8 Things you do not say to a supermarket buyer when launching a new product.

Mar 16, 2015 | Branding, Customers, Innovation, Marketing, retail, Sales

Words spoken cannot be taken back

Words spoken cannot be taken back

Gaining distribution in supermarkets is really hard, and more to the point, expensive.

Supermarkets control the key  “choke point” between you as a supplier, and consumers. On occasions when you are pitching a “me too” product, a decision just comes down to the retailer margin and the amount of promotional and advertising dollars that are being thrown at the launch, which both reassures the buyer that you are committed, and offers some confidence that consumers may be receptive. Generally with a “me too” product, you need to be prepared to take something out of your own range to make space, or be able to pinpoint with data an under-performing competitors product that can be deleted.

New products are usually a bit more complicated. For a retailer to put a new product on shelf, in addition to their existing ranges, it is often more than just a simple one in one out decision, particularly if the new product claims to be opening up a new category or subcategory.

In either case, the simple fact is that retailer stores do not have elastic walls, and space needs to be made somehow.

Over the years, I have launched many new products, some category creating products that have been a huge success, and some not so much, and many line extensions of various kinds. However, in the launching of them, I have done hundreds, if not thousands of presentations to supermarket buyers, and found a number of things that should not be said of you are to be successful.

It really is important to recognise that even though you may think your new product is the best thing since sliced bread, supermarket buyers see hundreds a year, and have heard it all before, so your presentation must be sympathetic to that simple fact.

Some of the wrong things to say which have come out of long experience are:

  1. “Our research says that this product will increase the total size of the mart by $50 million in three years”. You both know that research is usually rubbish, and that everyone lies to supermarket buyers about theirs. If you cannot support the research claims with very solid data, just be honest about it, recognising that even supermarkets buyers cannot tell the future, and be realistic.
  2. “Our sales forecasts are conservative” See above, and the truth is that the forecasts are usually these days just spreadsheets with autofill, and are really meaningless. Speak more about the assumptions that are the foundation of the numbers rather than the numbers themselves.
  3. “You are the only chain that has yet to confirm their acceptance and promotional program for this product“. Nonsense. While someone is always last, it will not usually be one of the big retailers. They know you need them more than they need you, so better to honest, although being desperate is also the wrong tactic.
  4. “XY company, the current category leader is too slow and locked into their ways to react quickly, so we will have this new segment to ourselves for a long period”. Big companies do not  usually get big by being stupid, they may be a bit slower than the small guys, but they do know their stuff, and can move quickly when necessary. A buyer will see your confidence as misplaced, and react accordingly.
  5. “ABC Co do not have the will to risk their cosy positon by innovating” or some similar comment. Denigrating a competitor is a common fault, and should never be done, you just might be denigrating the people who give the buyer his most profitable products, and he will  not take kindly to having his stocking decisions being questioned.
  6. “This product has been protected by patent” More rubbish. Only very few companies have the resources to develop something genuinely new, patent it, then be prepared to spend the megabucks to protect the patent. The last one I can remember is the Nestles cappuccino product in a pouch, a genuine innovation that gave them just a small amount of time before the copy cats arrived. If Nestles cannot so it, you almost certainly cannot, and the buyer knows it, so do not kid yourself.
  7. “We have first mover advantage“. This is sometimes true, but is may not worth all that much unless there are long lead times involved in equipment. When a new product can be made on existing plant, you cannot usually count on more than about 12 weeks start, after which the copy cats can arrive, correct any mistakes you have made, and capitalise on your investment with consumers to open up the new category. Sometimes it is better to be second mover, and step over the carcass of the pioneer, who gets the arrows in his back. Having said all that, First mover in a genuine innovation does give you a good chance at distribution.
  8. “Our plant is state of the art“. Retailers do not care much about your plant, so long as their orders are filled, the product is safe for consumers, and moves quickly off their shelves.

