Follow the foot traffic: using data to pinpoint wine and spirits sales opportunities
Combining the 80/20 rule with key data points from various online sources, wine and spirits brands can identify high-traffic accounts representing the best wine and spirits sales opportunities.
Trust the data to guide your sales strategy!
There is a perfect correlation between a restaurant or retailer’s foot traffic and the amount of wine/spirits it purchases.
Thanks to the internet, plenty of data can be mined to pursue the key accounts to target in any market.
Creating a key account target list should not be done “intuitively” or by asking around. By focusing on concrete, empirical data, anyone can identify the richest accounts.
This is a fish-where-the-fish-are strategy; the data will tell you exactly where to fish.
Understanding the 80/20 Rule in Sales
Also known as the Pareto Principle, the 80/20 Rule states that 20% of the accounts will drive 80% of the sales.
For this to work correctly, one must focus on the potential an account holds.
The 80/20 Rule is often misunderstood or applied too broadly.
It is true that the “80” and the “20” aren’t always precise, and the actual ratio can vary. But the principle is absolutely true.
If you are one of those skeptics who believe that the 80/20 rule is not always applicable, you may want to consider a more simplistic theory that is very difficult to argue:
Not all accounts are equal.
Let’s take “volume” as an example. Some accounts purchase dozens of cases of wine per month, and others buy HUNDREDS per month.
Why would you want to avoid taking the time to learn which accounts fall into the higher-volume category?
Volume is a mission-critical KPI for wine companies because their ability to adjust production up or down is far less flexible than spirits or beer due to being tied to vineyard and grape contracts.
Consistently (and profitably) achieving volume goals also contributes directly to your revenue goals. Therefore, it is foolhardy not to focus on the accounts that can deliver the desired volume.
The single biggest challenge in sales
Managing time and resources effectively is the biggest challenge in sales success.
Identifying the top-performing accounts in each market can maximize your efforts, time, headcount, and budgets.
“Measure twice, cut once” is an apt approach. It is worth spending a little extra time gathering and analyzing the data to identify the best opportunities that will pay off in the long run.
Left to their own devices, salespeople will not typically do this on their own. They tend to favor a more-is-more approach to their territory. They believe that to sell more, you must make more sales calls, and this is a fatal mistake because it presupposes that all accounts are equal, and they most certainly are not.
“Hard data” beats “gut instinct” every time
Most salespeople use “feel” and intuition when selecting the accounts to call on.
If no data were available, this approach would be understandable. But the data is abundant (if you know where to look).
However, the type of data that is the most valuable is objective data.
Gut instinct is subjective. Empirical data is objective.
Here is a classic example:
When researching accounts on Yelp, the default is “Recommended,” meaning the rating (expressed in “stars” from one to five stars). This metric is highly subjective and will not tell you anything about how busy or popular the restaurant is.
But if you switch the sort to “Most Reviewed,” you now have a completely objective metric that can help you identify high volume.
According to Yelp, a restaurant needs at least 50 reviews before it claims the ratings are accurate. Why not 500 reviews? The answer is that very few restaurants receive that many reviews.
So, if an account like Taste of Texas in Houston has over 4,000 reviews, it is probably a bustling place serving thousands per week. You can be confident that you have found an account capable of purchasing serious amounts of wine and spirits!
Is Yelp the only source of this “empirical” data? Certainly not. Sticking with the Taste of Texas example, we can see that this account has nearly 9,000 reviews on Google.
From a sales perspective, the number of stars an account has is almost meaningless compared to the total number of reviews.
In the world of statistics, the number of Yelp and Google reviews is reliable because it is “surrogate data.” This type of data can be used to support a hypothesis, such as restaurants with far more reviews than the average serving far more people.
Key data points to identify busy restaurants
As mentioned above, the number of Yelp and Google reviews is a reliable data point that demonstrates an account’s volume potential. But what are some other easily accessible data points to use?
- Private Dining Rooms
- Outdoor Seating
- Reservation Availability
- Proximity to the City Center
Let’s dive more into two of these:
Private events such as corporate meetings, weddings, or celebrations tend to have higher spending than typical walk-in diners.
According to Open Table, restaurants with private dining options can see 40% higher per-guest spending for private events driven by prix-fixe menus, alcohol purchases, and service charges.
The National Restaurant Association says the average check size at group dining events is 10-20% higher than that at regular dining.
If these statistics aren’t convincing enough, consider that Restaurant Business Management reports that restaurants with private dining spaces report 25-30% of their annual revenues come from private dining and events due to the higher utilization of space (even in slower times).
A similar case can be made for restaurants with outdoor seating.
Outdoor seating expands a restaurant’s seating capacity, allowing more guests to dine during peak times without needing larger indoor space.
According to the National Restaurant Association, restaurants with outdoor seating can increase their total seating capacity by up to 30% or more. This leads to higher sales (particularly in temperate climates during spring and summer).
If you weren’t reading carefully, you could easily earn increases of 10, 20, 30, and 40% just by narrowing your focus to the right types of accounts.
How to combine data with the 80/20 Rule
“Following the foot traffic” is easier than ever, thanks to the data and the understanding of how to leverage it.
And “LEVERAGE” is an essential word here.
We are discussing the strategic use of data to gain insights that provide an advantage.
If you want to improve your sales, you need two things:
- Acceptance that the 80/20 Rule is real
- Data from reliable sources
By combining the use of empirical data with the belief in the reliability of the 80/20 Rule is a powerful strategy for increasing sales potential.
Here’s how this approach works:
- Identifying the highest-value accounts
- Optimizing resource allocation
- Refining your sales and marketing strategy
- Improving your product offerings
- Enhancing customer retention and loyalty
- Predicting future sales trends
- Minimizing (or eliminating) sales efforts on low-return accounts
- Maximizing the potential sales opportunities
Given the highly competitive nature of our industry and the severe headwinds we all face, it makes sense to adopt the strategy of “following the foot traffic!”
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