How To Sell More Wine? – With Better Point-of-Sale (POS) Marketing
Our blog’s focus, generally speaking, is on measuring and managing at-retail promotions or at the point-of-sale marketing initiatives. This can include temporary and permanent signage, food and drink menus and business-to-business beverage sampling – All promotional activities that convert beverage shoppers into buyers.
Having said this, I want to clarify that we here at OnTrak Software don’t typically get involved in the content of your POS materials. What we do care about is in delivering solutions to track and manage these point-of-sale (POS) marketing efforts for beer, wine and spirits wholesalers, helping them closely monitor the impact of their POS investments.
This particular post, however, will diverge somewhat from that formula based on my recent dining experiences in Orlando while I was attending the April 2015 WSWA conference. The fact that I am a consumer of beverage alcohol products has been helpful in putting the following together.
The Dining Experience
You enter a restaurant and are greeted and seated by the host or hostess – part of the routine includes the presentation of the food menu to each diner and the presentation of a special stand-alone wine menu to the diner who is identified as the wine buyer for the group’s meal. The food menu typically will be two or sometimes three pages; the wine menu, on the other hand, is often many pages with wine listings on both sides of every page.
On the second night of the 2015 WSWA conference, our group was directed to one of Orlando’s top steak houses – and the above scenario played out basically as noted. I was given both the food menu and the wine menu (most likely because I was buying) and here is what I noted:
The food menu was four pages, not two – but the first two pages contained a listing of accolades praising the restaurant’s quality and proudly pointed out its Zagat rating; page two explained why the restaurant was different from other high-end restaurants. Pages three and four contained the actual menu of items we could choose from. Nine entrees, plus three surf and turf variations were offered. There also were about a dozen appetizers, plus three salads, oysters and a mixed seafood grill. Fifteen side items plus the mention of the special of the day completed the food menu.
Sound typical, yes? I thought so.
Here’s some of the information pertaining to one of the entrees listed:
Kansas-City Strip (24 oz. bone-in): 34.95
- Known for its richness; coupled with our forty-five day aging process and open-flame cooking produces the juiciest of steaks. With a creamy horseradish sauce, add 3.50.
Again, what you would expect from the food menu at a high end steak house.
Next I opened the wine menu – let me modify that: Next I opened the thirty-three page wine menu! Let me start off by telling you that as a rule of thumb I am rarely, if ever, intimidated by wine lists, even when I know very little about the wines on them. This wine list might just be the exception to the “intimidation rule,” however.
Here’s how this book was organized: Thirty-three pages, listing offerings first by grape (the first seventeen pages) then by country of origin (the next twelve pages) then by half-bottles, dessert wines and by-the-glass features. You may think it a bit obsessive of me, but the list contained an average of thirty wine choices (including sparkling wines and Champagnes) per page. The wines were listed in no particular order as far as I could tell unless it was from highest price to lowest (within grape or country of origin).
The listings were single-spaced and the roughly one-thousand wines became a blur as I kept turning page after page after page. The first item listed on page one was a Champagne; and, at $600, was by no means the most expensive bottle on the list; Screaming Eagle (a 2003 California Cab), at $3,500, grabbed that honor – and that one was at the top of page nine. Another twenty-three pages, mostly consisting of multi-hundred dollar per-bottle wines followed – it was almost overwhelming.
Now, imagine if the food menu had been even ten pages, let alone thirty-three. I suspect most of us could “ingest” a ten-page food menu, consisting primarily of meat and fish items without much problem, especially if the restaurant listed the items as they had listed the “Kansas City Strip” – complete with a short description of the item, perhaps something like this:
Cedar Plank Roasted Alaskan Salmon: 29.95
- Alaskan King Salmon topped with a light parmesan horseradish and dill aioli; cedar plank roasted over an open flame – delicious.
What’s Wrong With This Picture?