There are 40 years experience in these points, some of it painful, but there is no greater (commercial) feeling than seeing a product you have conceived, developed and successfully launched still on the shelves 20 years later, still meeting consumers needs and delivering profits to all concerned.

The 9 imperatives for small businesses when building a brand.

Feb 17, 2015 | Branding, Customers, Marketing, Small business

 

 

Build your brand on solid foundations if you want it to last.

Build your brand on solid foundations if you want it to last.

This is the fourth on the series focusing on how to beat the supermarket gorillas at their own game, by building a brand that has a loyal and evangelistic group of customers . The original summary post, here, followed up by the expanded first post on the supermarket business  model, the third advising to be savvy with data, and the most recent suggesting some ideas to leverage category management for the benefit of small businesses.

Reaching consumers via supermarket retailers remains a tough game, one in which the supermarkets  set all the rules, own the referee, and choose who can play with them. In other words, they are holding all the cards, so to remain in the game, you have to be smart, focused and innovative.

Building a brand is not something that happens overnight, rather it happens over an extended time, and requires vision, patience, and investment. However, the fantastic opportunities for small businesses to play with the big league opened up by digital technology has bent the rules a little.

So, following are the key considerations in your brand building challenge:

Know your starting point.

As with any journey, knowing where you are now, where you want to be, and having some idea of the road in between those points is vital to success. Therefore the logical starting point is a review of your current competitive and strategic environment, along with a critical review of your own capabilities, distinctive or otherwise, and the points that differentiates you from your competitors. A part of your starting point is a clear understanding of what drives success in your business, what drives costs and  revenues, how the business model works, and reacts to stress. Being self aware is as important in business as it is in personal relationships.

Have a clear picture of your customer in mind.

“Customer profiling” is for small businesses one of the opportunities they have that can differentiate them from their bigger competitors, but it takes the will to be able to say “No”, to define who you want to attract, and build your brand offering and communications to appeal to those people specifically. It makes little difference if you are B2B or B2C, the same rules apply. The closer you come to being able to define your ideal customer as a person you know, the better. A real part of this exercise is to be able to think like a customer. Some large companies now employ anthropologists to spend time in the homes of their target customers to see how they operate in the context that they are seeing as an opportunity to offer a branded product to deliver value of some sort

Have a clear view of your brand as a person.

Similarly, defining your brand with human traits is of vital importance. People relate to people not brands, therefore to build empathy, a consumer has to be able to impute behavioural characteristics, beliefs, and personality to your brand.

Build a brand differentiated from competitors in some ways of vital importance to customers.

There is little point in being the same, or very similar to everyone else when dealing with supermarkets. Negotiations then just becomes an auction between suppliers for shelf space, and once you have succeeded there, you face a reverse  auction for the consumers dollars. Neither are winning strategies. Small businesses by their nature do not have the scale to serve everyone, so having a clear offer to a small group, sufficiently powerful that they are not  prepared to accept a substitute is the desired outcome. If you can sit in front of one of the gorillas, knowing you only want distribution in one, and knowing that at least some of your customers will be prepared to either change their store choice to get your product, or build a bit of loyalty to their current store because it stocks your product, you  have some leverage in the discussions. It is all about negotiation leverage, and differentiation that delivers value to consumers gives leverage.

Aim for the long term.

‘Lifetime customer value” has become a  bit of a cliché in recent times, but that does not mean it is of less value as an idea. Building in the triggers that will bring our existing customers back time and time again is a far better way of building a brand and a business than to be constantly out fishing for  new customers. The digital tools now available have given us a wide array of tools that assist in the calculation  of the cost of acquisition and retention of customers. Marketing expenditure can be now absolutely accountable for results, and sensitive to even very small changes in tactics, and this is a potent  tool small business can use against their bigger rivals, and to build brand loyalty. Knowing what sorts of marketing activity engages existing customers is of way more value than going fishing for new ones.

 Consistency and predictability.

