Small Business BC Retail Distribution-18Apr2013
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Have you developed a product that you are ready to distribute to the retail market but not sure where to start? Attend this seminar and let Gerry Spitzner use his 40 years of retail experience to help you plan your sales strategy with potential retailers. Learning Objectives: >Discover how to structure sales calls to retailers, with the best results. >Understand the methods retailers use to decide what products they will buy for their stores. >Find out the common challenges retailers face; how and why they buy. >Uncover the cardinal rules you should follow when making your first sales pitch to a prospective client >Learn the terminology, technology and measurements retailers use to decide which products will make the cut. >Find out how merchandising and pricing works in both chain and independent retailers. >Discover the logistics and supply chain systems of getting products to the retailers’ door.
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Small Business BC Retail Distribution-18Apr2013
- 1. Small Business BC Gerry Spitzner | retailSOS.ca April 18, 2013
- 2. Thoughtstarters Purchasing methods Distribution Product Preparation Presentation retailSOS.ca | Gerry Spitzner 2
- 3. Help you with insights for creating, engaging and keeping your customer. Inputs, outputs and outcomes for your business plan and your sales/marketing plan. Answer your questions. retailSOS.ca | Gerry Spitzner 3
- 4. Why they buy How to approach retailers What buyers look for in suppliers What buyers look for in a product Retail pricing and merchandising Retail distribution and logistics channels Your sales and marketing plan retailSOS.ca | Gerry Spitzner 4
- 5. POS = point of sale POP = point of purchase WMS = warehouse mgmt system SKU = stock keeping unit MOM = minimum order multiple CPG = consumer package good retailSOS.ca | Gerry Spitzner 5
- 6. IND = independent retailer UPC = universal product code QR = quick response code PO = purchase order GMROI = Gross Margin Return On Investment CRM = Customer Relationship Management retailSOS.ca | Gerry Spitzner 6
- 7. EDI = Electronic Data Interchange EFT = Electronic Funds Transfer EDLP = Everyday Low Pricing OTB = Open-to-Buy POG = Plan-o-gram RDA = Retail Display Allowance retailSOS.ca | Gerry Spitzner 7
- 8. This packet of thought starters is just that; a starting point. Let your mind wander and consider what you can do to help retailers minimize risks and maximize profitability. retailSOS.ca | Gerry Spitzner 8
- 9. The 4 P‟s of marketing ◦ Product, Price, Place and Position 7 P formula for marketing success ◦ Promotion, Productivity and “Profit-unities” How will this product generate incremental sales for me? And repeat. retailSOS.ca | Gerry Spitzner 9
- 10. What‟s the difference between your customers and your consumers ? retailSOS.ca | Gerry Spitzner 10
- 11. How to sell or why retailers buy; which do you prefer to learn? Who are people more likely to believe; themselves or you? Who is better at closing the sale; your potential retail customer or you? retailSOS.ca | Gerry Spitzner 11
- 12. Have you ever had buyers remorse? retailSOS.ca | Gerry Spitzner 12
- 13. Show me the value; or I‟ll show you the door. What is value in the 21st century? ◦ Value is a function of the bundle of perceived benefits offered at a given price. ◦ Sell the „applied‟ benefits of the benefit you and your product offer. Develop your value proposition. ◦ Prospective customers should be able to visualize exactly what value you could bring their organization. retailSOS.ca | Gerry Spitzner 13
- 14. Taking a look at the initial purchasing process from the buyer‟s perspective offers invaluable insight to consider in your own selling process. retailSOS.ca | Gerry Spitzner 14
- 15. Profit; make money or save time Want products that turn over at a price that will make them money They want to know the repeat purchase potential, and can it be replenished quickly and reliably. retailSOS.ca | Gerry Spitzner 15
- 16. How can I keep my customers in the store longer? ◦ Increases the average sale per customer Look at products through the eyes of consumers to meet leading trends ◦ Increased impulse sales = increased average sale per customer retailSOS.ca | Gerry Spitzner 16
- 17. Do you sometimes wish you could just read your buyer‟s mind? Ask; don‟t tell. Stop „selling‟ and help your customers buy. retailSOS.ca | Gerry Spitzner 17
- 18. Top line sales and cash flow Customer traffic Customer profitability Staff productivity Return on investment; ROI retailSOS.ca | Gerry Spitzner 18
- 19. Inventory is one of the top two controllable assets in the business. Do we really need that? ◦ does your product fit my current market mix, ◦ do I have the space to merchandise it, ◦ do I have the cash flow (money) to pay for it? ◦ What happens if I‟m stuck with it? retailSOS.ca | Gerry Spitzner 19
- 20. Inventory is the retail gamble It‟s easy to turn cash into inventory...the challenge is to turn inventory into cash. Help me move it; and promote it. retailSOS.ca | Gerry Spitzner 20
- 21. Make yourself irresistible to crazy-busy buyers and customers... retailSOS.ca | Gerry Spitzner 21
- 22. Complexity and information overload brings them to a screeching halt. They subscribe to the “ If it ain‟t broke, don‟t fix it “ philosophy. retailSOS.ca | Gerry Spitzner 22
- 23. They think making risky decisions is career inhibiting. Especially at chain retailers. Most of their options seem like near clones of one another. Not tolerant of stupidity or incompetence in other people. retailSOS.ca | Gerry Spitzner 23
- 24. Make your presentation in terms of the retailer, your customer. retailSOS.ca | Gerry Spitzner 24
- 25. How they benefit, how they profit, and how they produce will provide value. retailSOS.ca | Gerry Spitzner 25
- 26. Focus on Challenges Share Outcomes Engage in Conversation Suggest Next Steps retailSOS.ca | Gerry Spitzner 26
- 27. Keep things simple Demonstrate strong biz case Minimize the risk Prepare, prepare, prepare retailSOS.ca | Gerry Spitzner 27
- 28. In addition to mentally preparing for the meeting, here's a list of some of the things a retail buyer may expect to see at your presentation. retailSOS.ca | Gerry Spitzner 28
- 29. What your biz background is Your Financial means Number of years in business Geographical limitations ◦ What area can you physically cover and ship to? Always remember, while you are qualifying them; they are qualifying you. Know, like, trust. retailSOS.ca | Gerry Spitzner 29
- 30. Do not expect the retail buyer to know everything about the product category. ◦ Come in with some facts & market research. ◦ Sales trends in the category, consumer research. ◦ Trend watching; help me with what‟s hot. ◦ Tell me about something new or up and coming. ◦ What‟s happening in the marketplace? retailSOS.ca | Gerry Spitzner 30
- 31. You need to know my customers. I do. Do your market research ahead of meeting me then ask me about my market & customers retailSOS.ca | Gerry Spitzner 31
- 32. I need to know your Advertising and promotions plan. How you are going to educate my customers about your product and get them to try it in my store? I don't have these answers for your product; you do. Or you should. retailSOS.ca | Gerry Spitzner 32
- 33. Can you replenish quickly; do you have a solid supply chain? Speed to market is just as important (if not MORE important) than the shelf price or cost of an item. Your supply chain to the MFR. becomes part of my supply chain and I care what it is. retailSOS.ca | Gerry Spitzner 33
- 34. Objections and roadblocks ◦ Objections are signposts that lead you step-bystep toward closing the sale. Understand your customers situation ◦ Help me move product and make money; frame your sale this way. ◦ The buyer is dealing with limited shelf space retailSOS.ca | Gerry Spitzner 34
- 35. Shop the store ahead of time. Understand strategic positioning of the store. Keep things simple; make your presentation short and snappy. Don‟t show everything you have at once. Too many choices confuses the buyer. retailSOS.ca | Gerry Spitzner 35
