Welcome to the new reality

The longer you’ve been in the wine & spirits sales game, the harder this concept is to grasp – what distributors used to be able to do for their suppliers they can no longer do. Why? Quite simply there are too many suppliers & brands and way too few distributors. As a result, that sets up a new reality that if you fail to appreciate will leave you seriously frustrated. You need to help your distributors help you!

So, YOU must adjust to the new reality and let go completely of any notions that you can somehow get your distributors to perform at a higher level. Let me be clear. The diminishing of distributors’ capabilities is not a matter of “motivation” or intention. It’s simply a function being in a very overwhelming situation. So, stop the seriously flawed belief that somehow more training, more communication, more accountability, and more incentives will improve your distributors’ performance. Put your bleeping “trackers” in the paper shredder where they belong!

How could so many people be so out of touch?

When I look at a typical wine sales job ad, I’m astounded to see evidence that this way of thinking is still very much alive. As I peruse the “essential functions of the job,” I see bullet points that are so out of touch with reality it’s sickening. How could so many people be so wrong about something so obvious? Here’s why: people are making the fatal assumption that what used to work still does.  

Now, for those of you reading this who are finally ready to accept the new reality and DO something about it, consider this article to be a nickel’s worth of free advice. It’s time to start helping your distributors help you.

What can and should the distributor do?

I think it’s wise to re-calibrate your expectations to the lowest common denominator and slowly, incrementally move up from there. Think about the most basic capabilities you NEED from your distributors: a) purchase pallets of your products and store them in their warehouse, b) ship them to accounts as ordered, c) do it at the correct price, d) don’t run out of stock.

Then the next level is to have their sales reps actively building new distribution for you. But here’s where things start to go wrong for most suppliers. This is not going to (and should not) happen without YOU doing your part. I’ve said this before but unless YOUR footprints are all over the marketplace, you’ve got no right to expect the distributors to do it. In fact, a good rule of thumb is the best you can expect the distributors to do for you is MATCH YOUR EFFORTS. Once again, help them help you!

Now, if you are one of the countless supplier “partners” that feel it’s the distributors’ “job” to do these things you simply must wake up and recognize those days are long gone. It’s not a question necessarily of whether not a distributor CAN sell your products but more one of WILL they sell your products. And whether they will or won’t is completely up to YOU. You need to be the lead dog on the sled- not them.

What should YOU do?

Once you’ve come to terms with the cold hard facts that you’re going to be limited in what you can expect the distributors to do for you, you can then get busy executing a newer, more modern approach to building distribution. I suggest these 3 important steps:

1. Have a plan. A REAL plan. A REALISTIC plan. A plan that based on solid research of the market, the competitive landscape, and the “complexion” of the market. By this I mean chains versus independents, on premise versus off premise, etc. Where’s the business being done? Where are the highest value targets? What’s trending? I’m not going to go too deeply into this in this article but suffice it to say you need to do your homework and lots of it.
2. Create your own target list(s) of accounts. Start with a “profile” of the idea customer for your brand. Then start researching accounts that fit that criteria. Adopt the mindset that less is more; fish where the fish are; not all accounts are equal, and the 80/20 rule is real.  Let’s face it: time, people, money will always be very limited. Therefore, you can’t be everywhere calling on everyone. The results-by-volume approach is extremely foolish. Being more selective in the use of your resources will provide a much greater return on your investment. In case you haven’t picked up on this yet, the target list is for YOUR efforts. Don’t just hand it over to the distributor.
3. Take responsibility for generating demand for your brands with both trade and consumers. How do you do this? There are several powerful ways, but I highly recommend a combination of Facebook Lead Ads and email marketing. We use Constant Contact and recommend it to all our clients. Use the highly targeted Facebook Lead Ads to grow your email list (one for trade and one for consumers) and use the email list to market and “sell” your wares. There is a learning curve to all of this but isn’t it wonderful to have something that is completely within your control?

DISTRIBUTORS HELP THOSE WHO HELP THEMSELVES

Look, there are no doubt varying degrees of successful collaboration between suppliers and distributors. There are those who do an exceptional job, those that are average and those that truly suck. I suggest you figure out where YOU are on the spectrum and resolve to move up the ladder to the next wrung. I will just say this in closing. There is a magical correlation between how hard YOU work in the market and how hard your distributor works for you. So, go forth and leverage it! Help your distributors help you!

While I’m sure occasionally successful sales blitzes do exist, most of them are a giant waste of time and money. I know I’m going to get some vitriolic responses to this post but someone has to tell the emperor he has no clothes. Might as well be me.

There’s only one reason you would want to keep doing something that is not effective and that is if the thing you’re doing is really about something else. In the case of the time-honored wine market blitz (or crew drive), It’s about demonstrating activity. It is not really about selling more wine or building distribution. For proof, just look at the evaporative nature of these “new” points of distribution.