After a wonderful and delicious evening, we returned to the Grande Lake JW Marriot Hotel for a night-cap at the lobby bar. Laying on one of the tables in the lounge area was the April 2015 issue of Beverage Dynamics – I began somewhat mindlessly paging through the magazine and all of a sudden came across this interesting – and considering my evening’s dining experience, compelling – item:
“There is still a major diner intimidation with wine lists and studies show they [customers] continually order the third item from the top . . . (not too expensive and shows minimal thought).”
Informally, I began canvassing wine distributors and asked them if they produced “restaurant and bar” wine menus (POS marketing by another name) for their customers.
Those that did I asked follow up questions:
#1. Do you think patrons are intimidated by the wine menus handed to them by most restaurants?
#2. Do you think you could sell more wine and more variety of wines to your customers and, in turn, they to their customers if wine menus offered a few descriptive terms and “awards-won” information about the individual wines on the list – somewhat like the brief descriptions provided for entrees?
Some distributors said they’ve been trying to figure out how to provide this information on their customers’ wine lists for years. Every distributor I asked agreed that wine menus are intimidating and that providing information about the wines on virtually any wine list would go a long way toward increasing the number of items sold and also would likely increase the quantity sold, either by the bottle or by-the-glass.
Beverage Dynamics cites a 20% increase in by-the-glass sales and in bottle sales for restaurants that provide “wine education” to customers.
Whether you call it wine education or wine POS marketing is up to you. What is clear, regardless of what you call it, providing information about the wines on your wine menus and lists will very likely be correlated with both a widening and deepening of sales of your portfolio of wines marketed via menus.
“This is such an obvious way to dramatically increase by-the-glass and bottle sales, it’s a wonder we haven’t done something like this a long time ago.” – a top-ten wine and spirits distributor executive at the 2015 WSWA conference.
For more information on how to make your menus and lists – wine POS – work to increase sales of your “varietals and vintages,” click this button:
The June 1, 2015 blog entry discusses that while many have made a decision not to create more informational beverage menus, there may be strong reason to do so.
The 70th Annual WSWA Convention: So Hot, It’s Cool!
First, our thanks to the WSWA and the convention staff - A job well done!
We’ve just returned from the WSWA 70th Annual Convention & Exposition in Orlando – our fourth year in a row as attendees and our first year as both a Member and Sponsor.
From our vantage point, this year’s theme, “So Hot, It’s Cool” was very appropriate; and this year’s convention was our best experience ever.
Not only are beverage alcohol sales surging, but also the number of WSWA convention attendees is swelling to over 2,300.
Sunday’s opening general session by Doug Hertz, president of United Distributors, and WSWA Chairman, included a decade-by-decade history of the WSWA. Next was a very funny and entertaining presentation by keynote speaker, Terry Bradshaw, NFL Hall of Famer and broadcaster.
One of the high points of the convention was Tuesday’s general business session when Richard Leventhal, Chairman and CEO of Fedway Associates, received a lifetime leadership award. Richard gave a poignant, pictorial reminder of the devastation of Hurricane Sandy and the damage done to this distributor. He highlighted the incredible hard work of his employees, and the selfless actions of other distributors who came to the aid of Fedway, getting them back in operation in just over two weeks. Fedway’s amazing story received a standing ovation and an obvious and unrestrained outpouring of support from his peers.
Tuesday’s closing keynote speaker was Barbara Corcoran, real estate mogul, entrepreneur and TV personality on ABC’s Shark Tank. Barbara entertained and inspired the audience with her life story from a modest upbringing in New Jersey, to the heights of the real estate market in New York City. Her ‘keys to success story’ was motivational and well received by all attendees.
U.S Beverage Alcohol Forum – Break-out Sessions
Of particular interest to us were several break-out sessions, notably “Launching Brands in the U.S. and Addressing the Challenges of Distribution Today” and “Using Technology to Drive Your Business on the Street.”