- 36. The answer is no... ◦ If they feel pressure from you, ◦ If they feel like you're trying too hard to be liked, ◦ If they don't think you understand their business, ◦ If they think you‟re focused on what‟s in it for you, ◦ If they get overwhelmed by what you're saying. retailSOS.ca | Gerry Spitzner 36
- 37. What you say and how you deliver your “pitch” will make all the difference... retailSOS.ca | Gerry Spitzner 37
- 38. Where else are you selling this product? ◦ What makes it sell? ◦ What problem does it solve? I need to know why your product will be wanted by my customers. ◦ Is there a “market match” to my market? ◦ What does it ultimately help my customers achieve? retailSOS.ca | Gerry Spitzner 38
- 39. Is there a need or a market? Or both? A need alone does not = a market; desire does. Desire is the sweet spot where the market is. retailSOS.ca | Gerry Spitzner 39
- 40. Push or pull product? What is the barrier to entry? Is your product future proof? What is the life cycle of product? retailSOS.ca | Gerry Spitzner 40
- 41. Taste, health, ingredients, appearance, susta inability, preparation, packaging, customer value...etc etc. All buyers do things for their own reasons, figure out what the buyer wants and then provide it for them. retailSOS.ca | Gerry Spitzner 41
- 42. Must be easily understood by store staff and consumers. How & Who will educate my customers? What retail price can I get for this product? retailSOS.ca | Gerry Spitzner 42
- 43. A retailer‟s shelf space is their commodity. Add interest and „excitement‟ to their stores with new products and value. Will this item make my store more appealing? Will it add to my average sale per customer? retailSOS.ca | Gerry Spitzner 43
- 44. The retail pricing approach depends on the product and the buyer. Some look at product first; ◦ then see if they can „carry‟ the price Others look at cost first; ◦ they are judging what the selling price would be and if a fit to their market or match in a category. retailSOS.ca | Gerry Spitzner 44
- 45. Setting the right price for your products and services requires balancing merchandising, pricing, placement , packaging, and promotion. retailSOS.ca | Gerry Spitzner 45
- 46. Know your competition Do not compromise on your price Know your taxes; HST to PST/GST Wholesaler upcharges Brokers fees Include all your costs retailSOS.ca | Gerry Spitzner 46
- 47. Mark up & margin. What‟s the difference? All of these terms are often confused in the conversation... ◦ Gross profit percent; GP% ◦ Gross profit dollars; GP$ ◦ Gross margin percent; GM% ◦ Gross margin dollars; GM$ retailSOS.ca | Gerry Spitzner 47
- 48. Tamper proof packaging Display racks and trays Display packages with a window Off shelf areas for new mix Must fit on shelf in section or category it is going to be merchandised in retailSOS.ca | Gerry Spitzner 48
- 49. Plan-o-grams & compliance Package size/dimensions Photos UPC code UPC code that stays on package Packaging is effective and worthy of shelf space retailSOS.ca | Gerry Spitzner 49
- 50. Retail distribution channels consist of some combination of producers or manufacturers, agents or brokers, wholesalers or distributors, transportation, impor ters, and retailers. retailSOS.ca | Gerry Spitzner 50
- 51. Three main supply chain channels... ◦ What is your cost to ship to your customer? Wholesalers Direct Store Delivery; DSD Self Distributors; Chain retailSOS.ca | Gerry Spitzner 51
- 52. Department stores Mass & Big Box Specialty & Discount Catalogue & Internet Grocery & Drug Stores Convenience stores retailSOS.ca | Gerry Spitzner 52
- 53. Within each retail category; 3 types ◦ Chain ◦ Banner stores ◦ Independent stores Who exactly is your ideal customer? ◦ Who is your end consumer? ◦ Where and why does he or she buy? retailSOS.ca | Gerry Spitzner 53
- 54. Is the product WMS friendly? Case and product UPC Dealing with concealed damages Case pack; smaller MOM‟s? Logistics or transportation charges; how are they determined? retailSOS.ca | Gerry Spitzner 54
- 55. Consider using a professional agent, broker or wholesaler. ◦ When you don‟t have your own sales team or sales is not your strong point . ◦ There is a cost; however they have connections and already established relationships. ◦ Some wholesalers have their own sales dept. that you may be able to “tap into” for representation. retailSOS.ca | Gerry Spitzner 55
- 56. A successful marketing plan doesn't have to be complex or lengthy, but should contain enough information to help you establish, direct and coordinate your marketing efforts. retailSOS.ca | Gerry Spitzner 56
- 57. Endure long receivable cycle Provide dating Provide prompt pay discount Payment by credit card Even risk not being paid retailSOS.ca | Gerry Spitzner 57
- 58. Provide a listing allowance Prepay freight; delivery to door Clear up damages and returns Have a plan for recall Sign a vendor agreement retailSOS.ca | Gerry Spitzner 58
- 59. Use a wholesaler or broker that specializes in your product category Referrals are the way to go Value in a short term incentive Becoming the retailer & go online The use of online business media Carefully consider consignment retailSOS.ca | Gerry Spitzner 59
- 60. There is a stumbling block...for importers. National chain retailers have their own import department. Why do they need you? retailSOS.ca | Gerry Spitzner 60
- 61. Now what or what now? … Your outlook is a matter of your positive attitude and willingness to help. retailSOS.ca | Gerry Spitzner 61
- 62. Confidence is the #1 factor ◦ in determining what, from who and where retailers buy... Quality is #2, Service is #3 Selection is #4 and Price is #5 retailSOS.ca | Gerry Spitzner 62
- 63. How can you?... Help them make money Save them time Make them feel safe Make them feel special retailSOS.ca | Gerry Spitzner 63
- 64. The approach to IND‟s and Banners is different than approach to chain... Chain retailers like to act like small retailers IND and Banner retailers look for products not in chains retailSOS.ca | Gerry Spitzner 64
- 65. Just because you are new, doesn‟t mean you are not worth the chance. Retailers need new mix to create, engage and keep customers. Increase impulse sales and profit. retailSOS.ca | Gerry Spitzner 65
- 66. Decide first if you want to approach IND‟s, banner or chain retailers. Then determine your exact ideal retail customer and method of distribution. retailSOS.ca | Gerry Spitzner 66
- 67. Start a sales & marketing plan as a blueprint. Understand your target market, ideal customer and consumer buying motivators. ◦ Retailer (your customer) and end consumers Who, what, where, how and why? retailSOS.ca | Gerry Spitzner 67
- 68. Define your unique value proposition and keep it current. Focus on benefits not just features. ◦ Value is the bundle of perceived benefits offered at a given price. ◦ Consider the applied benefits of the benefit. ◦ Your UVP should include what you bring to the retailers table. retailSOS.ca | Gerry Spitzner 68
- 69. Retailers are looking for new products to differentiate their stores... ◦ They don‟t have time to find them; ◦ They need you to help them find the products and then help them “move” the inventory... This is your opportunity! retailSOS.ca | Gerry Spitzner 69
- 70. Your evaluation is appreciated... Want a copy of this presentation with my speakers notes? E-mail me; gerry@retailSOS.ca retailSOS.ca | Gerry Spitzner 70
- 71. Follow Twitter: @passion4retail Connect LinkedIn: Gerry Spitzner Web: retailSOS.ca Blog: gerryspitzner.com Email: gerry@retailsos.ca Online Biz Card: gerryspitzner.tel Online Biz Card: retailSOS.tel retailSOS.ca | Gerry Spitzner 71
