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.

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Posted in Sales & Selling.

2 Comments

  1. All valid points, Ben. Its like herding cats sometimes. Makes life in National Accounts difficult, but we have developed some tools that can greatly improve the situation.

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