These presentations included panelists from suppliers, distributors, marketing and technology providers and a national POS fulfillment company. The takeaways from these sessions are too numerous to discuss here in detail, but it is clear that launching a brand requires skills from several disciplines and the staying power afforded by a well-capitalized supplier. At the same time, technology is a critical competitive advantage, not just for logistics, transport planning and accounting, but also for retail marketing initiatives. Repeatedly, both suppliers and distributors noted that one key to building a brand is to “Get customers to try your product – which is difficult in an overcrowded space, for example, wine.”
Launching a new brand of wine (spirit or beer) is an expensive proposition these days. Panel members agreed that one of the keys to getting a trial of your brand is to recognize that the most important place to market a new beverage alcohol product to shoppers is clearly at the time and place that they are actively looking to buy.
Our perspective is that the point-of-sale (POS) has not traditionally been the place that enjoys the majority of either the marketing budget or the deployment of tracking and measuring software. In short, too much money has been spent building brands via broadcast or print media that shoppers can’t find or can’t even remember once they are overwhelmed by the variety and choices before them in the aisle. The result is that too little money has been spent on marketing at the point-of-sale where it can make all the difference in a shopper becoming a buyer [of your product] or walking on to the next product.
Clearly POS, shopper marketing, marketing at-retail is reaching or has already reached “critical mass.” Suppliers and distributors may not agree on everything, but one thing they seem to understand is that POS spending is of critical importance yet, in many cases, is out of control – unable to be tracked, measured and managed.
If this describes your situation, press the button below – we may just have the solution you’re looking for.
Improving Wine Sales with High Quality Wine and Beverage Menus
As you may know, recently, the US became the number one wine consuming country overtaking France.
However, US consumer's ‘Wine IQ’ hasn't kept pace with the increasing demand.
With over 105,000 wine labels now available to US wine consumers, (and that number is growing), it’s no wonder that many diners develop ‘Wine Selection Anxiety’ when it comes time to order a bottle of wine to accompany dinner. With so many nondescript wines available to them, many diners will choose a wine based either on price, or their server’s suggestion.
“But wait,” you may be saying, “Virtually all restaurants that sell wine, already provide a wine menu. Aren’t you setting us up to tell us we will sell more wine by adopting wine menus?”
Yes, I am going to suggest that wine menus do drive wine sales. And I also agree with you that any restaurant that sells wine to its patrons already has a wine menu. But I am also going to make some suggestions about wine menus that will give you an excellent chance of driving even more wine sales. In addition, if you implement some of these suggestions your customers will keep coming back because your wine menu creates truly delighted customers.
Menus - Another Type of POS
I’d like for you to think of a wine menu just as another type of point of-sale promotion (POS). After all, the wine menu offered to restaurant patrons is a form of advertising or merchandising that is meant to influence diners to make a wine buying decision while at the point of sale.
In other words, wine menus, like traditional POS types – signs, displays, etc. – are merchandising tools; and like all forms of POS, menus need to be carefully designed and tastefully executed.
According to Cornell University’s Center for Hospitality Research, generally restaurants with higher wine sales utilize wine menus that:
Are part of the food menu
Do not include a dollar sign in the price listed
Include multiple mentions of wine from a specific winery or wineries
Have lists with a minimum of 150 labels and
Include a “Special” or “Reserve” categories of wines
Of course, it goes without saying that providing some information about the wine mentioned on the list will serve to reduce wine selection anxiety.
A related fact is that restaurants with lower wine sales utilized menus that only categorized wine by style, with a limited number of choices, and which were dominated by low price-point wines.
If you are a wine distributor, or the customer of a wine distributor, it would be to your advantage to heed Cornell’s findings and adopt as many of the above recommendations as possible. It could be quite an advantage for you if you were able to keep track of and measure the success of the menus you created that follow these successful wine menu characteristics.
The good news is, there is a powerful merchandising tool that will help you track, measure and manage your customers’ wine menus so that both your customers – and you – sell more wine.
That tool is MenuTrak! For more information please click this button:
A WSWA 2011 Brief by Denis Clark, Executive VP, OnTrak Software
Detailed Bill-Back Reports Can Pay Off Big for both Wholesale Beverage Distributors AND Their Suppliers
Top Observations Arising From Discussions at WSWA 2011
This year at WSWA 2011, OnTrak Software was pleased to talk with numerous suppliers about how wholesale distributors could improve their bill-back recovery by providing better information on where and when the supplier’s brands are being promoted.
