Fail Faster: Marketing Principles for 3 Tier Sales Success
3-Tier sales are notoriously difficult because the outcome of one’s efforts in the market is so rarely obvious. Combine beverage alcohol’s “game of telephone” route to market with a long sales cycle, and explaining why anyone’s sales are up or down is like slapping around the shorebreak for a pair of lost sunglasses. Every wasted sales and marketing dollar has a pointed story to tell, and yet up-to-date visibility into the right KPIs has — until recently — proven difficult to access.
Fortunately for sales leaders and analysts, sales execution and trade promotion management (TPM) tools have made it possible to attribute lift to specific activities on and off premise. Suppliers and distributors are already leveraging visibility into shared, near-real-time data to evaluate the efficacy of various placements and promotions across key accounts.
Unfortunately, what used to be a competitive advantage is quickly becoming a mere prerequisite for survival. Interpretation and analysis of data — and the agility to respond accordingly — are the must-have sales leadership skills that will define the beverage alcohol landscape in 2025 and beyond.
To Accelerate Learning, Fail Faster
Who better to teach these skills than our close collaborators and friends in the marketing department? While the 3-tier sales cycle is prohibitively long for developing fluency in the language of data, marketers experience a definitive “yes” or “no” in the ads dashboard daily.
Marketers live and die by the iterative process, deploying (and continually adjusting) a certain percentage of their total budget based on their audience’s reaction to any given piece of content. While 3-tier sales demand a different type of “listening,” the basic principles of data-driven resource allocation matter just as much – if not more – under the limitations of B2B bureaucracy, where a thoughtful pause is warranted before letting go of any given chess piece.
With applications for 3-tier sales in mind, let’s (re)visit the following basic principles that marketers use to optimize their budget for maximum impact.
The only way to know if something works is to try it out.
You can’t analyze data that doesn’t exist. The way to generate more data is to, well — try stuff out. Throw some spaghetti against the cabinets. FAFO, as the kids say — though we’ll go with the G-rated version, “Fail and Find Out.”.
I don’t care what your agency says — at least ½ of marketing is a socially acceptable form of gambling. Ad agencies love to prattle on about their “data-driven approach,” but what they don’t advertise to the client is that this game of trial and error begins — by necessity — with the act of surrendering their best guess to chance.
This doesn’t mean that marketing is not scientific or data-driven; literal scientists learn more about the world by developing a hypothesis and testing it out in a controlled/defined environment, not knowing what results await. Marketing is simply a messaging experiment conducted within the strict confines of a defined audience.
Your product, whether it be wine, spirits, or ranch dressing — is a hypothesis, a bet on a demand in the market. Every placement your team makes in a retail account (in)validates your hypothesis — namely, that the retailer’s customers want your product right now.
Many of us feel pretty confident we know how any given decision is going to pan out.. “If my boss would just give my ideas a chance,” we often mourn internally, “ — if my team would try it this way, we wouldn’t be stuck in this position.”
That may very well be true on occasion, but a humbling experience that every marketer confronts routinely is the frequent (sometimes spectacular) failure of their own ideas, reflected as irrefutable evidence in their analytics, comments sections, product reviews, and more.. A social media manager might spend an hour writing a beautiful caption, only to receive 7 Instagram likes, then turn around the next day and post a haphazard sunset pic to a resounding 211 engagements and 12 shares.
One reason new brands struggle to get off the ground is that there’s very little (if any) historical data to base an educated guess on. “Does my product tend to sell better in stadiums and outdoor amphitheaters or intimate indoor venues? Dive bars or speakeasies? Independents or chains? Do most customers drink it neat or in cocktails? With their meal or before/after a meal? During happy hour, or for special occasions like an anniversary?”
This is why a process called “A/B testing” or “split testing” is enshrined as a way of life for digital marketers and savvy sales leaders alike.
Split (A/B) Testing
In keeping with the scientific method, the only way to be certain you’re deriving a meaningful insight from testing something out is to change only one variable at a time, and control everything else.
A DTC manager might split test two different subject lines for the same exact email campaign aimed at the same audience, sent at the same time of day, or aim the same Facebook ad at the same audience during the same timeframe with only image A and image B running against one another. Something as simple as a “Learn More” call-to-action button vs. “Shop Now” can make a drastic difference in metrics like Cost per Lead, Cost per Link Click and even Cost per Purchase.