The standard playbook for the wine sales game has not changed very much, if at all, in the last 30 years. And, by far, one of the most dog-eared pages in that book is the market blitz. The idea is to send lots of people into the market place for a day (or multiple days) to present and taste a supplier’s wines to lots of buyers for the purpose of securing new distribution. In theory, it makes total sense. And, to be fair, there was a time in the late 80’s and early 90’s that it really worked. But here in 2018, anyone with a I.Q. above room temperature knows very few if any of those new placements “stick.”

Our industry venerates activity. It’s why we tally the number of sales calls we make. It’s why we want to see our sales people scurrying around having meetings with distributors, “working the market,” and filling out reports (so we can make sure there’s lots of activity). After all, it costs a fortune to have a sales team! To justify the expense, we expect to see people being “busy.” I read a lot of ads on winejobs.com and most of them include a bullet list of “essential functions” of a sales job. These dockets are rife with activity especially those activities having to do with the distributor.

Now, I have written extensively about the futility of expecting your distributors to get much done for you so there’s no need to belabor those points here. Suffice it to say most of the items on the list of activities to do with (and to) a distributor are useless. But, of all the activities you could squander precious resources on, the sales blitz is the most colossal waste of time imaginable. So, why do so many wine companies still do it? Do they really not “get” that none of those placements stick? Do they not realize the entire charade is orchestrated in advance even to the point of retail and restaurant buyers playing along?

The best way I can explain it is like eating one of those king-size Snickers bars. It feels fantastic when you’re in the middle of doing it. Managing distributors and their accompanying geographical scope is a very difficult job. It’s really hard to get a meeting with their management. It’s like pulling teeth to schedule salesperson ride-alongs. At times it feels like you’re getting nowhere. But a blitz! Oh, my heavens. It feels like everyone at the distributor has stopped what they are doing for a day or two and is focusing solely on you and your products. The happiest day in a winery salesperson’s life is at the end of the blitz day crowded around a small table in a dive bar quaffing cold beers (it’s always beer) with their “crew” swapping war stories and tallying the cases and placements. Sheer euphoria!
There’s only one problem. It was all for show. An illusion. A farce. A charade. And, if you ask me, a very poor substitute for doing the real, very un-sexy work of building high quality distribution that STICKS. Not sure how to do that? Give me a call and I’ll be happy to help you out of your straitjacket.

When I first published the original blog post almost 2 years ago, it went completely viral receiving over 5,400 views, 52 reshares, 34 comments and 180 likes. You can read the original post here.

Clearly, this article struck a nerve which wasn’t a complete surprise. But, what DID surprise me was how supportive distributors were of the piece. It became apparent to me that I was delivering a message that desperately needed to be sent to the vendor community, but no one wanted to be the one to send it.

The key takeaway from the article was, “Times have changed.” What used to work (educating distributor sales teams, creating meaningful incentives, and holding sales crew drives) is no longer nearly enough. The simple reason is distributors, in this age of consolidation, are completely overwhelmed. They simply cannot do for their vendors what they used to be able to do – especially if you are expecting them to do it all for you.

In this “refresh” or what I’m calling “Part II,” I want to expand on that theme. As an expert sales consultant to wineries and craft distilleries, when I encounter a client that is unhappy with their sales, the first thing I ask is, “To what extend are you relying on your distributors to build distribution for you?” It is shocking how many continue to believe that finding and retaining the services of a distributor is the end goal of their distribution strategy.

For further proof, just scan through a few of the classified ads for wine & spirits sales jobs. In the “Essential Duties and Responsibilities” of the ad, you’ll see phrases like, “establish and maintain strong relationships with all levels of distributor management personnel,” or “provide clear goals and supervision of distributors,” or “adequately motivate, educate and incentivize distributors to achieve volume and distribution goals.” So, let me get this straight, the key to building high quality distribution is to motivate, educate, and incentivize the distributor?” And, “clarity of the goals” will somehow move the needle? Man, oh man, are you ever stuck in the 80’s!

I’d like to provide a public service to all stuck-in-the-80’s wineries and craft distilleries out there by making two very important points:

• Even the very best distributor can only magnify your efforts in the market. So, if you or your people don’t work on your own behalf in a market, don’t expect your distributors to work on your behalf. Help them help you. It’s that simple.
• If it’s important to you, you must do it yourself. Do you want to gain placements in an important regional chain? Then put in the time, energy, and hard work it will take to establish solid, business-based relationships of your own. Don’t expect the distributor to just set you up with an appointment so you can piggy back on their years (and in most cases -decades) of hard work. Do you want to have your high image wines on the wine lists at high image restaurants? Then YOU must not only put in significant time in the trenches but be very patient. There is nothing so special in your sample bag that these restaurants just “have to have it.” The relationship has to come first and it will only happen if you earn the right to sell to them.

So, if you can’t rely too heavily on distributors to build your sales and distribution for you (like in the good old days), what can you do? You can start by waking up to the reality that is 2018. It’s a new day, a new environment. Like the old Vaudeville joke where the guy goes to the doctor and says, “It hurts when I do this…” and the doctor responds, “So, stop doing that!”