We all know that each year suppliers spend hundreds of millions of dollars in the form of bill-backs for expenses related to point-of-sale signage, menus, samples and other marketing materials. However, wholesalers seem to lack any clear way to be sure they’re receiving the maximum available amount of bill-backs. Yes, they nearly always send supplier reports that attempt to justify the bill-back dollars, but are they detailed enough to become a true business growth tool for both sides? Or is it simply a reimbursement report? It doesn’t seem the true value of the reports is harnessed by the majority of wholesale distributors OR suppliers.
First off, it’s clear that beverage suppliers are more than happy to pay the wholesale distributors for promoting their brands through samples, menus, signs and displays. There is money available -Significantly more money than what is currently being paid out today. The opportunity is there to utilize bill-back dollars in a way that truly grows the business between a wholesale distributor and a supplier.
Here’s what suppliers told us:
Detailed Reports Are Required
Large suppliers won’t pay a dime unless the wholesale distributor can prove, with reports, the amount of the money that was spent, where it was spent, and with whom. Suppliers at WSWA confirmed that the information that they get from the wholesale distributors today is often fairly vague. In many instances, suppliers must go back to wholesalers and ask for more detail to justify the bill-back. Big suppliers at WSWA said they definitely pay, but they need detailed reports.
Desire to Streamline Bill-Back Approval Process
Suppliers want to shorten the cycle time for bill-back approvals and would even be willing to spend more money after seeing detailed reports. This is about BUSINESS BUILDING. When most of the larger suppliers were presented with reports from the suite of OnTrak products, they told us that the information in the reports was exactly what they needed to receive from distributors. With reports available at the click of a mouse, it’s clear that fast and accurate reporting means faster payments.
The Potential Business Value of Rapid Reporting
Some of the suppliers at the WSWA conference indicated that they already receive reports that do include some welcomed/helpful details. However, they had no idea how much time it might take for a wholesaler to produce such reports. Without automated solutions like those available from OnTrak, wholesalers may spend days and weeks compiling the reports. But why should the supplier care how long it takes? Well consider this: If wholesalers take less time producing reports, then they would have more time to promote the supplier’s brands. That’s a win-win for both suppliers and wholesalers.
OnTrak Software Answers the Need to Enhance Bill-Back Dollar Value
OnTrak Software offers automated solutions that guarantee wholesalers obtain all allowable bill-backs. Manual systems are no doubt prone to expensive mistakes, and homegrown solutions for bill-back recovery take away from time that can be spent on a wholesaler’s core competency: Selling more beverages.
Wholesalers need a system that accurately tracks and manages, as well as ‘recovers’ the maximum supplier marketing co-op dollars available from their suppliers. The more dollars a wholesaler is able to recover, the more they are able to reduce their overall point-of-sale marketing expenses. Using measured and managed point-of-sale marketing systems from OnTrak Software, wholesalers can increase annual sales and grow market share – illustrating the value of a supplier’s bill-back program.
OnTrak’s point-of-sale marketing management tools lower the costs and risks associated with making business decisions and help wholesalers achieve and support the company’s strategic sales objective. These OnTrak software tools are MenuTrak, for custom beverage menus, and SampleTrak, for beverage sampling and tastings.
What Suppliers Said about OnTrak’s Tools at WSWA
When suppliers examined the reports produced by OnTrak products, they confirmed that the content of OnTrak’s reports was exactly what they needed in order to pay the wholesale distributors and perhaps increase spending where success was clearly illustrated. In fact, most suppliers indicated that OnTrak reports provided significantly more information than they currently obtain from wholesale distributors’ reports.
For more information about our products go to: www.ontraksoftware.com/products or call 800.513.9194.
