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New investors back Provino; wineries like sales support

[caption id="attachment_30027" align="alignright" width="360" caption="Provino CEO Jeff Stevenson (right) and investors Martin Jones (middle) and Mike Houlihan"][/caption]

SANTA ROSA -- Provino Premium Wines is expanding to accommodate a sales force to sell wines over the phone for a growing number of client vintners.

With financial and operational backing from a couple of wine industry veterans, Provino plans to relocate this spring to a 4,700-square-foot southwest Santa Rosa office that would accommodate a sales staff of 35.

A number of wine telemarketing companies have budded in the past few years to allow producers of higher-end wines to expand their sales opportunities. There's Napa-based IBG, which acquired fulfillment house New Vine and Oakland-based Call for Wine, as well as Chatterbox Wine Marketing in Napa, VinterActive in Windsor and Wine Leverage also in Napa.

Silicon Valley programmer turned venture capitalist Jeff Stevenson and telemarketing veteran Richard Brucker started Provino in early 2008 on the model of buying wines from vintners and having a highly trained team guide a pool of prospects into selecting a wine.

A year later, the company expanded to 2,700 square feet of offices in northeast Santa Rosa and shifted to a telesales agency model in which the company became client wineries' phone sales forces. This came as the economy radically shifted, and the consolidation of distributor and retailers together with a drop in visits to Wine Country for a year led wineries to scramble for ways to build stronger connections with consumers, such as e-mail marketing, social media and more exclusive tasting experiences.

"A telephone number is worth 10 to 15 times as much is potential sales as an e-mail address," Mr. Stevenson said.

Mr. Brucker left Provino in May 2010 to oversee business development for International Wine Accessories, part of the Santa Rosa-based Vintage Wine Estates group that also includes telemarketing pioneer Windsor Vineyards.

Joining Provino as investors and board members are Mike Houlihan, co-founder of Barefoot Cellars, and Martin Jones, a former president of Allied Domecq Wines USA, which later was acquired by Constellation Brands.

Their wine sales, marketing and operations consulting firm, Houlihan & Jones, brought systems and branding guidance that has allowed Provino to expand the productivity of the sales team by four times, allowing the company to do with 20 what would require 100 employees.

"The business just was not scalable," Mr. Jones said.

With a number of customer resource management and telephone systems upgrades each salesperson is able to make up to 400 calls a day, up from 100 a day a year ago. Provino has found that only six or seven people will answer the phone for each 100 calls placed, and only two or three of those will buy. The sales average is $213 per conversation and $48 per bottle.

Now the company has 20 people, mostly in sales, and a list of 28 represented brands, including multiple brands each for Jackson Family Wines, Constellation Wines U.S. and The Terlato Wine Group.

Alexander Valley Vineyards has been using Provino for more than a year, after the company proved it could make the sales numbers promised, according to Hank Wetzel, founder and managing family member.

"It's a very small portion of total sales, but it kept our retail sales at 15 percent of our total business," he said.

In early 2009 the rapidly decelerating economy reduced visits to the winery and responses to solicitations.

"It has been helpful in retaining customers in our mailing list and getting customers closer to the winery," Mr. Wetzel said. "We've had better success selling events at the winery, which trickles down to more visitors to the winery, and more repeat business."

Often, event business comes by a Provino representative's telling a consumer about them and the winery's following up with a mailer about the event.

Provino sells the wine at full retail price, and Alexander Valley Cellars pays more than 20 percent in commissions, plus any incentives the winery offers such as including freight fees and case discounts. Alexander Valley Cellars also devotes staff time to packing orders.

"While we're not making as much money as we would be if we were to hire people and have them at the winery, it is frankly the cost of doing business," Mr. Wetzel said. "We don't have the expertise at our staff to do that."

And now the winery has a dependable new stream of revenue that can be itemized on the income statement, he said.

Paul Schwartz of Cassidy Turley BT Commercial is representing Provino in its expansion space search.

For more information, contact 707-396-5000 or www.provinowines.com.