising, we continued to use this social means of advertising because, quite frankly, it was more effective because if you're going to put up a road sign or do a radio ad, you know, that's blasting out, you know, you're using a shotgun, you're hoping to hit a duck. But this is more of an aimed rifle shot.

You're working with a company or with an organization that already exists. It's already grouped and. And get this. Their members are in the neighborhood where the store that sells your product or where the service that you're offering is. So this turns out to be more of a way of looking at marketing in a very concentrated, deliberate way where you say, all right, if we're going to sell in this neighborhood, what's important to the neighborhood?

What organization does this neighborhood already belong to? What are they trying to do here? How can we help them? And we did other things, like we would take their goals and put them on our bottles in the store, and it would say such and such an organization is trying to clean up the creek. They're going to have a fundraiser, you know, be there or be a square type thing.

And what that did is it gave the members of the organization that social reason. So we were turning basically nonprofit members into advocates for our products. So that's it in a nutshell. I know we only have 15 minutes, but.

Raphael Paulin-Daigle:  10:02  

Well, I'm curious, Michael. Like what? I think this is such an interesting strategy, but how do you go about choosing those organizations? And I'm thinking, right, like a lot of people listening might be online businesses where a lot of them do have a retail presence, some don't. Right.

So I'm wondering, how would they go about doing this?

Michael Houlihan:  10:22  

Well, I think the first thing you have to do is say, where is the nonprofit that has the most members that are qualified for my goods and services, whether I sell them online or in retail? What are those organizations? So that would be one list. Another list might be, you know, what are the organizations that I can identify with that mean something to me in my life? You know, whether it's cleaning up the creeks or saving the parks or whatever.

Some. Or educating the kids or keeping them off the street after school. Whatever is important to you because you want your passion to be part of that advertising effort. Then the other thing is you can begin by identifying the groups. Go and talk to them.

Maybe two or three will be disqualified and you can talk to them online. Just have a Zoom with them and say, hey, I want to talk to you about promoting your organization's goals. Who do I talk to? And so that's the way to get started. I know that we met a guy who was selling fishing tackle and basically fishing lures is what he was selling, right?

And so what he did is he put himself together with the largest group in the country that was trying to save the rivers and make the rivers wild. So basically take down the dams and stuff. Well, that's what fishermen want. See, there was that way of looking at it. So you can make these stacks up, you know, like who's qualified, who do I passionately identify with and what groups have or can use the products I'm selling.

See. And then you help them promote what they're doing. So that's where you get started. It's with these different stacks of folks.

Raphael Paulin-Daigle:  12:19  

Amazing. One thing that I'm thinking of as you're talking about this, that I find interesting is a lot of brands, you know, even ecommerce brands are associating themselves with charities. But very often, instead of using the charity as a way to get additional reach, they're only showing it as a badge to help, you know, convince people that you know, it's worthy of buying. Your approach goes beyond just showing, hey, we care about charities you should buy from us because our competitors probably don't care about the charities. Your approach takes the charities as a way to get reach.

Michael Houlihan: 12:54  

Hey man. And let me just say this. This is the difference between what they call today. Cause marketing and what we called worthy cause marketing. Now in cause marketing, yes, you're going after a badge.

You're basically bragging to the general public that I support the American Cancer Society. And that's why you should buy my product. The other one is much quieter than that, and much more humble and much more subtle and much more stealthy, because what it's doing is saying, here's an organization that's already communicating with itself, and they're tight and they have goals. And so if you identify with the goals and you realize that there's ways that you can promote them, you know, like you can write something on their site, you can write a post on their LinkedIn page, you know, and drive them back to your page. There's a lot of different things you can do to make the link.

So it's link and leverage. Link and leverage. Right. So that's the difference between cost marketing and worthy cost marketing. Remember, what you're trying to do is you're trying to get the members of the nonprofit to have a social reason to buy your products.

And by going after the members, yes, it's less people than the whole world. Yes, it's less people than the big broad funnel top. But you know, you're already down the funnel in quite a ways, so you're not working as hard because you've already got these core people that are actually helping you promote your product. So like, do you want customers or do you want advocates? Most people who've been in business for a while say they want to advocate because they know that they have turnover and they constantly need new, new customers.

Raphael Paulin-Daigle:  14:37  

Fantastic. Now how does this scale? Is this something that you only do when you're starting out? But I'm thinking, like in the case of barefoot wines, right. Like this is a brand that's scaled immensely over the past 20 years.

So is that an approach? I'm sure. Of course, you don't need this approach anymore today, but how does it scale and how did it scale, in your case, with the brand as it grew?

Michael Houlihan:  15:03  

First of all, I sold the brand to E & J Gallo., and they hired me to basically show them how we did it because they wanted to know how we had gotten away doing this. You know what? What was the key here? And so we work for them as consultants and help them do this. And they did it for the next 10 or 15 years.

And that really blew it up. So I would say that it's excellent , it's not the be all and end all. This is it. Got it. Run with it.

No, this is more like one of the many ways that you can scale your business. And it certainly is an important way to build loyalty. If you want brand loyalty. This is where that aspect of your marketing program comes from. This is probably the most efficient way to build brand loyalty aside from a great product, aside from great customer service.

