The No 2 Problem in the Wine Sales Game

What makes wine sales a “game” is there are winners and losers. These days, the losers outnumber the winners by a significant margin. And, like all games, there are strategies and tactics to not only increase your chances of winning but decrease your chances of losing. Pat Riley, one of the smartest coaches ever in the NBA famously said, “Figure out what causes you to lose and stop doing it.”

The No. 1 cause of losing in the wine sales game is depending too much on your distributors. But a close second is tolerance of low value activity. I call this “heat loss.” A lot of time, energy, money, and sweat poured into activity with extremely low return on investment. Lots of “heat” being generated but most of it evaporates into the atmosphere.
Examples? Treating all retailers and restaurants as if they had the same value. Selling to accounts incapable of buying serious volume (say, 5 cases per week or more per SKU). Selling one case at a time to an account that never buys that wine again. Ever. Spending lots of time and money traveling all over the place. Wasting precious marketing funds on trade activities that are more show and not much go.

Whatever you measure, you get more of. Measure accounts sold, you’ll get a lot of accounts sold. No two ways about it, this is an industry metric that needs to taken out behind the barn and put down. It’s a “hollow” metric that assumes all accounts are equal which they most certainly are not.
While there is some value in knowing how many accounts in each market are buying your product, it only tells a tiny part of the story. Winners want to know how many accounts buy every month (# of engaged accounts). Winners want to know how many cases each account buys when they buy (velocity). Winners want to know exactly which 20% of the accounts are capable of purchasing 80% of all volume in the market.

What we’re talking about here is the QUALITY of distribution. Here’s something to tattoo on your brain: activity does not equal achievement. Whenever I hear a salesperson talk about how busy they are, I immediately get concerned. What they’re saying is, “I don’t really have a disciplined, strategic approach to my territory.” Show me a salesperson who is harried, and I’ll show you someone without a plan. Whose fault is this? NOT the salesperson’s. It’s the leadership’s fault for not providing direction and accountability for results.

Here’s another thing wine companies do wrong – measure the number of sales calls made or days-on-the-street required. More sales calls rarely equal more sales. You want more sales (and who doesn’t)? Put a hard, cold stop to low value activities and re-allocate the hours, headcount, investment to higher value activities. A less-is-more approach, while hard to wrap your head around, truly is the ticket to accelerating sales performance. Working smarter not harder is not only possible, but mandatory. But, my oh my how few people in our industry know how to execute this.

So, what is the best way to measure and re-calibrate the value of sales activities? Disciplined use of a CRM system embedded with the highest quality RAD data you can buy. Very expensive. Steep and time-consuming learning curve. Lots of push-back from your sales team. But, let’s cut to the chase, here. If your sales are not what you want them to be, can you really afford to maintain the status quo? Fire the bottom 10% of your sales team that consistently under-performs and use the money to buy RAD + CRM. The wine business has become a very serious business. Which means its time to take the gloves off and get serious. As always, I’m happy to show you how.

About the Author
Ben Salisbury is the Founder and President of Salisbury Creative Group, Inc. which specializes in helping wineries and craft distilleries achieve high levels of sales effectiveness. Leveraging his knowledge and experience from three decades in the industry, Ben and his team deliver sales, marketing, and distribution expertise to a wide array of adult beverage clients. Prior to starting his own company in May of 2014, Ben spent 17 years as VP of On Premise National Accounts for both Ste Michelle Wine Estates and Constellation Brands.
Contact info:
ben@salisburycreative.com
469-265-2210

The Environment for Selling Wine Has Changed. Have You? Introducing the “Modern” Playbook

The “game” of selling wine in the US has changed a great deal in the last 5-10 years but you’d never know it because most wine companies are still operating out of the “old playbook.”

What’s changed? Two things, primarily, and then a whole bunch of smaller things. The two big shifts are a) consolidation at the distributor level and b) an explosion of new wines available in the market from all over the world.

The smaller shifts are positive things, actually, but many are overlooked or under-utilized by most wineries and these include: Direct-to-trade advertising (Facebook + Landing Pages + Email Marketing); Alternatives to “traditional” distributors (Merchant 23 and LibDib); Better RAD data (SRS data from VIP); Adoption and use of CRM.

If your winery is still running plays out of the old playbook it’s likely you weren’t happy with your sales results for 2018. What are the most popular plays in the old playbook? Educating the distributors; working with the distributors, meeting with the distributors; creating incentives for the distributors, etc. In case you haven’t figured it out yet, these plays used to be wildly affective but no longer pack the same punch – not by a long shot.

Well, it’s a brand-new year and, with the reset button pressed, you’ve got an opportunity to do things differently in 2019 (and the years ahead). Why not try running a few plays out the NEW and more modern playbook? If you’re not sure what those plays are, here are some of the real game-changers.

1) Rely less and less on your “traditional” distributors to build distribution for you. Adopt the mantra: if it’s important to us, we’ll have to do it ourselves. For more details, click here.

2) Leverage the 80/20 Rule in everything you do. For example, you should identify the highest value “targets” in each market you are in and narrow the focus of time, energy, and investment to ONLY these targets.

3) Measure the right things. Accounts sold is a hollow metric. It assumes all accounts are of equal value which they most certainly are not. Instead, measure things like points of distribution within your target accounts, sales per POD (velocity), and customer engagement (how many accounts buy your products month after month after month).

4) Hold your sales people accountable for RESULTS. Activity does not necessarily equal achievement. Nothing matters but results. No excuses. No blaming the distributor. No blaming the market conditions. You do this by acquiring your own RAD data and tracking all activity using a CRM system (preferably one that is specific to our industry). Relentlessly prohibit “low value” activities.

5) If you are a small family winery, don’t use “traditional” distributors. Instead, approach major accounts (both on and off) DIRECTLY. Use “clearing distributors” to get the goods delivered. This is called the “winery-direct” approach and was popularized by Total Wine & More. In response to the competitive threat of Total Wine & More, major retail chains like HEB, Spec’s, ABC Liquors, and many others (all over the country) are very keen to establish their own relationships directly with wineries. This strategy is all about providing MUCH greater margins to the retailer. Funds that used to go the traditional distributors are used to accomplish this. The other element that makes this work so well is providing wines that are not in broad distribution, so the consumer has no way to compare prices.

6) Take advantage of opportunities provided by Merchant 23 and LibDib to sell to the trade without using a traditional distributor. It is vital small family wineries become intimately familiar with these options.

7) Establish a very robust “direct to trade” marketing strategy using a combination of Facebook advertising, Landing Pages, and Email Marketing. It is essential that small wineries create, grow and nurture their OWN relationships with on and off premise wine buyers. You must learn how to reach them, get them to “opt in” to your email list and how to market to them.

8) Engage tens of thousands of consumers directly using social media advertising and email marketing

In the nearly five years I’ve been consulting for wineries and craft distilleries on their sales & marketing strategies, I continue to be shocked at the scores of companies who aren’t even aware a new and modern playbook exists. But the winds of change are in the air and I, for one, am going to beat the drum and sound the trumpet much more loudly in 2019. As if my life and business depended on it. Yours certainly does.

About the Author
Ben Salisbury is the Founder and President of Salisbury Creative Group, Inc. which specializes in helping wineries and craft distilleries achieve high levels of sales effectiveness. Leveraging his knowledge and experience from three decades in the industry, Ben and his team deliver sales, marketing, and distribution expertise to a wide array of adult beverage clients. Prior to starting his own company in May of 2014, Ben spent 17 years as VP of On Premise National Accounts for both Ste Michelle Wine Estates and Constellation Brands.
Contact info:
ben@salisburycreative.com
469-265-2210