These two words are factors that always come up in consumer research seeking to identify the foundations of good brands. Consumers know what they stand for, know they will have those things delivered with  no surprises. However, the notion of consistency goes further, to the way the brand is packaged, advertised, an positioned, they are all consistent over  along period of time, change coming as evolutionary rather than revolutionary. Consumers also want to be entertained, intrigued, and engaged with their brands, and that will not happen if they are boring, so the communications have to walk that fine line of being consistent, while being constantly fresh and interesting. Few succeed, but those that do become significant players in their niche, weather that niche be a global market, like Apple, or a local market.

Differentiation.

Whatever else you develop your brand to be, and to do, make it different to everything else out there that could fill the same customer need. Without your own distinctive identity, you will be simply one of the forgotten brands that fight for shelf space on the basis of price, and then all you do is deliver profits to the supermarkets. However, differentiation does not mean a different pack size, or colour scheme, it means genuinely solving the consumers problem or addressing the “job to be done” in a different way, one that adds value by reflecting the job. You must however be very focused about what value you add to who, and why they should buy your brand over the other guy. The final implication here is that you know your competitor well, well enough to counter their obvious and logical competitive responses in the manner in which you build your brand.

Communications must be in the customer language.

Brands that communicate in the language customers use in the context in which the product is used have a chance of success, as the customers relate to the context and language. Many years ago I was a part of the team, an observer really as I was just a young graduate,  that created the “you ought to be congratulated” advertising that gave Meadow Lea margarine a stranglehold on the Australian market for 30 years. In a market with many heavily   advertised brands, Meadow Lea held a share of more than three times its closest rival for many years. The line, and the ads themselves spoke in the language of the primary customer, busy, smart women with families who were juggling multiple roles and responsibilities.

Plan and integrate your marketing activity across platforms.

In the “old days” the scope of available marketing activity was limited to the paid media, paid public relations, sales promotions and a few others. Now, that has changed, and the menu of available marketing tools has exploded. This huge array of options also makes life for the marketers complicated and dangerous, so great care must be taken to be consistent in your message and positioning across the whole array of marketing tools that are employed, and you need to be employing a range of them, rather than  a few, depending on the behaviour of your customers. These days, social media platforms play a huge role in the development of an opportunity to sell, but in fact they do not yet do much in the way of brand-building.  The core of much brand building activity is your website, to which you drive potential customers so they can check you out, and existing customers to reinforce the value of your brand in more “long form” ways like recipes, hints, detailed information, whatever is relevant to the consumers relationship with the product category and your brand. However, the most common problem with websites is that people “set and forget”. They need to be living creatures, fed and nurtured like the family pet if they are to deliver a return.

 

Two final thoughts.

  1.  Even if you do all the above right, better than anyone else, but your product sucks, you will have wasted all that effort , time and money. The consumer is not a fool, they will not mistake good marketing for a good product, at least, not more than once.
  2. If you want your brand to last, to stand the test of time and competition, build it on solid foundations, but make it flexible enough to adjust to consumers as they evolve.

4 steps to identify a Unique Value Proposition

Feb 16, 2015 | Customers, Marketing, Small business

crowd

Being different is fundamental to being profitable, as if you are the same as everyone else in everything you do, then the discriminator becomes price, and being the cheapest is rarely a profitable strategy.

Often this notion is written about as a ‘Unique Selling Proposition”, useful, but in this connected world, you have to be able to demonstrate your value before you have a chance at a sale, therefore it helps to have the value proposition at  the forefront of your thinking.

If consumers think  value is what you have to offer, they will buy it.

First, a definition.

A UVP is something  that clearly differentiates you from your opposition, it creates a point around which your target market can choose you simply because the others do not have what you do, and therefore cannot offer the same value. This does not mean you have to be the “best”, few would argue that a Hyundai is a better car than a Mercedes, but amongst its peers, it offers more electronic “bling” than the others, for the same money. If the bling is what you want, buy a Hyundai.