Raphael Paulin-Daigle:  16:02  

See, how would you recommend approaching this as a brand scale? Is it you target more organizations? Is it you know, you just scale with the organizations that you picked. How does that type of program evolve when the brand gets bigger?

Michael Houlihan:  16:17  

When the brand gets bigger, you start to realize what it is that you're selling the most. If you also start to realize from analysis on your site where those first buyers are coming from. And so that gives you a big clue as to where you should put your energy in searching for nonprofits that have something to do that identify with those groups. So as you become larger, you know, it's like driving an old-fashioned stick shift car. Obviously, in first gear, you're burning up a lot of energy and you're not moving very fast.

But by the time you get to fourth gear, you're cruising well, it's a different strategy in every gear. And that's the thing you've got to remember. So when you're an enterprise, there's startup, then there's build up okay, startup. You don't have a cash flow buildup. You have a cash flow okay.

Then there's build out. That's when you start to expand and then there's enterprise okay. So enterprise is what you're talking about here. And the advantage to enterprise is it gives a big company a softer face with the general public. It really helps their image.

And you know, people talk about, you know, what is the brand promise. They say, you know, what does this brand stand for? You know, if I'm going to spend my money, I want to make sure it's going somewhere where I'm going to make a difference. See, so it's not just getting the mercantile thing that they mail to you. That's not it.

It's the feeling inside. It's the emotional feeling that this person that you're doing business with has stands for something bigger than the goods and services they're selling, and you identify with that. So as you become bigger, yes, you can go for more broader nonprofits and movements. You know, you can go for like a whole movement. Obviously, conservation is a movement, right?

There's no question about it. Clean oceans, that's a movement. Clean water. That's a movement education. That's a movement theater.

That's a movement. So those are the kinds of things that have to do with our human experience that everybody can identify with. So when you move in that direction, instead of trying to compare yourself to your competition, I mean, you only have one competition and that's you last year. That's your competition.

Raphael Paulin-Daigle: 18:46  

Love that.

Michael Houlihan: 18:46  

See? And if you get better than your competition, which was you last year, you're going to not have to worry about the other guys.

Raphael Paulin-Daigle:  18:53  

Fantastic. Michael, in the very little time that we've got left, you know, a few had to start. Barefoot wine's all over again. What would you do differently?

Michael Houlihan:  19:03  

Well, I'd take a lot more aspirin, that's for sure. What would I do differently? Well, I wouldn't have expanded into areas that I could not manage. I didn't realize how much management was required, you know, and this is why online seems so efficient. Because you're cutting out the middleman.

You're cutting out the distributor. Right? But even then, you have returns and you've got to deal with who you subcontract with for fulfillment, and are they doing the job and what do those reports look like? So I would have spent more time being sober about the implications of sales rather than just trying to make them, you know, I would.

Raphael Paulin-Daigle:  19:52  

Say because all.

Michael Houlihan:  19:54  

Businesses are service businesses; they think they're selling a product, but they're all selling a service. And the service is I stand behind what I sell you. I'll replace it if it doesn't work. You know, I'm going to educate you as to how to use it, you know? And I mean, yeah, we're all going for the five-star rating, right?

But that starts with the first introduction. You know, it's like is it easy for them to use you know, do you have good videos that describe exactly how to use your products. Or do you have the kind of endorsements that you need from people that they respect? Those are the kinds you start there and then you build from there. But that's what I would have done differently.

I was too busy trying to establish a cash flow. So I outsold our ability to monitor what was going on.

Raphael Paulin-Daigle:  20:45  

Such a great lesson. We've been talking to Michael Houlihan, co-author of the New York Times best-selling book, The Barefoot Spirit, and also, of course, founder of Barefoot Wines. Now, Michael, where can people learn more about you, connect with you?

Michael Houlihan:  21:03  

Okay, so you can go to our website, which is. barefootspirit.com and you'll find hundreds of articles there on business and hiring, and scaling, and everything that you're faced with in your business. And we'll give you the benefit of our background, our experience. So you get like 20 years of experience on that site.

And it's all in plain English. It's all just like street language. There's no fancy stuff.

Raphael Paulin-Daigle:  21:35

I love it. Michael, thank you so much. It was an honor having you on the show. Thanks so much for all those insights.

Michael Houlihan:  21:42  

Thank you.

Outro:  21:48

All right. Well, that's it for today's episode. And thank you so much for tuning in. Now, if you like what you've heard, and you don't want to miss any of the new episodes that are about to come out, make sure you subscribe to the podcast, and well, bonus points if you also leave a review in the iTunes store or wherever you're listening to this. Now, if you're working on an ecommerce store that does over $1 million in revenue and you need help with conversion optimization or landing pages, well, I've got some good news because there's a pretty good chance we can help with that.

Go to splitbase.com to learn more or even to request a proposal. If you have any guest requests, questions, or comments, tweet me @RPaulindaigle, and I'll be super happy to hear from you. And again, thanks again for listening. This is Minds of Ecommerce.

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