- 72. Gerry Spitzner is an optimist with a natural "kid-like“ curiosity for improving life and business results. He believes in a bright future and our ability to build it together. Drawing on 35+ years experience in multi-site retail retail operations, store ownership and the wholesale supplychain; Gerry brings the leadership, knowledge and market awareness of business development to retail owners helping them achieve growth objectives. He teaches and inspires them to achieve results by aligning their vision with marketing strategy and operational execution. Fascinated with a lifelong curiosity for why customers buy and a passion for retail; Gerry guides leaders and organizations to create, engage and keep great customers by delivering the promise of an extraordinary customer experience. He has devoted his life to sharing his thinking with other retail leaders to manage market analysis and build business plans that increase profitability and create competitive advantage with systems to implement. His company is retailSOS.ca, a Vancouver-based business management consultancy with a suite of outsourced business services to support retail owners starting, buying or strategically realigning their business. With a clear understanding of the business of retailing he uses a solution oriented focus with ideas and alternatives that clients can use to address the changing marketplace issues they face right now. Gerry understands who they are, what they need, and where to find it, helping them market and strategically realign their services to integrate the business activities for optimal growth outcomes through customer experience. retailSOS.ca | Gerry Spitzner 72
- 73. For mfr agents info: http://www.cylex.ca/vancouver/manufacturers%20agents% 20representatives.html For list of mfr agents; Google key words; *manufacturers agents vancouver bc*; or *{food brokers} vancouver bc* For wholesalers; use Google key words; *wholesale (your product category) vancouver bc* retailSOS.ca | Gerry Spitzner 73
- 74. WalMart Vendor agreement: http://www.walmartstores.com/Suppliers/248.aspx Canadian Tire vendor agreement: http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/SupplierRequirem ents.aspx Target vendor agreement: http://img1.targetimg1.com/wcsstore/marketing/ca/company/images/canada/p df/Vendor_Online_Agreement.pdf Home Depot vendor agreement: https://homedepotlink.homedepot.com/enus/Related%20Documents/Canada%20Supplier%20Terms%20and%20Conditions 02-04.pdf retailSOS.ca | Gerry Spitzner 74
- 75. For QR codes: www.qrstuff.com For bar code info; www.gs1ca.org Retail associations: Retail Council of Canada: www.retailcouncil.org NRF - National Retail Federation; Global retail http://www.nrf.com/ retailSOS.ca | Gerry Spitzner 75
- 76. Sales & Marketing ◦ http://www.raintoday.com Sales help and power questions ◦ http://www.gitomer.com/salesHelp/Sales-Help.html Sales and personal development ◦ http://www.briantracy.com Sales strategy and value propositions ◦ http://www.jillkonrath.com/ retailSOS.ca | Gerry Spitzner 76
- 77. Trends: www.trendhunter.com Trends: www.springwise.com Trends: www.trendwatching.com Pricing and margin definition: http://en.wikipedia.org/wiki/Gross_margin Retail, sales & marketing and small business: www.retailwire.com retailSOS.ca | Gerry Spitzner 77
- 78. Little Red Book of Selling; by Jeffrey Gitomer The Sales Bible; by Jeffrey Gitomer ◦ www.gitomer.com Be Different or Be Dead; by Roy Osing ◦ www.bedifferentorbedead.com Unmarketing: by Scott Stratten ◦ www.unmarketing.com Enchantment: by Guy Kawasaki ◦ www.guykawasaki.com/enchantment retailSOS.ca | Gerry Spitzner 78
Notas do Editor
- Thanks for coming-housekeeping details. Do the wrap around; 15 second intro; participants introduce themselves, their product, what theywant to accomplish. Use your handout to write down your own “a-ha” ideas; I’ll send you a copy of this presentation with my notes. Email me at gerry@retailsos.ca; or all my contact info is at my 21st century online business card at retailsos.tel. So, you wanna sell me your product? (resistance, skepticism, and cautious attitude) Have you ever encountered that? How did that make you feel? The question on your prospects mind is “why should I do business with you rather than someone else?”What is the real purpose of a business? Every time I ask this question; the immediate answer I get back is “To make a profit”.But I think this is wrong; because it is focused on you and the transaction. The real purpose of a business is to create and keep a customer.If a biz successfully creates and keeps a customer in a cost effective way, it will make a profit.If for any reason, a biz fails to attract or sustain a certain number of customers, it will experience losses. Too many losses will lead to the demise of the enterprize.Additional questions for you to consider are; “How do I become the preferred supplier of what I sell?” How will you create, engage and keep your customer?Considerthe Life Time Value of a customer and think customers for life…rather than as a single transaction.
- Here are the areas we will cover today.Thoughtstarters- a mental warm upPurchasing methods-timing, requirements, what you need to have and know, measurements retailers useDistribution-the retail channels and the supply chain logisticsProduct-from your perspective and the retailers, pricing/merchandising etc.Preparation- your approach, meeting with prospects, market research, and motivators.Presentation-your presentation will make all the difference if you focus on value.
- Today, my goal is to help you with insights for creating and keeping your customer. What I mean by Insights is - How can I help you? Encourage discussion, ask questions – there are no “out of bounds”.Your challenge is dealing with Crazy Busy overly informed people and how important it is to listen to prospects, to respect their knowledge and research, and to understand how they want to buy, rather than how you want to sell to them.Your Business Plan is a strategic and tactical plan that puts words to the numbers of your own financial plan. Your Marketing Plan is how you will deliver it.In order to achieve that financial plan and create your own sustainable business the most important question you must answer is; “why should I do business with you as opposed to someone else?” I’ll answer your questions at the end of each section...
- The sales & marketing plan is a section of your overall biz plan; it explains who your ideal customer is and how you're going to create customers to buy your product/service. Create a “KILLER” sales & marketing plan to clearly and concisely outline your long term vision and to guide your daily, weekly and monthly activities.Lay out how you’ll bring your product to market, what your target audience is, how you intend to reach and sell to it and at what price. Include info on your competitors, your strategic alliances, suppliers, product/service, promotions, and advertising.
- Before we get started here is the language of retail...a few basic acronyms and frequently used jargon; not an all inclusive list by any means but these are used a lot.POS is the technology used at the cash register (till) to manage the sale; but it is also linked to the stores replenishment systems. Caution; Often confused with POP.POP is the stuff hanging on shelves such as coupons, shelf danglers and shelf talkers; ceiling and window signs, or any instore promotional signage from MFR’s or corp marketing initiatives.WMS also known as Workforce Management SystemSKU is often referred to as “skew”. Each item,clour, or flavour is a skuMOM’s are basically case packs or inner case packs. The minimum order requirement for a sku.CPG; term often used in the grocery/drug store channel to describe Branded items, but not meat, vegetables or Prescriptions.
- IND; those retailers that can make buying and mix decisions at store level. Their own profit centre.UPC; go to http://www.gs1ca.org/home.aspfor info; sometimes referred to as bar codeQR codes; the square box with the squiggly lines; usually directs you to a website; go to http://www.qrstuff.com/ to createPO; referred to as (pee-oh); the doc that most retailers use to place the order with a signature.GMROI; “Gem-roy” is a key product measurement at chain stores.GMROI calculation is GP$/Avg. Inventory at cost during a period of time.CRM is software used by suppliers and retailers to keep track of customers; suppliers use it to keep notes and retailers use it to track and follow up with customers.
