Survival of the Fittest in 3 Tier Beverage Alcohol Sales

Anyone with a CPG background or advanced marketing degree can tell you all about the 4 P’s, but the sales executives and managers leading teams in the beverage alcohol space have a different background. They have largely been educated through on the job training and real field experience, myself included.

Common and standard sales practices in the industry are often short sighted strategies, including harmfully deep quantity discounts affecting margin and retail price points, and sales rep incentives that reward meaningless, unsustainable distribution resulting in wasted investment and sales rep time.

I believe there is a better way to sell that is eluding many in the industry, even to this day. The more progressive and advanced organizations have deployed a different sales methodology focused on the “leading indicators” of sales, the sales drivers. They put a methodology and supporting tools in place to execute at retail more strategically and with more precision, optimizing sales results with higher ROI of time, trade spend and rep compensation while delivering sustainable volume and better margins.

As the industry has grown up, there is an obvious adoption curve toward a focus on leading indicators across both the distributor and supplier landscape, with correlating performance improvements. Unless a company has one of those magic brands that consumers have jumped on (Tito’s!), the only way to improve sales is to out execute your competition.

 

When it comes to improving sales execution it’s easy to identify the right leading indicators to focus on without hiring a team of consultants with MBAs. In fact, it’s quite simple! Start by defining how to evaluate a sales rep. Here is my stab at it.

1. Reps with highest margins
2. Reps with consistent volume over time
3. Reps with a solid group of high performing “key accounts”

So, show me your best sales person and I will show you the one who has:

1. Distribution of the right brands in the right accounts
2. High reorder rates
3. The most Displays, Cocktail Menu features, By the Glass placements, Tap Handles, Coldbox placements and other brand visibility drivers in key accounts
4. And has executed the most tastings, staff trainings and other consumer activation activities in key accounts

By executing against a well conceived strategic roadmap to avoid low value work and focus on the high value stuff, the best reps deliver more value.

 

Easier said than done, with a large portfolio of products, lots of accounts and only 24 hrs in a day. Companies need to ask themselves, “what are we asking our reps to do”, and “how do reps manage their work to be most productive”? The trick is to keep it simple and follow the methodology of goaling reps on the leading indicators of success.

1. Secure distribution of the right brands in the right accounts
2. Secure menus, displays, tap handles, etc. for the right brands in the right accounts
3. Execute staff trainings, tastings and promo events for the right brands in the right accounts

If you don’t have a sales execution solution in place that will not only enable smart goal setting, but also a mobile app for reps to use in the field and embedded reporting against all of it, you will likely be spending lots of time on administrative tasks like creating and emailing spreadsheets, guessing how the results are effecting sales and overall wasting lots of time across the entire organization. Not only will you be executing at a sub par level, you will be wasting money on non selling activities.

Remember, the one thing all sales teams have in common is we all have only 24 hours in a day. It’s survival of the fittest in this hyper competitive market, so what makes one organization better than another? Execution. To maximize your execution, and win the game, you need the right methodology and the right tools.