Keys to success selling wine in the US -What’s IN and what’s OUT?

I recently completed a survey from a wine trade organization that was seeking insights about what wineries from outside the US need to know to be successful in this market. I could tell by the questions they asked, this organization was clueless. I kept looking for “none of the above” as a response to the questions they asked.

So, once again, I find myself providing a public service to all wineries (both foreign and domestic) who are still operating under the delusion that somehow their story, their wines, and their marketing programs are unique enough and distinct enough to merit placement on wine lists and store shelves.

“Winning” in the marketplace today requires much more than product, package, price, and promotion. The four P’s are important, no doubt, but they are no where near enough. So, the big question is, if those things aren’t enough then what CAN you do?  What, then, ARE the keys to success selling wine in the US Market?  For those who are ready to hear it, here’s my list of what’s “in” and what’s “out.”

What’s “IN”

Working smarter not harder.

Less is more. Leverage the 80/20 Rule in everything you do. For heavens sake STOP confusing activity with achievement. Too many sales people spend their time on extremely low value activities. Selling one case of wine at a time should be a first-degree felony if you’re drawing a salary plus a company car and an expense account. Don’t step over a dollar to pick up a dime.

Direct to Trade.

Just about every major retailer – both on and off premise- plus any wine buyer with an IQ above room temperature has realized cutting deals directly with small, independent wineries and using clearing distributors to fulfill their orders is the way things get done nowadays. Why? Fatter margins, that’s why. Go to the websites of Merchant 23 and LibDib and read everything you can. Or don’t- and continue to wander aimlessly in the desert of despair.

Data and Technology

Buy your own RAD data. Implement CRM and then develop the intestinal fortitude to have everyone use it. I’ve got a short message to owners and sales leaders who pay good money for these things but let their highly paid sales team skip out on using them: grow a pair.

Key Account Targeting

Don’t rely on anyone outside your organization to determine where your products should be sold. Don’t rely on anyone outside your organization to identify the 20% of the accounts that drive 80% of the volume. Use your data and technology to restrict sales activity to only these accounts.

What’s “OUT”

Distributors

This is really very simple. If it’s important to your winery and your brand, you’re going to have to do it yourself. YOU take responsibility for your own outcomes. Don’t blame it on the distributors if you’re not meeting your distribution and volume goals. They are doing the best they can amidst unimaginably challenging circumstances. The best they can do is amplify YOUR efforts. Help them help you. I guess it’s not so much that distributors are “out” as your unrealistic expectations of them are “out.”

Wine Education

Is it important? Yes. Is it compulsory? Yes. Will it drive sales and distribution? F— No! Wine knowledge is important but it’s nowhere near enough. Put down the wine glass, pick up a calculator. This is a BUSINESS! In fact, it’s one of the most capital-intensive businesses on the planet. Go have coffee with your CEO. Ask her about the company’s return on assets. Ask to see the Statement of Cash Flows. Ask her which she thinks is more mission critical to the company’s success – achieving the next level wine certification or a shit ton of revenue.

Excuses

Our prices are too high. We didn’t get a good score. We sold all that wine to Costco last year and now we’re lapping those numbers. Our label won’t stand out on the shelf. We need better POS. We need to spend more on incentives. We need more salespeople. On and on it goes. Excuses are crutches for the weak. This is a very tough, very competitive business. Winery owners and sales leaders, here’s a nickel’s worth of free advice: Fire every sales person who can’t consistently deliver their numbers and use the money to implement the things on the “IN” list above. Don’t put up with excuses for one second. Don’t put it off, either. The best time to plant a tree? 20 years ago. The second-best time to plant a tree? Today.

Our industry puts up with too much coddling. We’re WAY too in touch with our “softer side.” Times have changed. Times are tough and tough times call for INNOVATION, new methods of operating and modern strategies. As a consultant to wineries – both inside and outside the US – one of my greatest joys is watching the light bulb come on for a winery owner. Seeing their eyes brighten as they realize there IS a better way to consistently sell all the wine they make and do it much more profitably. Then we BOTH smile as we realize so few people have really caught on to this. They are still running plays out of the old wine-sales playbook.  And that is great news for the rest of us who are all ready implementing the new one.

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

Putting the Business Back in the Wine Business

People get into the wine business for various reasons but the most obvious one is they love wine. A quick Google search of the phrase, “Why I love wine” yields more than half a billion results. Half a billion! Once you’ve been bitten by the wine bug, you are helplessly and hopelessly carried along on a never-ending quest for knowledge, discovery, and hedonistic pleasure. Wine quenches not only your soul’s thirst but your mind’s as well. History, tradition, geography, and health are just a few of the more cerebral facets of wine.