- EDI is when a supplier is connected to the retailers replenishment system. Typical in chain.EFT is the way chain retailers transfer funds directly to your bank to pay you.EDLP is a pricing strategyOTB is the buyers budget for purchasing inventory and it is based on what sales they project.POG is the way primarily chain retailers merchandise sectionsRDA money is rebates, promotional allowances, listing feesAre there any acronyms you’ve heard that I’ve overlooked?
- How can you help retailers to minimize risk and maximize profitability?
- Familiar with the 4 P’s of marketing? (refer to slide)...always consider the 4 P’s of within your marketing plan. These are the most important elements.However there are 7 P’s I considered when looking at products. Here is my 7 P formula for marketing success.Promotion…When Ifirst got into retail, I was taught by one of the smartest buyers in the market that he did not care what people had to sell. What he wanted was a way to make sure the goods would move off the sales floor.Same is true today as it was 30 years ago. Don't sell the merchandise, sell the promotion. It’s all about moving product and how you are going to help the retailer move your product.Productivity… is the measurement; POS is the tool we use to analyze data to optimize space and promotions.By analyzing data; get productivity from every square inch of shelfspace & display space. Also, to understand how and why our customers shop with us.Profit opportunities … how is stocking this product going to generate new sales for the retailer?And then repeat; the replenishment and retail sale; over and over. Because repeat sales is where the NET profit is.
- Really...who is your customer?YOUR end consumer is your retailer's customer, the retailer is your customer - If you frame your premise this way, you'll always be on the safe side with retailers.While your consumer data and localized insights are important, retailers don't appreciate suppliers who make assumptions about THEIR customers; customers that they have worked hard to get and keep; researched and gathered an unprecedented amount of data from. (I.e. loyalty programs, social media, surveys etc.)On the other hand, in my experience many suppliers are clueless about their own initiatives, and visions for their total brand (in-store environment, themes, promotions, private and proprietary brand programs, web-to-store tie-ins, etc.).
- If all business is built on relationships, then no matter your enterprize, building good relationships is your business.Your prospective customer wants to buy.The question is whether its from you or someone else who establishes trust by ‘dating’ them, developing a relationship and helping them get ready to buy.The simple truth about selling – and the secret to selling more - is that your customers are better at the closing the sale than you are. If you’re able to lead them to it.Retailers (People) have the answers. All you need are the right questions.Beware the myth of “closing the sale” - Most buying decisions aren't made at the selling table so your goal is to make it easy for your buyer to jog his/her memory when decision-making time does come and to arm them with insights and information that will make your case; when the first meeting is a distant memory.
- Have you ever had... (refer to slide). Show of handsEvery retail buyer has had this feeling too.I usually get this feeling after I felt like I’ve been soldThis is why most buyers/retailers are sceptical and cautious; especially doing biz with people they don’t know.However, simply put; People don’t like to be sold... but they love to buy; The trademark and mantra of America’s No. 1 Sales Authority, Jeffrey Gitomer
- I’m seeing a fundamental shift in the way value is created for customers. The shift is from value that resides in the product or service to value that is created for the customer during the experience of interacting with the service provider. Without a strong value proposition, it’s much harder to sell your products or services in today’s economy, much less even getting in the door of small or big companies. But what exactly is a value proposition? And how is it different from other commonly used terms?A value proposition is often confused with an “elevator speech” or a “unique selling proposition.” It’s essential to understand the difference between these terms because their purposes and sales impact on retailers are very different.A unique selling proposition (USP) is a statement about what makes you and your company different from other vendors. Its primary value is to create competitive differentiation. A USP is often used in marketing materials or in talking with customers who are ready to buy. It’s usually all about you.A value proposition is a clear statement of the tangible results a customer gets from using your products or services. It’s outcome focused and stresses the business value of your offering. It’s all about them.In order to engage your prospect or your customer, there must be some form of interest or perceived value on their part. The secret is to tell stories, paint pictures and ask questions to establish what benefit you and your product offer. Then help me understand how I benefit and how my customers benefit. Sell the applied benefits of the benefit you offer.
- Most people leap to the doing too quickly; they are really good at defining the how and what of their product or service; very few spend time crafting why.Why they buy?; simply put is that a retailer is looking to drive business TO and THROUGH their store.Overall, fulfilling this intention is a key motivator to why retailers buy.What are other important motivators...to why they buy.
- Profit can be a combination of money and time.Buyers simply cannot replace an item that is currently selling well unless you can convince them that your product will earn them more profit margin and provide a faster turn (how quickly the store sells out of the item) so be sure to let them know if you are currently selling your product elsewhere successfully to give them confidence – even if it is on a local level.How often can I repeat the process; therein is the resulting profitability of the sku for the retailer. The repeat sale. This is a key objective on every sku...No sales or repeat sales to my customers=no profit; no profit =no buy again.Turnover is a key measurement and is defined as Cost Of Good’s (COG’s) SOLD divided by Avg. inventory at cost during a specific period of time. I.e. month, quarter, year.
- Retailers need to make their stores interesting to shop. This will keep my customers in the store longer and increases my average sale per customer. It’s a proven fact that the longer a customer stays in the store; the more money they will spend.Average sale per customer is a key measurement; sales (by department) divided by # of transactions.Why they buy...To meet leading trends i.e. ‘green’, the trend to health and wellness, simple and easy to use, local products, imported products and luxurious self indulgence. Present ideas on how the consumer benefits.A major reason that prospects do not buy is because they don’t fully understand what you are selling and how they can use or benefit from it.Use “educational selling”. Show the customer, tell the customer (explain features and benefits), ask the customer (ask questions and invite feedback), and learn your prospects needs.They will figure it out from there.
- What's really going on inside the minds of those frazzled customers to cause them to keep you at a distance, brush you off, dismiss you entirely, or stick with the status quo?Several things are in play, but once you recognize how they think—and what you're doing that is bringing them to the breaking point—you can change your behaviour so that they do the opposite and pay attention to you.“Telling ain’t selling”; I mean what’s the big picture of your sales presentation? What’s the content and are you engaging enough to be different and compelling.Learn to listen; don’t focus so much on you and your message. Put that further down on your ‘Ta Do List’. Focus first on your customers. Hear what they are saying; see what they are up to. Once you’ve been able to connect, and figure them out, then see how you can help them.If you choose to tell people things, people will tell you in the form of resistance and rejection.
- One thing retailers are not thinking about is the stuff you are selling. Notice there is no lost sleep over paying suppliersWhat can I learn from you that will help my business do better, keep my customers coming back, make more money, achieve more profit and be scalable? (this is value)Customer Traffic = is only an opportunity for me to make a sale. I need the right items; in the right quantities to keep people coming back to my store. Traffic = scalable from the perspective of repeatable growing biz.Customer profitability & ROI=Will I make money? How much will it cost me to serve my customer to sell your product? The investment I make in the inventory and the length of time it takes for me to get my money back with a profit.Staff productivity; Can I make money (on your item) with little time and effort of my resources? I.e. staff cost, inventory cost.The least effort required by me is the best productivity for my business. And the highest return on my investment.All of these points have a key connection to the inventory retailers buy.
- Inventory is constantly scrutinized and measured. The other controllable is wages and employee costs.Listing a new supplier is a hassle for retailers; especially for chain. There are over 50K products in the average grocery store & 25K products in the average IND drug store. Adding inventory usually means more sku’s to manage and othersku’smust be discontinued to make space for the new ones. The administrative cost to add product is costly.Do we really need that…it’s a constant assessment of my investment of cash, space and human resources = my RISK.Buyers perception of risk. What if it doesn’t sell or stops selling and I’m stuck with it?So most of the time they are more cautious or sceptical especially with new products.
