National Pricing Shell Game

Having just spent the last 21 years dealing with, among other things, the mess that is on premise national accounts pricing for the wine & spirits business, I feel I have a pretty good handle on what the problems are surrounding this seemingly unmanageable shell game. Someone needs to come right out and say it so it might as well be me: the Emperor has no clothes. There are several reasons for this knotty quandary and I have yet to see anyone wholly and completely articulate it- until now.

First, the people who are, primarily, responsible for managing the pricing for every state in the US (supplier national account managers) are not very comfortable with the task and do not receive the support they need inside their own companies. This is, virtually, a universal problem. To compound the insanity, the distributor national accounts sales people are in the exact same boat. The fact of the matter is the control and management of pricing is highly decentralized by geography – at the state level. Both for the supplier and the distributor, the pricing “belongs” to the people who run each state. A “dirty little secret” of the wine and spirits world is that most state level managers could give a rat’s behind what goes on outside their own state.

This sets up an incredibly unworkable dilemma whereby assembling accurate national accounts pricing is nearly impossible. I think it is fair to say that, in almost every (supplier) company operating in the US, the senior management of the organization lends very little support to this predicament. It is left up to the hapless national accounts salespeople to fend for themselves as best they can. So what are the chain restaurant and hotel operators to do? To whom can they turn for a lifeline? For the moment, at least, no one.

The second challenge is the false and highly misguided notion that national on premise pricing can be reduced to two deal levels: wine list pricing and by-the-glass pricing. There certainly does exist a model for this but that model is only valid in twenty four states. What, then, of the other half of the country? Any attempt to collect wine list and BTG pricing for those other states renders the collector doomed to utter failure. Game over before it has even begun. What always shocks me about this ridiculous stalemate is how few people are even aware of it! Unschooled national accounts managers, desperate to make a sale, never question the buyers when they ask for only these two price levels for all the states in which they operate.

So, is it any wonder that, armed with inaccurate pricing, chain restaurant buyers spend half their time chasing down national accounts managers (and their distributor accomplices) tying to write the wrongs that have been foisted upon them and in which, they themselves, have perpetuated?

If any of this resonates with you and you would like to get a preview of what is coming down the pike to stop this madness, please give me a call at 469-265-2210 or send me an email at ben@salisburycreative.com Whether you are a supplier, distributor, or chain operator, I would love to chat with you about a solution we all can live with.

When Sales Contests Are Bad For Your Business

I recently went to an RV superstore to pick up a few things for my camping trailer. A polite and friendly salesperson approached me and asked, “Can I help you find anything?” When I said, “Just looking, for now,” she proceeded to launch into a sales pitch to join their frequent shopper club. When, a few minutes later, a second “helpful” salesperson approached me, I knew instinctively a sales contest was underway in this store.

Why is it a sales contest brings out the worst in salespeople? Aren’t there enough bad salespeople in the world without adding desperation and greed into the mix? Could you be any more obvious that you’re running a sales contest?

While sales contests might be good (in the short term) for, um, sales, it is one of the worst ways to treat your customers if your execution is clumsy and self-serving. Sales contests, by themselves, are not inherently bad, but when the focus is on what you want versus what the customer wants, it’s a recipe for disaster. In the short term, you’ll have a few extra sales. But, in the long term, you will have fewer loyal customers. What we are talking about here is doing a bad job executing a good idea.

The only way sales contests are good for your business is if they are accompanied by a polished and professional sales approach. By “approach,” I mean how the salespeople interact with the customers. Here’s a cold, hard fact: the more you act like a salesperson, the less you will sell. That’s right, you heard me. The very best salespeople do not act like salespeople – using such obvious techniques as overcoming objections and attempting to close. You know the old lawyer joke about how you can tell if a lawyer is lying because his lips are moving? Well, guess what, sales guys and gals, we can all tell when you are selling because you are doing all the talking.

Executed properly, a sale should be a by-product of a much larger relationship – a relationship whereby the focus is on serving customers and meeting their needs. You can get anything you want in life if you help enough people get what they want. It’s just that simple. In the case of the RV Superstore, I very well might have joined their loyalty club if the salespeople on the floor hadn’t been so heavy-handed and obvious. I don’t fault the salespeople as much as I fault the management team who never bothered to train their salespeople properly. The cost? One less RV enthusiast will be shopping in their store. If you think sales training is expensive, just think how expensive NOT providing sales training is.