If you’re trying to determine whether the same sparkling wine performs better chilled or on an end-cap display in the same store at the same price point on the same day, that’s a pretty solid experiment. If, on the other hand, you were trying to decide if that SKU sells better in a boutique bottle shop or a big box store but it’s priced lower in the big box store, you won’t know why it sold better at either account. Was it the part of town the store is in, the price point, the shelf placement, the sales associate working the floor that day?
Sure, variables are harder to control in the real-world environment of 3-tier compared to the relative terrarium environment marketers enjoy, but asking yourself questions with this level of detail in mind has the potential to completely change your team’s approach in the market. By simply being aware of changes in location, seasonality, and the nuances of every account you sell to, you actually have a hope of piecing together a story about why something is or isn’t working, and adjusting your future strategy accordingly.
You can split test anything: different SKUs in the same menu placement, one SKU’s performance in different account types, packaging, enclosures, large format vs 750’s vs.375’s, half cases vs. full case orders, label designs, price points, etc. — just make sure you’re asking the right questions for the problem you’re trying to solve.
In this phase, keep the budget conservative and at the threshold where you’re spending just enough money to ensure that your sample group, or the data that you’re gathering, is large enough to answer your questions beyond a reasonable doubt. Save the bulk of your budget for the next step, when you’ve “found a winner,” so to speak — accounts that have a demonstrated history of high ROI under the test conditions.
Turn off or eliminate channels that are underperforming. When something is working, double down on it.
Experienced marketers know that in order to achieve consistent success, they must let the audience decide (through their actions, as demonstrated in the KPIs) on their favorite piece of content, and then go and create more of that type of content – double down on what’s already working.
That’s the point of the initial investment in all this split testing. Paid fishing guides don’t transport clients to the middle of the lake at random and hope for the best; they’ve invested the time up front to find the very best, most reliable spots, lures/bait, and times of day for their quarry.
While costly up front, a PPC advertiser may try ten different campaigns over the course of several years before one of them really “hits,” and when it does, it outperforms all the rest by a landslide in true 80/20 rule fashion.
Similarly, looking at your account universe from a big picture perspective, a small handful of your accounts sold are likely driving the bulk of your case volume. By identifying common characteristics between your highest performing accounts, you can develop an ideal customer persona and begin to focus your team’s efforts on selling to more accounts like those.
It doesn’t matter if you’re in 40 accounts in Orlando if only 5 of them re-order every month. To drive maximum volume, decrease the amount of time your team spends calling on the 35 low quality accounts and use that newly freed bandwidth to nurture your relationship with those 5 key decision makers and increase the quality of your distribution.
According to one of the oldest and most seasoned email marketing tools, Constant Contact, repeat customers spend 67 percent more than new customers. They cost fewer resources to sell to and purchase more when they do order. When something is working and you have a clear indicator that the return on investment is going to be worth your limited resources, it’s time to commit to a disciplined approach, even at the expense of your unsold universe.
Your Product is Not for Everyone.
This is one of those polarizing limitations that, once accepted, frees you from fear of missing out, scope creep, and scattered resource allocation.
If your brand is for everyone, then it is for no one. If your premium tequila is for a mindful, craft-oriented, affluent drinker, it is by definition not for college freshmen seeking 2-for-1 house margaritas. Your Barolo is probably not destined for every Irish pub in Los Angeles. No matter how good your canned cabernet sauvignon is, nobody is pulling it out of their cellar 10 years later, cracking it open, and telling their friends about the vintage..
By choosing to speak to a narrow, defined audience, you empower yourself to grow a loyal following and develop evangelists for your brand.
Minesweeper: A Masterclass in Disguise
While an employee might not succeed in resuscitating a negative performance review by owning their mistakes under the banner of “tuition,” the experimental process that leads to informed decision-making in sales and marketing begins like a game of Minesweeper.
There is no choice but to start somewhere. Blowing up and making mistakes is an inevitable and indispensable step to visualizing the path forward. Given enough time, however, the game becomes increasingly less random, the mistakes fewer and farther between, and stealing a page from the data-driven marketer’s playbook may deliver enough fresh perspective to help minimize costly mistakes in the long term for the sales leader looking to get moving in an increasingly competitive beverage alcohol market.