- So, Inventory mgmt and moving inventory is the main focus of all retailers.Moving it and repeating it; Quickly, Productively and Profitably is cash flow.Andcash flow is the life blood of the business. Help me move it; and promote it; is the applied benefit you provide and that is one of the key values you can provide.
- What if there were a new way to approach business development that would not only improve your immediate results but provide a backdrop for lasting relationships built on a foundation of trust? And what if that approach included simple behaviors you already know how to do but don’t always think about or consciously apply?So, how do you do that?First lets take a look at 5 things crazy busy buyers are thinking about.
- Overwhelmed people can't take in, sort through, or make sense of massive amounts of information, or multiple variables for a major change initiative. When they sense that the effort required will make their lives even more complicated, they call it quits even if the change would have been good for them.Busy decision makers don't have time for things that aren't urgent. They may limp along with all sorts of makeshift solutions and workarounds. Their current inefficient way of doing things may even drain massive amounts of money from their pocketbooks or their company. Despite all that—and the fact that it makes sense to change—they don't do it. It's too much work.
- Nothing is more off-putting to busy people than the thought of a risky decision that could turn into a quagmire, require additional effort for approval, or put their careers at stake. Even a small whiff of risk is enough to prevent many customers from taking any action—or cause them to do business with another company.Most products and services look pretty similar these days—especially to busy people. Even if you have a marketplace lead, retailers believe it's only temporary and that competitors will soon catch up. When retailers can't differentiate, they default to price as a key factor.In every conversation and interaction, frazzled retailers ask themselves, "Does she know what he's talking about? How much work has he done in this field? If they detect insecurity, knowledge gaps, or BS; they won't want anything to do with the seller or their company.None of the above things should come as a shock to you. We all think like that when we are overwhelmed with work and responsibilities. It's a normal human reaction, but it still makes selling tough. And in a challenging economy, that type of thinking is intensified as your prospects struggle with even greater workloads.
- The focus on value is not going to go away. The financial crisis changed this forever. Your job, as an engaging person and a value-driven salesperson, is to make... (refer to slide)Take a moment to consider what’s going on in their world and the current economy…Unlike previous recessions, the latest one shifted consumer behaviour permanently. The retailers customer today is empowered and expects much more for even less, and they will quickly buy on price if a product or service does not demonstrate value in every sense of the word. Improving the retail customer experience is one of the most effective and enduring ways a retail business can demonstrate that value. That’s why delivering a compelling customer experience has become an important competitive battleground for retailers.So, focus your efforts on helping your customer to make a difference in their customer’s experience, not on you getting a sale. Act and talk as if they are already your customer. Take the "Sell" Out of Selling. This approach will trump every ‘system’ of selling ever created.Your customer (the retailer) is thinking... "Why me?" (Why is it suitable for me to consider it? How does it help me achieve my objectives? Why would it hamper me to ignore it? etc.), "Why my category?" (What financial, marketing, sales, etc. need does it address?), and "Why my shopper?" (Will my customers see value in this product? Does it bring new shoppers to the category? Does it create a more profitable sale? Is it an incremental sale? etc.).
- Your customer (buyer) wants to know what’s in this for me and my customer?Focus on these applied benefits of the benefit; the benefits you will help them achieve. These are valuable ideas to articulate and ask questions about.Practice this and get great at it to engage and build a relationship to position yourself as a trusted advisor.Your job is not to sell something; rather it is to fulfil some intention the retail customer has.Use smart powerful questions to uncover what their intentions really are.A great resource for using questions is; Jeffery Gitomer’s Little Red Book of Selling or his earlier book The Sales Bible. The lead in statements will help you with formulating valuable open-ended questions that engage conversation to help pull your prospect rather than pushing for the sale at all costs.For example; what do you look for…?; what have you found…?; what has been your experience…?, how do you determine…?, why is that a deciding factor…?, are there other factors…?, how do your customers react to…?
- Want to capture the attention of today's crazy-busy prospects? Propose an initial meeting that's only five minutes long. Suggest a short phone call or a quick online conference that will give them an opportunity to determine if it's worth continuing the conversation.Follow these steps to create an irresistible 5-minute sales meeting.Your prospects only care about their challenges, not your products or services. Begin your mini meeting by sharing your understanding of the key issues that prevent them from achieving their business objectives. “Virtually every retailer we work with these days is concerned about flat sales. Their salespeople are struggling to make profitable add on sales.”Give examples of similar customers that you’ve worked with in the past. Make sure you tell about how they were doing things before they did business with you and then the results they achieved. “For example, we recently worked with Generic Apparel. Their salespeople couldn’t make add-on sales to key repeat customers. All they ever got was that the customer would go to ABC Accessories. After working with them and our product line, 87% of the salespeople made incremental add-on sales in just 2 months.”Plan your questions ahead of time because it’s impossible to think of good ones on the spot. Make them provocative so that your prospect has to do a little thinking. “How big of an issue is increasing top line sales for you? What initiatives are currently underway in this area? How satisfied are you that they’ll get you where you want to go?”Make sure to recommend a logical follow-up to this initial conversation. “Since this is clearly a concern, let’s set up a meeting to discuss this in more depth. Let’s also get the instore Sales Trainer involved right away because it’s an issue that spans both departments.”
- Four things to focus on...Keep it simple. Everything. As much as possible. Write short emails. Cut unnecessary material from proposals. Show them how you'll make it easy for them. Give them fewer decisions.Demonstrate strong biz case and show prospects the value they'll get from working with you. Help them see how they'll achieve their primary business objectives.Minimize the risk. Demonstrate your personal competence upfront. Talk about experiences with similar customers. Propose smaller initial contracts or deals.Prepare thoroughly prior to selling, presentation, and closing. Think everything through in advance. And leave nothing to chance. Remember, it's the details that make the difference. The salesperson who has taken the greatest amount of time to acquaint themselves with the most specific needs of the customer is the one who builds the highest level of trust and the best sales relationship.When you do those things, you will be irresistible. And that's exactly what you want.
- Today, in the information age, it’s a challenge dealing with the overly informed customer. Retailers don’t want people telling them what they want or need. They’ve already gone online (i.e. Google) and informed themselves to find companies on their own to verify services before committing their scarce purchasing dollars.Yet, buyers want to do business; but with people they know, like and trust. When your prospect views you as a trusted resource, rather than a self-serving sales person the resistance drops.
- Every time you interact with your prospects, they're evaluating you and asking themselves: "Is this a person (company) I want to work with on a long-term basis?“They don’t trust you if they don’t know you. Retailers need to have confidence in you. They see you as an investment of their money and time. Why would I switch from my current supplier to buy from you?Often a sale isn’t made because they don’t have a pressing enough reason to switch from their current supplier to the new product or service. Make me feel safe you will survive.The position you hold in your customers mind determines all reactions and interactions with you. Positioning refers to the way your customers think and talk about you when you are not there.Your position determines whether or not your customer buys; and whether they buy from you again; and whether they refer you to others.
- You need to come in with some facts and market research for the buyer-not too much or his eyes will glaze over. However enough to show her that you know your business and you can help her grow the category in dollars and market share.Buying is a hard job especially at chain retail. For category managers to know their category inside and out takes time to research. How can a chain buyer possibly know what's hot or what their customer wants when they are in a cubicle all day answering calls from desperate vendors? They tend not to get out into their stores.Many IND’s tend to work “in” their business rather than “on” their business. They don’t have time that much time to research trends or find new items. Common to both; The vendor who helps them with this clearly has the inside track to the start of a valued biz relationship. Make sure you ask some open-ended questions and LISTEN- if he states that the product category for his store is weak and the competition and research is strong, maintaining or growing; then the retailer needs help with product mix, merchandising and/or price point.Make me feel special; help me!