Point-of-Sale Marketing - Means Marketing Success
We just returned from the 2011 WSWA 68th Annual Convention & Exposition in Orlando. On Tuesday, the day after the exhibition hall closed, we attended a great educational session:
“Brand Builders: Case Histories of Successful Brand Launches, Expansions and Initiatives.”
A Saturated Market
This session offered valuable advice to both suppliers and wholesalers. The opinion of the panelists was that even though the alcohol beverage market is saturated, every year there is a net gain in new “adult beverage” SKU’s. And there's no end in sight. Producers, large and small, are continuously developing and bringing new products to the market in hopes of becoming the next big thing.
According to Dimensional Insight, the number of alcohol beverage SKU’s in the US now exceeds 100,000. No wonder it is difficult – and potentially very expensive – for a new beverage to gain a foothold and take off.
The panelists, as well as other attendees, generally agree on one thing: To be successful, new products have to be promoted before large wholesalers give them much shelf space. Even small wholesalers need incentives from suppliers to promote the newest beverages.
The most common theme throughout the panel presentations, and from the attendees, was that a new product (unless it is from a name-brand company or family) must be tasted or sampled to gain a following. These new products must be promoted at the point-of-sale (POS) to introduce and reinforce consumer awareness. According to the experts, suppliers and wholesalers we spoke with, new alcohol beverages are best promoted via sampling (B2B) and tasting (B2C) events, menu placements, or retail signage and displays
In summary: Point-of-Sale is one of the most effective and efficient methods to promote adult beverages. POS, in other words, “Means Marketing.” Sounds so easy “All you have to do” is come up with sampling allowances and marketing co-op programs to encourage wholesalers. The quick answer may be “yes,” but it’s more complicated than offering up to a 50 percent sample allowance, or allowing wholesalers to recover $15.00 “per mention” on their customer drink menus.
Prove It – Or Else!
As a wholesaler, you may be at a point where in return for the supplier’s investment in your point-of-sale marketing, the supplier wants to see measurable results from your marketing campaigns including: sampling, drink menus, signs and displays.
Today, supplier top management needs “statistical assurances” or reports before they “write the check” to wholesalers who are claiming marketing or sampling recovery dollars. The days are gone when a wholesaler can just pick up the phone and ask his supplier for $5,000 to reimburse the wholesaler for POS spending campaigns. Suppliers are correct in requesting detailed reports from wholesalers. These types of reports have, for some wholesalers, always been possible, but often very difficult to produce – Especially without technology to help easily assemble and produce these reports. So, if you haven’t been asked to produce such “assurances reports” previously – be prepared.
For any company looking to introduce or launch a new product here’s an accurate, but greatly oversimplified, summary from the 68th Annual WSWA Convention:
“If you want to successfully bring your new alcohol beverages to a saturated market, you must provide a mix of POS marketing (sampling, menus, signs and displays), with conventional sales (feet on the street) and other marketing efforts (social media, mobile-technology, the Internet, email and direct-mail, and print and broadcast media).
Next, measure which of these approaches are both the most effective and most efficient – then, spend appropriately.”
After three days of listening to presenters and attendees alike, at least one thing is clear: Measured and managed POS is the most cost effective tools you can and should deploy – today – to achieve success.
The strategies and tactics these marketing approaches represent are the “liquid in marketing’s bottle and not the label slapped on top.” – quoted from the 2011 WSWA program guide.
– Mark Fullerton
For more information about our products go to: www.ontraksoftware.com/products or call 800.513.9194.
Supplier Billback Recovery - A Strategy or Tactic - Or Both?
We recently were told by a manager at one of our new customers that he had been assigned to work on strategic projects for the company. We asked a couple of questions to determine which projects were considered strategic.
At the top of his list was a project to implement a system that accurately tracks and manages, as well as ‘recovers’, the maximum supplier marketing co-op dollars available from his company’s suppliers.
This is a highly visible project for our customer, and certainly seems to pass the test of being strategic. Typically a strategic project is one that is intended to have long term objectives, and which when implemented becomes integrated into the company’s operation.