But, for all its romance and sensuality, wine is also serious business. Its commonly accepted that the best way to make a small fortune in the wine business is to start with a large fortune.  Between land, buildings, equipment, employees, and reams of regulations, starting a winery is one of the most capital-intensive endeavors on the planet. And even if you do everything right, you still must wait many years before you’re ready to bring your precious vino to market. And that, my friends, is when the proverbial s*#t gets real.

Selling all the wine you make is a hundred times harder than it was ten years ago. The consumers are there, no question. With the Baby Boomers on one end and the Millennials on the other, there is no shortage of people who want to buy wine. The problem is two-fold: tens of thousands of competing brands and fewer and fewer distributors. There is a bottleneck that continues to gets more constricting every year.

What remains shocking to me (and I addressed this at the Wine Industry Technology Symposium two summers ago) is how few wine companies have made the appropriate adjustments. A reasonable person would think, in the face of massive headwinds, sales executives would be ripping pages out of the old playbook by the dozen and sweating feverishly in front of their war-room whiteboards. But, nope. They just keep running the same old plays. Wine education. “Managing” the distributors (it hurts just typing those words). Creating incentives. Planning crew drives and “work-withs.” Organizing trips to the wine country. Standing up and boring the snot out of people at a wine dinner.

So for those still asleep at the switch, and as a free public service, allow me to put a few modern strategies on your clipboard. It’s time to put the business back in the wine business. First, stop depending so much on your distributors. The days of distributors being able to do everything for you are long gone and they are never coming back. Next, invest in data, technology, and the best practices that go with them. Put down the Riedel and pick up a keyboard and mouse (or better yet, an iPad). The 80/20 Rule is real, and you ignore it to your peril. The data and the tools exist to be much more strategic in the use of your sales resources (time, people, dollars). The key to accelerating sales growth is to narrow the focus of your activity to only the most attractive and responsible accounts. The data will tell you what accounts those are. Thirdly, throw out the “old school” measurements like shipments, depletion, and accounts sold and start tracking POD against target accounts, sales per point of distribution (velocity), and level of market penetration. Lastly, hold people accountable for results. CRM is the answer and since you now have a keyboard in front of you, start searching the internet for articles on why it’s so valuable. Don’t worry about how your sales team will respond.  If you can’t change your people, change your people.

Nothing I said in the previous paragraph is sexy. None of it is romantic or hedonistic or even remotely sensual. But it is absolutely mission critical if you want to survive. There will be a time and place to put up your feet and watch the light play off your magical elixir. But not before you’ve sold all that wine stacked up in the warehouse.

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

Wine Knowledge Matters, But WAY Less Than You Think

I’m sure to draw some fire for uttering such blasphemy, but if you take a very hard, very honest look at what’s really going on in the wine business today, you’ll see that wine knowledge, while very necessary, is no longer sufficient to compete and win. And, that’s my whole point. No matter how much you know or what levels of certification you’ve achieved, it’s not enough to overcome the intense competition for wine menus and shelf space. Too many wines, too few distributors, and a generational shift in buying habits have changed the rules of the wine-selling game so dramatically, most wine companies who operate in “traditional” ways are struggling. A quick look at the latest US Nielsen data shows that of the 67 manufacturers who produce and sell 84% of all wine in the Nielsen universe, 55% of them are down in volume over the last year.

It should be no surprise that focusing on the where, how and by whom each wine is produced would be first and foremost in our minds. With the possible exceptions of cheese and child-rearing, wine is the most complicated and difficult subject on the planet to master. And this fascinates us because in addition to being complex, it’s also intensely pleasurable. For most of us, wine is literally essential to joyous living. But, wine is also a business. And being successful in business requires skills and knowledge that are as far less stimulating to our base instincts.

Take for example the chore of selling wine. For whatever reason, our industry is stuck on the notion that if salespeople just knew more about the product, they’d be able to sell it much better. I can’t tell you how many times I’ve showed up at the annual national sales meeting of a wine company, saw “training” on the agenda, and knew exactly what that meant: we’ll be tasting a lot of wine.

OK, so now I’m really going to piss a lot of people off. The key to successfully selling wine (or anything, for that matter) has very little to do with product, presentation or persuasion and far more to do with solid business acumen and strategy. This is so difficult for most wine sales people to grasp because they didn’t join this industry to be “business people.” They want to learn and teach and pair stuff and feel superior and memorize as much as their brains will allow. Now, hear me out, please. There is nothing inherently wrong with these things. The problem comes when there’s too much of the former and not enough of the latter.