- You need to know what it is about my customers that will make your product sell in my store.Then show me and help me by promoting it.I realize I have a big piece of the puzzle too.Find out or I have to tell you what my company's objectives are, what we use as internal measures, how we benchmark success, and how we see ourselves positioned in our market.Ask me.
- Buyers want to see that you are committed to your brand and that you will promote your product so that people will become aware of it and then come to the store to ask for it.I need to know your Advertising and promotions plan. I expect Product demonstrations; Merchandising ideas and instore support, and samples; so my staff and I can try it too.Will you use price to drive trial or will you plan product demos? Will you have instore POP materials, will you use a web site, or online media like Twitter, Facebook, Google Ads, or Pinterest? What is your plan to ensure your product will survive in this competitive environment?Develop a habit of thinking in terms of promotion all the time. Promotion includes all the ways you tell your customers and consumers about your products and how you market them.I don’t want to have to create a market for your product. And I don’t want to babysit your item.
- Be prepared to answer questions about your manufacturing capabilities as buyers must feel confident that you can produce enough product should it sell very well.If this product goes on a “run” or a “heater” can you supply?An empty display or shelf space is deadly to you as a supplier. It won’t last more than a few hours. And your space will be gone. Something else will fill the selling space.Productivity, i.e. Turnover + Replenish=Profit for me.
- It’s only natural for prospects to procrastinate when asked to make a decision involving money. As a general rule, people are hesitant to commit to purchasing a product or service until they have convinced themselves that they need it and are assured they are getting it at a fair price.In fact, research indicates a prospect will say no on average five times before they actually buy. It’s important to remember that an objection is not a rejection of you personally.The fact is there are no sales without objections, objections are a good sign, and you should look forward to them. After all, if your prospect were not interested in your service, they wouldn't ask questions. Simply put, an objection is nothing more than a request for additional information. Top producers not only expect objections during the sales process, but they anticipate them. So, interpret it as a question.Develop an approach to every common objection you will encounter in today’s reality; get them out early in your contact; then work on ways to help your buyer overcome them.The buyer is dealing with limited shelf space, open to buy budgets, limited cash and the ability to test new products.The more time you take to thoroughly understand your prospective customer and your prospective customer's real situation, the more likely you will be in a position to make a sale at the critical moment.
- Let’s take a moment to recap…Here is a strategy to approach retailers that will lead to new clients.Visit at least one of their stores BEFORE your meeting so you are knowledgeable about their current product assortment and how your product fits in.Know everything about the retailer including store count, who their competitors are, and what their goals are as a company.Gain an understanding of how your product fills a needed void in the assortment or mix (in terms of category, price, whatever) rather than duplicating existing content.What other products are available to the same consumer that you’re going after and how is your product superior in a meaningful way, to the other product or service?Don't present merchandise to a buyer that is completely out of sync with their company's direction or target market.Make your presentation as concise and focused as possible, instead of trying to show "everything under the sun”.
- Avoid the temptation to leap to solutions; it is often the single biggest barrier between you and your prospective customer. Usually, the sale is lost because people jump to solutions too quickly.To be most effective in sales today, it's imperative to drop your "sales" mentality and start working with your prospects as if they've already hired you. When you do, it shifts your relationship to a whole new level from the start. Most suppliers are not very effective about getting what they want, because ironically, that’s what they focus on - "What’s in it for me" - and the retailers they talk with feel that energy. By simply making a switch and focusing on "What’s in it for them", and knowing how to do that without manipulation, gets you to what you want faster, with ease and without rejection.So many people are afraid to give away their ideas before a purchase is made or a contract is signed. But often that's the best way to win the business. What would you do for a customer that you'd never think about doing for a prospect? Are you holding back something because you're afraid they'll steal it? Are you approaching your meetings as a chance to really "strut your stuff" or are you getting to work? For many sellers, this is a new concept. Think about how you can be more forthcoming-even before you start working together. It's worth it.Break.....10 minutes
- It is a competitive world out there, and retailing is tough. Demonstrate how your product can help the retailer grow in revenue, improve his product category, increase customer traffic and repeat purchases, and even a merchandising and/or marketing tip. Then pitch, pitch, pitch, away! When you figure out what the buyer wants and then provide it for them, you don’t have to sell. They buy.
- You should be able to tell me this when we meet. But don’t necessarily take it as an objection. Retailers are competitors; they want to know who else sells your products.Most retailers want to know that you’re successfully selling your product elsewhere – even if it is on a small level.They want to know...What makes it sell? Is it the merchandising, the concept of the product, the retail price or what ???? What problem does it solve for my customers? Is there a market match? A match to my marketing mix.Beware the myth of being different and unique. Being unlike anything else on my shelf is not enough.Being different and unique; doesn't equal desirable; and desire is what moves the customer.Desire…means that people want it and need it and can use it and can afford it and are willing to buy it; RIGHT NOW.There are lots of examples of products in an existing category that are not unique and different but they are better on at least one value. That usually creates desire in the end consumers view and they’ll want to try it.
- The key to business success has always been the same; find a need and fill it.However, your business goal is to find out what people (retail buyers and end consumers) really need and WANT (what they desire), and then give it to them better and faster than anyone else.Because, a need alone does not = a market. Desire does. And desire is where the market is.If you have an item that is both a need and market; you have what is called a “pull” product. Magic combo!If I have to help you create a market; that’s a push product; I’ll expect a better price (or terms of payment) to help you move your product.
- Retailers always assess if you have a push or pull product? This especially is the case with new products or product categories.Am I going to have to help you push the product in my market? Or will there be consumer demand (a pull product)?Barrier to entry can be many things; competition; yours and mine and may include internal issues for the retailers.Future proof; will your product (or category) be around in a month? In a year? Is it a long term or short term product? (length of life cycle). I.e.;Is it seasonal or year round?All new products progress through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.
- This is only a partial list; add TV advertising, coupon drops and other traditional marketing initiatives by mfrs. Anything that creates awareness with consumers and instigates the desire to try it.In every meeting, have retail ready samples to demonstrate; and if your product is electronic don’t forget batteries. A buyer cannot make a final decision to purchase a product that is a rough prototype or is incomplete.In the end…all buyers do things for their own reasons, not the sellers' reasons. What are the applied benefits of the benefit for their customers?
- Also, what does the product do or how does it work? = value; my staff need to understand the value proposition; often they become the seller of your product with my customers; make it simple so they can explain it.What’s your plan to educate my staff, especially if it’s a more complex product? Will the retail price point of this item be in the range of what my customers will spend?
- They want to know how your product will improve their profit margin for the category and ultimately their store.Will this item make my store more appealing; keep my customers in the store longer, create an impulse purchase and an incremental sale.I’m looking for new mix to increase the average sale and add profitability to the average basket. Not displace or replace products I already have that are selling.And new items are often the key to bigger customer baskets.Average basket = Average sale and is a key metric; Avg. Sale= total sales/customer count @ the till (not traffic rather transactions)
- Can I sell this in my market; at the retail I need; to make money?Looking at product first; probably not competitive and therefore the thinking is; what can I get for this?When looking at cost first; it is to judge the selling price; the thinking might be; it is a competitive item and needs to be priced to move; how much room do I have or...“I need a product that will fit into this price point and category”; i.e. under ten dollars; under twenty and so on. I.e. Dollar stores.Examine your product cost mix carefully; in addition to the normal “cost of goods” you must include all your expenses incurred in delivering your product to the retailers door.Including R&D, promo, sales & marketing costs, installation, CS, product service, returns, and so on.That’s my “landed” cost and I set my retail from that.How retail prices are set is critical to your Sales & Marketing Plan. So, You gotta know your numbers! (Emphasize this)
- Merchandising is an art form and after setting the retail pricing, the process of retail merchandising moves on to the task known as setup and display. This process is concerned with displaying the goods within the retail setting to the best advantage.In every meeting with a prospect, have your pricing prepared – wholesale and suggested retail pricing that allows you and the retailer to earn substantial profits.Pricing deserves attention from your perspective and the retailers; it is a combination of art and science and starts with knowing your competition.