Once you’ve accepted the new reality, you can begin taking steps towards the do-it-yourself end of the spectrum. Decide which key accounts you want to be in. Commit to investing in RAD data and CRM. Restructure your sales team into two distinct roles: those that manage distributors and geography and those who call on chains and key accounts. Lastly, leverage digital and social media focused on both trade and consumers. It’s a new day and time, folks! And some of you need to go “back to school” to learn the NEW ways of building sales & distribution. To that end, my door is always open. I’ve shown others how to adjust. I’d be happy to show you and your team as well.

Ben Salisbury is an industry veteran and former sales executive with Constellation Brands and Ste Michelle Wine Estates. He now operates his own sales consulting practice for the wine & craft spirits industry. ben@salisburycreative.com

 

There’s a popular but delusional belief in the wine industry that distributors will build your brand for you. Same goes for spirits and beer suppliers. It seems a reasonable assumption on the surface. After all, that’s how it’s been done since the repeal of Prohibition. The best supplier sales leaders in America have built outstanding careers and stellar reputations on their ability to leverage relationships they’ve worked hard to build over the years with their distributor partners. It used to be that a national sales manager with strong ties to the largest distributors in the country was worth his weight in gold. But, not anymore and here’s why: distributors are constitutionally incapable of doing for you what they used to do. Let the hate mail ensue, but just because something is hard to accept, it doesn’t make it any less true.

Don’t get me wrong. Distributors play an indispensable role in these United States and always will. But times and circumstances have changed considerably in the last 20 years. It’s just crazy, though, how few people have woken up to this new reality, let alone accepted it. If you are a national sales manager and you’re still using the same playbook that got you to where you are today, you are in for a rude awakening. But don’t just take my word for it; consider the facts.
Twenty years ago, there were 2,600 wine companies peddling their wares in the US and about 3,000 distributors. During these glory years, distributors excelled at placing your products in thousands of restaurants, hotels, liquor stores, and grocery chains. And smart suppliers actively participated in the process by investing in education of the distributor sales teams, creating exciting incentives, organizing crew drives and sales blitzes, and bringing sales people out to the wine country so they could capture the magic for themselves. And, of course, nothing was as valuable as spending time in salespeople’s cars and calling on accounts with them; teaching them to sell your brands when you weren’t around. The suppliers who did these things well prospered magnificently.

But this isn’t 1995. It’s 2016 and these tactics are no longer near enough. There are now fewer than 700 distributors and almost 9,000 wine companies competing for space on the retail shelves and restaurant wine lists. While they’ll never come right out and say it, distributors are completely overwhelmed. They have too many suppliers to satisfy. Ongoing consolidation has only exacerbated things. It has made life miserable for the small-to-medium sized suppliers and most have no clue what to do about it.
A good start would be to accept the current reality and adjust your expectations accordingly. You need to start taking more responsibility for your own outcomes instead of expecting your distributors to do it all for you. They will certainly do what they can to help but the best you can expect is for them to match YOUR efforts. If you don’t show up in the market, they won’t show up.

It’s time for you to throw out the old playbook and upgrade to the new, modern approach. And here it is in a nutshell:
First, invest in your own RAD data and the tools to analyze it so you’ll have full visibility into the quality of your distribution. Knowledge is power and you can’t leave this up to anyone else. You’ll be amazed at what you discover when you bring this data “in house.” Second, before you hire another sales person, invest in a CRM system to give yourself power and control of your own destiny. We’re talking beyond-your-wildest-dreams power and control. Lastly, toss out the hollow, useless metric of “Accounts Sold” and replace it with “Accounts sold Against Targeted Accounts” because not all accounts are equal. Identify the 20% of the accounts that are capable of delivering 80% of the volume. If you’re not sure how or where to get this information, give us a ring. We call this Key Account Targeting (KAT) and we do it all day, every day for many suppliers. By narrowing the focus of your sales resources to only the most attractive and responsive accounts, you will achieve two things: 1) dramatically accelerate your distribution growth and depletions and 2) start relying less and less on your distributors. Careful here- I’m not saying you don’t need distributors. That day willnever come. But you can adjust your expectations to better fit reality.

Now here’s the kicker: most people reading this blog post will not accept what I’ve just written. The gray-haired leaders of our industry think they already know it all. There’s nothing new under the sun in their minds. Hey, if doing things the old fashioned way is still working for you, more power to you. But, for the rest of you who aren’t happy with your current level of sales, are frustrated with the quality of your distribution, and aren’t entirely sure what to do about it, there IS hope. If you’re open to completely transforming your business and ready to join the small band of us who are already doing it, we’re ready to welcome you into the tribe.
Ben Salisbury is a 30- year veteran of the adult beverage industry and founder of the fast-growing consulting firm, Salisbury Creative Group, Inc.

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.