Second, make your UVP as clear as crystal. There is little point making the investment in identifying and creating the supporting infrastructure of a UVP, and then not clearly telling people what it is. This also acts as a focal point to attract the sorts of customers you specifically want, as they will be attracted by the UVP, others less so, so perhaps they go elsewhere. This creating of a “choice” mechanism is a powerful marketing tool.

Third, how do you identify and develop a UVP?

There are a lot of tools, and tricks, but no substitute for thoughtful, creative and extensive market and customer research and feedback. There is however, a relatively simple series of questions you can ask yourself to uncover the UVP.

  1. Identify clearly the offers of your major competitors. What they do well, what they do poorly, any guarantees they have in place, what they can do that you cannot, and vice versa, and any other factors relevant to a sale in your category, like geography, parking availability, speed of service, and so on.
  2. Understand the trends in your industry, in order to try and anticipate where it may be heading. Things such as the impact of technology, regulation, industry imposed standards, and the general levels of quality, service, and delivery that apply.
  3. Focus on your target market. Every market has characteristics of product, customer, business model, distribution channels and common cost and revenue drivers. Understand as completely as you can what these all are, looking for the typical distribution of characteristics for each parameter of importance. For example, if you are selling men’s suits, the target market is men, identify the typical or average customer, he may be 40 years old, a middle ranking executive, with two kids a wife who works, mortgage and 2 cars. However, that doesn’t not mean that single 25 year olds may not buy, it is just that there are less of them currently, they are less likely to buy, and almost certainly, they do not  buy multiple suits.
  4. Identify your specific ideal customer. The better you can identify the specific person you are targeting the better you will be able to craft a UVP of value to them, and communicate it. To continue the analogy above,  25 year old single men may not need as many suits as their 40 year old counterpart, but the one they want is not for every day wear, so they may be prepared to pay much more for the quality and styling you can offer. It may also be that your target customer is that 25 year olds partner?

When you think that an old head that has done this sort of exercise many times may be able to help, give me a call.

6 steps for lead generation by small business

Feb 2, 2015 | Communication, Customers, Marketing, Small business, Social Media

courtesy toprankingblog.com

courtesy toprankingblog.com

The purpose of a website is either commercial, or it is a hobby.

Assuming in most cases it is the former, the usual commercial rules apply, just because you have a website does not mean everyone apart perhaps from your mother will be excited.

So, to have a successful web presence the same 5 basic  rules of marketing  that have always applied, still apply:

  • Understand the drivers of behaviour of those in your market
  • Have a clear objective.
  • Have a plan that lays out the “roadmap” to achieve the objective.
  • Execute against the plan, but enabling learning from experience to occur whilst you do.
  • Have a few key metrics to track performance towards the objective.

You can make this as complicated as you like, but it will generally not help, just confuse. Nowadays however, navigating through the digital tools and options available  has become a job for a specialist, and that does not mean the pimply teenager down the road who is a Facebook maven.

A website is just another tool of commerce, the starting place that enables small businesses to communicate and compete in ways unimaginable 20 years ago. The digital revolution has also spawned a host of further tools to enable relationships and transactions, but  the basics of finding a customer, engaging with them and moving towards a transaction have not changed one bit.

For small businesses too compete, they need to do a few things well:

  1. Have a really detailed customer profile. Demographic, geographic and behavioural knowledge and insights are what enables them to target messages specifically, as if to one person.
  2. Create and/or curate information of interest to this specific audience. Information that alerts,  informs, and demonstrates your knowledge, has the opportunity to at some point in the targets future, to give them a reason to engage. There are myriads of tools to do this, from those that scrape social media platforms for key words, to following thought leaders and repackaging their ideas, to creating interest focussed newsletters automatically. However, don’t believe that any of this is easy, as you will be sorely disappointed.
  3. Open the chance of engagement.  By simply making the target aware of the content, and giving them a reason to stay on your site or platform, you open the opportunity for engagement. This is where the tools really come in, to sort, organise, and direct the appropriate content automatically once set up. The reach of social media into most segments is now extremely deep, but increasingly the platforms are seeking to be paid for the provision of that reach to you. Advertising, but once you have someone’s attention, by whatever means, you need to make sure you do something useful with it, as you may not get a second chance.
  4. Engage the targets with the content, by demonstrating that you are the one who can and will deliver value  at the time of a transaction.
  5. Enable the transaction. Often this doe not mean buying over  the web, it is much broader, and encompasses all the elements of the sales as well as the logistics channels and after sales service.
  6. Retain the faith of the customer for future sales, and turn them into a source of referrals for you to their networks.