On the other hand, tactical projects tend to be the means to achieving the strategic objective - A way to enable the strategic goal. Strategies are generally thought of as “What to do” whereas tactics are more concerned with “How to do it”.
Remember our customer’s top strategic objective was to maximize the recovery of supplier billback monies. The more dollars his company was able to recover, the more they were able to reduce their overall point-of sales (POS) expenses. Using measured and managed POS, they were able to increase annual sales and grow market share.
Next, our customer was faced with developing the tactics to achieve these strategic goals – sometimes a daunting task. Fortunately for our customer, POS marketing tools are now available that lower the costs and risks associated with making such a strategic decision. And fortunately for us he chose the tactics and the tools from OnTrak Software, to achieve and support the company’s strategic objective. Theses OnTrak software tools were MenuTrak, for custom beverage menus, and SignTrak, for custom POS.
Who are we to argue the point our new customer made, “OnTrak is a strategic investment that will help us turn our Graphics Division from a cost center to a profit center.”
We'd be happy to show you how OnTrak can provide you with the competitive tools to grow your sales and control your Marketing at-Retail costs. Whether you consider us a strategic acquisition or tactical support, please let us help you to achieve your strategic goals.
Helping Wine Distributors Make Menu Creation the Key Value-add for Their Customers
Better Times Ahead
Instead of adding to the clutter of Top-10 predictions for 2011, I will make just one prediction for 2011:
2011 will see a return to ‘dining out’ that will accelerate in step with the economic recovery
This after more than two-years of increased ‘stay-at-home’ dining
As consumers become willing to spend more of their precious, discretionary income on dining out, they will likely take a more selective approach to their choices than they did in 2008 to 2010. Restaurant patrons will only dine out if the restaurant experience offers something different or extraordinary. The “same ol’ same ol’” won’t cut it in the new year - If it ever did.
Opportunity and Risk
You may now have a golden opportunity particularly, if you distribute wine, to make a significant, positive impact on your customers, their customers, as well as your distribution business.
Imagine yourself as a restaurant patron. Ask yourself; is the restaurant’s wine menu exceptional? Does the menu define the restaurant, educate its patrons, or complement the cuisine so perfectly it “makes the meal". Or is it just like other menus found in establishments everywhere?
If the wine menus you provide to one customer are no more than a restatement of menus you provide all your customers, then your business may be at risk of losing the menu creating privilege.
Remember the saying within the wine distribution industry, “The distributor who controls the menu, gets the lion’s share of business.”
Where’s the Profit?
Most of a restaurant’s profitability comes from alcohol beverage sales – driven largely by the wine menu. While your company has taken over the burden of creating the wine menu, you must respect the amount of trust your customers have in you to create the menu. Consider that your customers have placed the most profitable part of their business in your hands. Today, more than ever, your customers must believe your primary interest is in their success; not just in selling more of your products.
Do your wine menus help your customers differentiate their restaurants from their competition? Do the menus you supply look like the local grocery’s “Wine Aisle” top-picks? If you were the customer, would you feel good about the menus you were supplied?
Remember, these menus are placed in front of every restaurant patron, and may be the most powerful, point-of-sale influencer, often leading patrons to purchase the restaurant’s most profitable brands. If your wine menu does not distinguish your customer from their competition, then you have not done your job as a wine distributor. Bottom line you are at risk of losing your customer to another distributor who understands this key point.
The restaurant business is risky – many go under every year. You should be doing everything you can to help your restaurant customer succeed, to stay in business, and to be able to buy more from you as a result. If you will take the time to create a wine menu that strives to those ends, you too have a much better chance of succeeding.
If you are not producing wine menus that stand out in this crowded market, then 2011 is the year to step-up your game.
Keep in mind: You’re not just selling your products; you’re selling your company as a resource. Let your customers know your commitment to helping them be successful. Work with restaurant owners to consult, not simply ‘take over their menus.’