- This slide is from your (supplier) perspective. Negotiate the price you deserve; I have more respect for someone who says no; “can’t do it at that price”. Make the other negotiator work for their concessions. Saying yes right away only leads to disaster. Say no at first and then perhaps later you can say yes. The buyer will be more satisfied simply because you had the courage to say no. Negotiate; If you will do… then I will do... That way each party gains.HST conversion back to PST/GST commentary. Understand the taxes and impact if any on your cost price and the final shelf retail. Also consider the final price including tax paid by consumers.Wholesale upcharges vary and are part of the landed cost of goods from a retailers perspective.Brokers will ask for a royalty or a % of sales; factor this into your COG’sInclude all your costs; Calculate and include things like shipping, packaging, cost of replacing damages, etcIMPORTERS-Is your product vulnerable to currency fluctuations? What are the Import tariffs?
- Since the retail shelf price is a prime consideration. Know your basic retail math and make certain you and the retailer are talking the same language.To price products, you need to get familiar with pricing structures, especially the difference between margin and markup.Mark up is % of profit on cost and margin is % of profit on selling price.Markup and (gross-profit) margin on a single product, or group of products, are often confused. The reason for this is that when expressed as a percentage, margin is always figured as a percentage of the selling price, while markup is traditionally figured as a percentage of the seller's cost.Also, GM% sometimes referred to as GP%. All of these terms can get confusing in the conversation. I suggest that you talk dollars and cents; cuz nothing else matters. They’ll figure out their percent from there. End of the day...I take this to the bank not percentages. And if they can’t figure out the percentage; now that you know how to do it; you can teach them. You’ve just added value.Refer and use the handout for further explanation.
- Understanding the retail merchandising environment is critical.Chain retailers might ask for anti theft tags to be installed inside the packaging at your cost.Or require “clam shell” hard plastic packaging. Theft & Loss prevention.Retailers like the idea of a customized package that suits their consumers and is displayed properly.From a product packaging standpoint, be prepared to show exactly how the product engages the consumer in making a purchasing decision at the shelf or point of decision to buy.Off shelf areas retailers use for merchandising new mix include; ends, profit panels, clip strips, floor pre-packs and spinner racks.Does your product fit on any shelf? If not; it’s gonna be merchandised on the bottom or top shelf or out of section. Which can be “Death Valley” for your product.
- Chainsmore than IND practice sophisticated category management; they will require this stuffChain merchandising is compliant to POG’S. Explain POG’s. IND’s more flexible.POG’s include package size and photographs. Chain retailers expect you to provide them.Having a clear, well defined packaging concept with a visible UPC is crucial. If the UPC is added after (as a sticker) it must stay on the package.Show a sample of both your product and its packaging, including a barcode and pricing. Packaging is of huge importance to buyers--your product's packaging should take its cue from things already on the store's shelves and racks.Demonstrate how the retail footprint for your product packaging is effective and worthy of shelf space. i.e. 12 packs of soda pop can be stacked 4 different ways, books can be cover or spine, Show how your packaging has the right "benefits" for a prospective consumer. I.e. wine boxes, re-sealable confection products, cling wrap refills.
- Logistics means how will you get your product to the receiving door of the store. It is better known as the supply chain and refers to the transfer and transport of your products.The Retail distribution channel usually refers to the main retail category and type of store.
- These are the 3 main logistics and supply chain channels; or methods of getting your product to the retailers door.Wholesalers are intermediaries between suppliers and retailers. They are a distribution point and sometimes take title to the inventory.DSD is when a supplier ships directly to the retailer’s door. Sometimes could be a ‘drop ship’ billed through a wholesaler.Explain “self distributors”, chain’s usually own their own distribution centres.Consider and decide your supply chain logistics and what method you will use. What is the cost to you to ship?However decide your logistics after you’ve decided your “ideal” customer.
- Look for the right store. A search for the best retailer for your product starts with you browsing stores for similar or related products. Spendsome time in local retail stores to see what's on the shelves. Picture where in the store your product would sit on the shelf, and keep that in mind when it comes time to approach the store's buyer and make your presentation.Likely your product will fit into one or more of these channels. These are retail industry sub-categories; Your potential customers generally fall into one of six categories;ExamplesThe Bay, Sears, Army & NavyZellers, Target, Wal-Mart, Costco, Home Depot, The Brick Micheals, Indigo Books &Music, and Dollar StoresThe Shopping network; E-bay; Amazon; ZapposSafeway, Save-On Foods; London Drugs, ShoppersC-store; ie. 7-11, Macs, Town Pantry, Esso-On the Run, Petro Canada; all serviced by the same wholesaler; Core-Mark
- Within each category there are basically 3 types.Chains i.e.. Future Shop, Starbucks, Cdn Tire, SDM; explain the difference between chain, banner and IND’s;Pharmasave, Home Hardware are banners. Waves Coffee, IRLY Building Centres, Peoples Drug Mart (even though a banner; they are ‘pure’ IND), Gerry’s Gifts, (your name) Toy’s etc. etc.The point here is; whether you choose Chain, banner or IND, there are potentially lots of retailers to focus on within categories. Who exactly is your ideal customer?Another way to ask this question is, who is the retailer and why will they buy from you? Pick your customercarefully; i.e. WalMart, RCSS, SDM- do you really want to be there? Why?Pick one channel and one type and work it.
- Will the box and/or product scan? (refer to slide)Can it stand up to wear and tear? Being dropped.Strong box and quality of cardboard?Comment on concealed damages. (hassle)Retailers tend to avoid large master case packs on new items.Does the large case pack have inner packs or shrink wrapped smaller MOM’s?A smaller MOM might help you overcome objections to larger quantity master case packs and an easier sell for trial on the first purchase. Reduce the risk of a large quantity. Which is value to the buyer.Generally by cube and weight; shipping charges are determined by a complex cube and weight calculation and the destination.
- Agents (sometimes called brokers) are also intermediaries who work between suppliers and retailers (or in B2B channels), but their agreements are different, in that they do not take ownership of the products they sell. They are independent sales representatives who typically work on commission based on sales volume, and they can sell to wholesalers as well as retailers. In B2B arrangements, this means they sell to distributors and end users.Called a Professional Agent or Brokers fee, could be a royalty or % of sales. Wholesalers upcharge; typically a % of your cost and add it to the cost.The cost may be worth it for you, since they have the connections and can get referrals that may help you engineer an initial success storyor testimonial.If you get a professional agent, broker or wholesaler make sure they really understand your biz.