Again I say, none of this is easy, but the point is that none of it was available to small business just 20 years ago. There has been an immense democratisation of opportunity, make sure you use it, and when you need assistance, call me.

 

3 steps to sell 30% more.

Jan 23, 2015 | Customers, Sales, Small business

Courtesy Geoff Roberts http://tinyurl.com/o2mcd4p

Courtesy Geoff Roberts http://tinyurl.com/o2mcd4p

 

 

Over the years working with B2B clients, it has become evident that the sales personnel are often tied up doing other  stuff, things that have nothing to do with selling.

Following up unpaid invoices, checking inventory, trying to shuffle production schedules to accommodate something that has already been stuffed up, doing forecasts, filling in annual budget forms, chasing slow paying debtors, the list goes on.

Sales people are employed to sell, and a large percentage of this other stuff is not customer facing, but just admin that somebody thinks may be necessary, and often is, but is not contributing to the next sale.

My answer is to rename the sales function “Revenue Generation” and to ensure that every activity that is not directly related to “RG” is moved elsewhere, automated, or best yet, eliminated. Sales has become just a generic functional term, it no longer carries the urgency and importance so necessary to keep everyone in jobs, and customers coming back. Revenue generation by contrast, seems to communicate that necessary urgency and importance.

When you  have done all that, you will have freed up typically 30-50% of a sales persons time, and logically, that enables them to sell more (or perhaps you need less of them).

However, there are 3 further steps to be taken:

  1. Only have revenue generators who genuinely love what they do, and understand and can articulate the value they and your products can deliver  for their customers.
  2. Only have revenue generators who are committed to doing what they say that will do
  3. Have everyone in the organisation recognising that irrespective of their role and function on a chart, their real job is to contribute to the process by which revenue is generated, and who will not let any superficial, political or shiny new thing, get in the way.

This is all pretty easy to say, but hard to do in the face of a culture that dictates  the way things are done, but clarifying ‘Why” things are done always helps.

Need help? Drop me a line.

 

 

The ultimate social media platform.

Jan 16, 2015 | Communication, Customers, Marketing, Small business

 

http://www.markstewart.net.au/wp-content/uploads/2014/01/women_chatting.jpg

http://www.markstewart.net.au/wp-content/uploads/2014/01/women_chatting.jpg

Most would acknowledge that word of mouth is the most effective marketing channel there is, then promptly forget that fact as they set about preparing and implementing their programs.

Discounts, bundles, making ads, facebook likes, social media mentions, retweets and shares, and many other activities all get a guernsey, but when was the last time you explicitly set about creating word of mouth, real life endorsements, Margie from Marrickville telling her neighbor over the fence that your product is the best thing since sliced bread?

How much of your marketing budget has as its specific aim to create personal endorsements?

We all know that “WOM” is the original marketing channel, so I was surprised to see this research that reflected that only 28% of small businesses when asked to identify their best marketing channel noted Word of mouth in its proper place.

Have we just forgotten the basics, been seduced by the the welter of choices available?

Perhaps it is just the sample, choices, or that it is from the US, but I asked a small group last week a similar question, albeit open-ended, and word of mouth came in at about the same level.

We can now target messages to specific behaviors practiced by very discrete subgroups, why would we not seek to ensure we deliver outstanding value to them, then encourage them to spread the word amongst those they know who are similarly interested?

Word of mouth, the original and still the best social media platform.