And now a word from our sponsor
OnTrak’s family of Marketing at-Retail applications – particularly MenuTrak – are powerful tools to help both wine distributors and their suppliers provide a competitive advantage when it comes to the tasks of Managing, Controlling and Measuring the impact of Wine Menus – for both your customers and your company.
– Mark Fullerton
Lowering Costs with a Managed, Marketing at-Retail Solution
Time (and Error Reduction) Is Money
One of the biggest advantages you will gain by using an automated, Marketing at-Retail management system is the reduction of errors that are so common when developing and printing such items as point-of-sale signage and menus. A primary cause of these types of errors this the lack of communications between the sales and merchandising staffs and the graphics department personnel. Often these errors in communications result in delays and expensive reworks (An industry average of $45 to $60 per rework.)
With a point-of-sales (POS) software management system, the ordering and tracking processes are fully automated. Instead of jotting down sign requests on a bar napkin or paper form, and stuffing all of the orders in the print shop in-box at the end of the day, your sales staff can transmit sign and menu orders electronically from the trade, throughout the day. Only minimal data-entry is required on the part of the sales person because all of the sign types the customers typically request are pre-loaded into the management system.
When sales reps enter a sign or menu request, they simply review a dropdown menu that shows the types, sizes and graphics for the signs or menus. Only when all of the required attributes for the customer and the specific type of marketing material are entered perfectly will the system accept the order. Then, the order is automatically transmitted to the print shop along with information about when the signs or menus are needed.
The Elimination of Errors
The ease and accuracy of this process eliminates virtually all of the time and expense of remaking signs or re-proofing menus. In many cases a managed POS software solution is completely paid for through the elimination of errors alone.
Another benefit of using an automated system to manage, control and measure your signage and menu operations is that the system enables print-shop management to direct each day’s production as effectively and efficiently as possible. Distributors have commented that a managed system permits orders to be approved, prioritized and scheduled automatically. Similar print jobs can be run contiguously saving time and reducing waste.
We Spent $30,000 on Banners! What Did We Get in Return?
Business Analytics have recently become one of the hottest interest areas for beverage distributors. Today, with the growing emphasis on promotions and Marketing at-Retail initiatives as the key to growing market share, it is important to know which marketing materials are creating the greatest returns for your business. For example, if it costs you hundreds of dollars per month to produce signs or menus for a customer who only buys a few cases per month, that is probably not a good use of your valuable resources. With a managed system you can ensure you’re spending your marketing budget serving the customers who do the most business with you.
Value for the Suppliers Too
Increasingly, suppliers are asking distributors to document sign, menu and product sample spending in order to fully participate in their bill-back or marketing allowance programs. Without a system that includes automated ordering, tracking and reporting functions which provide proof to suppliers, that task is extremely difficult. However, with an automated, managed system, a distributor can quickly deliver the data, saving time and paperwork, but more importantly ensuring that nothing slips through the cracks.
These Web-based systems are currently being deployed and adopted by beer, wine and spirits distributors of all sizes to address some of the most commonly expressed concerns of distributors, namely, how to reduce Marketing at-Retail expenses, increase market share, and provide tools to process, compile and file for available recovery dollars.
Measuring the ROI of your Marketing At-Retail Initiatives
In this post, we will give details on what needs to be done to evaluate the return on investment (ROI) of your Marketing At-Retail efforts.
We’ve already discussed the differences between advertising and promotion in a previous blog – but it’s worth repeating that there are two key advantages that point-of-sale (POS) promotion has over advertising:
#1 – POS materials have an almost immediate impact on sales; and,
#2 – It is easier to measure the ROI of POS materials vs. advertising.
Order Entry Systems
Alcohol beverage distributors typically have sophisticated order entry systems at the heart of their business. Data is entered into these systems by their sales representatives. Reps check the retailer’s shelves to determine the inventory needed to avoid an out-of-stock condition. Sales reps often have laptops, or smaller hand-held devices, to assist them in this activity. Over time, demand patterns, by customer, brand and date emerge based on the sales data gathered at the retail location. Distributors who are armed with this data will know how much of a certain item will likely be purchased by their retail customers for any desired time period.