- If you aren't prepared, you aren't credible. In fact, then you're just like every other self-serving salesperson. Make sure every meeting with you is well worth the retailers time. They want to know what marketing plans you have for your product. It is important to talk about all advertising campaigns, Social Media Plans, Co-Op Advertising Partners, Upcoming Interviews, Articles, Blogs, Tweets, TV/Cable Promotions, Coupons, and who your consumer base is. It is also a great selling tool if you can cross promote your product with an existing line or demonstrate how your product is an Add-On-Sale. I merchandised pocket pack and large boxes of facial tissue next to the cough and cold section . That merchandising idea helped improve the profit margin for that area of the store. Prepare a sales and marketing plan, understand the market, your product and demonstrate the “market match”.Let’s look at some additional items from your perspective;to consider for your sales and marketing plan.
- Often in no hurry to pay you.All retailers run their businesses on supplier credit. It’s an effective use of leveraging cash flow.Consider providing incentives.Like additional dating on the initial purchase.Prompt payment discount; or “cash discount” incentive for early payment. I.e. 2% 10 days, net 30.Some IND retailers like to pay by credit card; you need to consider your cost (merchant fees are a % of your sale). Frame this as a convenience fee.What is your risk tolerance? What if the retailer says your product isn’t selling and tells you to come pick it up.
- Chain retailers will bleed you dry for money to place your product on their shelves/sales floor. “Real Estate” game.However, Chain retailers will get you on the shelf at multiple locations and give your product instant exposure. Chain will ask for pre-paid shipments: Get your product to my door at your cost.I expect you to take care of damages and returns either by credit note or replacement.No matter how good your quality control processes are, you can’t fully avoid the threat of a product recall. The key to surviving the crisis is to create a recall management plan in place before the worst happens. Having a plan for recall is critical especially with food products. If there is a problem a recall situation could not only sink you but cost you dearly. I.e. reputation, relationship etc.Most chain retailers will require you to sign a vendor agreement. Links to examples provided in the resources.
- Google for wholesale distributors names, contacts and locations. Most have the ability to ship destination points outside of the lower mainland. Use SBBC resources or links provided in resources.Who are you more likely to buy from? A total stranger who shows up at your door or phones you – or someone recommended by a friend? That’s the power of referrals. Always ask a satisfied customer who else might be interested in benefitting from your product or service?A referral is sending someone you care about to someone you trust.The value in a short term incentive i.e. Same concept on as seen on TV; shopping network; to new customers I’m offering... Or consider offering exclusivity in a certain area or postal code for a period of time.If you decide to become the retailer; then start with www.internetretailer.comStay current and learn how to use all the new social media technologies as part of your marketing strategy; using twitter, Facebook, your personal blog, and you tube, etc. To get your product noticed out there. Carefully consider consignment arrangements. Not advised. It devalues your product if you don’t invoice. With POS you get paid only what they sell not including theft. Does work for some; i.e. Artists, test markets. Put a time limit on it.
- In fact some chains have people living in China for example and that’s all they do is seek out new mix.They could use your offshore contact to cut you out by going around you.Be careful the chains can be and are cutthroat. They won’t loose a minute of sleep cutting you out. So be CAREFUL what info and contacts you share.
- Consider the order of these motivating factors from a recent study; relationships are 2 of top 3 and they are perceived benefits.So often, people assume ‘price’ is the only way to compete but it’s usually not the most important.Position yourself in everything you say and do as the most credible and believable supplier of your product or service to your ideal customer.Then back that up with value up front; not “value added” after the sale.“Value added” is nothing but a promotion if not done up front.Give value first, don’t add it later.
- There are four basic ‘currencies’ in all peoples lives that are motivators, which create desire and value.When you understand the 4 “currencies” in peoples lives, there are 100’s of ways to compete and WIN.To the extent that you...Understand the retailers stress better than your competitors; then make it go away better than your competitors; and by fulfilling the retailers real intention to buy products for resale.And then communicate that powerful message effectively; ...you will become their preferred supplier!
- The approach to IND’s and Banners is different than approach to chain; Chain is a longer selling cycle; IND and Banner is shorter. Chain is a big bang; IND and Banner is a smaller pop.Chain retailers are looking for unique niche products because they like to act like small retailers to differentiate themselves from other chains. IND’s look for products not in the chain stores because they don’t like to compete on price.However, for adding new mix; both types have challenges; Large retailers have big overheads and move slow; small retail have issues with access to capital for inventory and cash flow.Although, small IND retail seems to have the advantage right now because they can move fast on new mix. With most IND’s and banner; you could deliver product on the spot.Right now; IND retailers just simply want to buy smaller quantities more often and they want new product mix to differentiate themselves from chain.If you can solve the IND challenge of buying less more often; you will differentiate yourself from your competition. This is value.
- There are some buyers who will take a chance on a product even though it has no sales history....AND ...buyers need to consider new and innovative products. How do I bring new customers to my store? This is particularly true for smaller retailers if there is nothing else like your product in the marketplace. During the last two years; all retailers have been facing flat sales.Flat sales is OK; cuz it means at least I’m keeping what I’ve got; now how do I put more in my customers basket?So right now retailers are looking for “local”, new or imported products to add to their mix to keep their customers engaged and in the store longer to increase the average sale. And profit. Especially products that appeal to the “treasure hunt” for consumers and products that support the local economy.
- Who do you want to approach? (focus on one or the other).The dominant relationship at chain retail is with brand suppliers. The dominant relationship at IND and banner is with independent suppliers and wholesalers. Since, all chain retailers practice some form of Category Management it’s tough to crack the ‘line up’; so you ought to have a market demand product with proven sales history in some market in a similar type of store.Today, chain retailers rarely consider a product that hasn’t been tested and proven in a local market small retailer. However there are exceptions.Depending on your product; I suggest; start with small IND or Banner first to build a local market; then go to chain retailers.Once you’ve determined your retail channel; (Ind’s, chain or banner) then decide how you will get your product to your customers door?Figure out what it will cost...can you make money? Otherwise what’s the point.
- The strategic marketing plan is probably the most important document you will create throughout your marketing efforts. It establishes a roadmap for your sales and marketing planning, to maximize your resources. It quite simply is a must do. Start a simple Sales & Marketing Plan as a blueprint.Who is your ideal CONSUMER; Who is your ideal customer? What motivates them? Where do consumers buy your type of product? Why do they need it or use it? Why should the business come to you rather than someone else?Ask questions. Relationship selling is the core of all modern selling strategies, the relationship with your customer often becomes more important than the product or price. Resist the temptation to leap to solutions too quickly.Focus on building a high quality trusted relationship with your customer by understanding their situation and treating them so well that they call you, buy again and refer you to others.Avoid the trap of overselling and leaping to solutions; don’t over do it. Watch for buying signals; and “Don’t push on an open door.”
- The market place is ever changing and evolving. Continuously evaluate and re-evaluate your value proposition so it keeps up with a quick changing world and stays real current. Ask yourself: “Why should my ideal prospect (the group you intend to serve) buy from me instead of a competitor?” Focus your value proposition on benefits not just features. Consider the applied benefits of the benefit.Your UVP should include what you bring to the table.Remember value is the bundle of perceivedbenefits offered at a given price.This is not easy to identify and articulate; so keep working on it. Plan, Execute, Learn, Adjust, then Go Back to Execute.
- Do you see the difficulty in the opportunity or the opportunity in the difficulty?There are stumbling blocks and lots to consider but no matter what…Retailers are always looking for new products to differentiate, add ‘excitement’ to their stores, drive traffic, create an impulse sale and add profit to their average sale.Large or small, chain or IND, the profit opportunity exists for every type of retailer that has exciting product and delivers a real focused experience with new and localized mix to their customers.All retailers tend to work in the biz rather than on the biz...They need you to help them find the products and then help them “move” the inventory. This your opportunity.
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