The scales are tilting. It’s a dog fight. New abilities are needed. It’s about margins, not mid-palate. It’s about segmenting, not seamlessness. It’s about prioritization, not phenolics. While most are left-banking it and right-banking it, the REAL bank wants their money! I am not exaggerating when I say there are salespeople on the street today that can rattle off all the Crus of Beaujolais but don’t know the difference between markup and margin.

Even the measurements of success have changed but very few are paying attention. We think because (after 90 minutes of talking and tasting) we sold a case or two of wine that we’re doing our job. Distribution is one thing, but QUALITY distribution is something altogether different. Business savvy wine companies today measure the “stickiness” of high quality placements and the “velocity” that each point of distribution generates. There is rigor and discipline in their ground game.

Wineries today (especially those who are not profitably and consistently meeting their business objectives) need to take a hard look at their sales strategy and sales process. It is too skewed towards product knowledge? A solid foundational mastery of the product we sell is compulsory. But, it’s not enough. Let me just rewind that for emphasis: it is not enough. It’s time to start weaving in the disciplined best practices so essential to the business. If you’re not sure where to start of where to go for THIS type of training, my door is always open.

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

To build a great sales team, start at the bottom

Some sales leaders believe the key to generating high levels of performance from their sales team is to threaten, bribe, cajole, and berate them. “Leading” by fear and intimidation is hardly what I’d call leading. In fact, if you are currently part of such a sales culture, I advise you to leave immediately.

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The idea that salespeople need to be motivated is preposterous. To watch some sales leaders in action, you’d think that salespeople are the laziest, stupidest creatures on earth and need constant supervision. If this describes your company, your problem is not the salespeople; it’s a lack of leadership skills and hiring practices. If you have salespeople who need to be motivated, you not only have the wrong salespeople, you have the wrong leaders.

The truth is great salespeople don’t need anyone above them telling them what to do or how to do it. Sales teams aren’t something that needs to be “managed.” There are really only two things they need from their leaders: stay out of their way and remove any barrier that prohibits them from taking exceptionally good care of their customers. Yes, I said “their” customers. Great salespeople are like franchisees. They take a winning product line and the proven systems of the franchisor and build a wildly successful business around it.

Oh, we’re really getting to the center of things now, aren’t we? To those sales pros and leaders who “get” this, no further explanation is necessary. To those who do not, no explanation will suffice. So, I guess there are really only two potential audiences for this blog post: salespeople who need to jump ship and find a company that “gets it” and business owners and executives who care about long term top line growth.

Great sales teams are built from the ground up; one sales pro at a time. One of the reasons this is not more widely accepted is because so many companies are doing it wrong. It’s a matter of perspective. Most companies are product focused rather than customer focused. The idea that if you build a great product, customers will automatically follow is only partially true. In fact, it’s a very small percentage of companies (think Apple) where the products are so exceptional they hardly need “selling” at all. For the vast majority of companies, there’s so little differentiation and so much competition (craft beer or wine, for example) that having a sales team is essential.

So you’ve got what you think is a great product or portfolio of products and now all you need is a hotshot sales team to sell it? Terrific. And, here’s where things go horribly wrong. I’m speaking directly to business owners and executives now: don’t believe the “conventional wisdom” of what a sales team is and does. Don’t fall into the trap of thinking sales are generated by whip cracking and carrot dangling. Don’t use a top-down approach to building your sales team. Here’s a common scenario: A company gets to the stage where they need a sales team so they find some “sales manager” type person and ask him/her to start hiring. But, unless this directive is accompanied by a solid strategy of what constitutes a great salesperson and how to hire them, what you typically end up with is a posse of old-school, transactional sales people who aggressively pitch products to customers. This is not the way to gain lots of customers. And the customers you do gain via this approach don’t “stick.” This is a top-down approach.

Run of the mill salespeople who have never been properly trained in the modern ways of selling are a dime a dozen and the turnover is very high with these folks. So, of course, the notion that they need to be “managed” just gets perpetuated. And since the customers you gain by using them don’t stick, you have to keep turning the heat up; quotas, commissions, bonuses, threats, and all sorts of trickery to “motivate” your sales team.

Instead, start at the bottom. What every business truly needs are customers. So, that’s where you should start. If you want to know what customers want, ask them. You could also ask a great salesperson. Start with one great salesperson and build up from there. Find salespeople who know how to deliver for the customers. Then find sales leaders who know how to hire and lead great salespeople.

If you’re not consistently meeting your sales goals now, consider this an invitation to start looking at this from an entirely new perspective. Taking the time to understand how great salespeople acquire and retain lots of customers could be a huge game changer for your company. And who knows; you might even find with 3 or 4 great salespeople on the payroll, you no longer need that high-priced sales manager.