POS Order and Tracking Systems
During these same sales calls reps will typically discuss and order POS marketing materials (signage and menus, for example). Promotional objectives, including price and type of POS materials are selected and configured on-line and transmitted to the distributor’s graphics department or sign shop, using the same mobile technology used to create the weekly product order.
Because distributors provide the lion’s share of the marketing at-retail materials to retailers, both the POS promotional data and the sales data are easily captured for comparison and analysis. The Vice President of sales for the distributor no longer has to wonder, “What did we get for the $30,000 worth of banners we placed at BW3’s last year,” or, ”Did we actually increase our market-share by providing our customer with $850 worth of menus?”
Return on Investment Quantification
Electronic order entry and POS ordering and tracking systems help improve a distributors marketing at-retail ROI in three ways.
- Since data is entered for by the sales rep for both products and POS during the face-to-face call with the customer, survey and data entry costs are slashed or almost entirely eliminated.
- Just as an electronic order entry system reduces data entry errors, an electronic POS ordering system reduces or eliminates data entry errors from the customer’s promotional materials orders. Considering that a single paper sign costs the between $35 and $60, eliminating sign shop reworks provides significant quantifiable benefit.
- Electronic POS entry and tracking reduces the time from the POS order to the placement of the POS materials in front of the customer. Some distributors have cut their POS time-to-market by two or more days. Since price is often a key factor in driving up retail alcohol beverage sales, the distributor who gets their POS to market first can capture market share from competitors.
In our quest to measure the ROI of marketing at-retail campaigns, an electronic POS system can quickly generate reports indicating the correlation between POS spending and sales. If a promotion is producing less than favorable results, it can be modified, enlarged or replaced quickly until the desired sales targets are met.
The ability to measure and compare POS spending to revenue by brand, by customer or other criteria and make adjustments is invaluable. An electronic POS tracking and management system provides the requisite tools for distributors who need to provide accurate cost accounting to ensure marketing allowances are properly compiled for complete and rapid recovery of available supplier bill-backs.
By integrating order entry and POS data, distributors will have the business intelligence and data correlating capabilities to analyze the impact of their marketing at-retail materials – making the measurement of POS ROI another powerful weapon in their competitive arsenal.
– Mark Fullerton
Marketing at-Retail - Books Worth Reading
Marketing At-Retail – whether you call it Point-of-Sale, Point-of-Purchase, Product Samples or Product Menus – is undergoing dramatic change driven by market segmentation, media fragmentation and even the places and methods by which brand identities are born and built.
Suppliers, distributors and retailers know they must continue to invest in point-of-sale marketing to drive sales. But knowing what to do, how and when to do it, and why, may often be elusive. Specifically, beer, wine and spirits suppliers, distributors and retailers can build successful brands and drive sales only by using up-to-date methods and tools.
There are many publications which offer insights on every aspect of marketing alcohol beverage products including:
- Guidelines for planning and executing effective marketing at-retail campaigns
- Discussions and examples of tools for influencing retail shopper’s behavior
- Ideas to maximize POS/POP return on investment ROI
- Best practice outlines for integrating POS (promotions) with Brand Building (advertising)
The following is short list of publications which we have read and have found helpful:
- Wine Marketing and Sales: Success Strategies for a Saturated Market
Liz Thach Ph.D., Janeen Olsen Ph.D, and Paul Wagner $44.00*
- Successful Wine Marketing
James Lapsley, Kirby Moulton $111.00*
- Sales and Service for the Wine Professional
Brian K. Julyan $44.00*
- Beer Blast: The Inside Story of the Brewing Industry's Bizarre Battles for Your Money
Philip Van Munching $55.00*
- Shopper Intimacy: A Practical Guide to Leveraging Marketing Intelligence to Drive Retail Success
Rick DeHerder $30.00*
* All prices shown reflect Amazon’s current off-SRP discounts as of the date of this post. These titles are available to be ordered from Amazon, Barnes & Noble, Borders, or other online outlets.
– Mark Fullerton