Why More and More Beer Wholesalers are Taking a Look at the Power of Point-of-Sale Marketing
Our View from Booth 1126 at the 2011 NBWA Convention
We just got back from our fifth straight annual NBWA Convention and Trade Show. Each year these guys do an outstanding job, and this year was no exception.
For OnTrak Software - This was our best year ever.
We were overwhelmed with the interest in our company and our products. We met dozens of beer wholesalers and their suppliers plus our customers, prospects and potential business partners – All very interested in what we do and how we help distributors improve their business and sales performance through the management of Point-of-Sale (POS) Marketing campaigns (custom and permanent signs and sampling programs).
Most of the people we talked to expressed interest in at least one of the following OnTrak benefits:
- Cutting the cost of POS marketing - An expense item for them which seems to be out of control.
- Growing sales with better POS marketing campaigns – Many agree that POS sells beer, and great POS sells more beer – But some consider POS just a necessary evil.
- Measuring the impact and profitability of their POS initiatives - Not many are able to do this today, but wanted to know more about how OnTrak could help them.
- All of the above.
With hundreds of booths, we were honored that so many wholesalers took the time to meet with us.
We had about 8 hours of booth time over 2 days, leaving us with but a few minutes to make an impression on the beleaguered conference attendees.
We’ve been telling our POS Marketing Management story for many years. Why in 2011 did wholesalers want to know more about our solutions to help them track, measure and manage their at-retail promotions?
Here’s a summary of what beer wholesalers offered:
- Alcohol beverage sales have been down - Most likely due to the overall economic downturn these past couple of years
- Costs are up - Products, warehousing, delivery, sales and promotional costs
- Competition is increasing – Presumably due to the proliferation of brands and consolidation of distributors
With these market conditions it’s not surprising everyone wanted to know how to get the maximum sales return on their ever-increasing investment in point-of-sale promotions. They don’t mind spending money on POS, if they are able to get a commensurate increase in beverage sales.
No wonder OnTrak’s products and benefits resonated with them.
Here’s our view:
While there are numerous ways to spend advertising dollars – A TV commercial, a newspaper ad, or a glitzy billboard – Both distributors and suppliers know that you have a better chance of turning shoppers into buyers at the point where the products are available - In the store, restaurant or bar.
Given the current economic environment, increased competition and higher costs, advertising spend should be focused on where the customer’s money is spent first. So it is more important than ever to order, produce and place better and smarter shopper, in-store, point-of-sale marketing campaigns where shoppers become buyers.
So how do you create better POS marketing materials if you don’t have the tools to track, measure and manage those POS marketing campaigns?
Well with OnTrak software, of course.
A lot of people who came to our booth seemed to get that point. I wonder if it will catch on. I hope so.
Click here to learn how OnTrak helps Track and Measure POS:
Take Control of Your POS Marketing Budget and Start Saving Money on POS Today!
Recently I spoke with one of our customers – a mid-size, alcohol beverage distributor - to find out about their business performance this year. In addition, I was also interested in how they were using our software products to track, measure and manage their POS initiatives.
From a business performance perspective they said their sales trend over the past two years had been down, but recently things had started to turn around. In fact, some parts of their business – including craft beers – had actually grown during both of the past two years by double digits.
As for our software, I was interested to learn if we had helped them save money on their POS materials, or helped them generate better sales results.
Their first response was that they were continuing to spend the same amount of money on POS marketing. Being initially disappointed, I probed deeper. I asked, “Was the lack of savings an indication that our products were not providing the return-on-investment they had hoped for?” I waited for their response.
Here’s what they said.
While POS spending had not decreased from the pre-OnTrak days, it was not necessarily a bad thing. Indeed, our customer told me, “Since deploying OnTrak software, we’re actually producing more POS than previously – without an increase in cost.” Although expenses had remained about the same, they were able to produce more promotional materials. This additional production, without additional cost, was, good for them and good for their customers. In fact, our customer added, “The additional POS materials we’re producing are allowing us to take market share from our competitors – and that’s a good thing.”
I also learned that since deploying OnTrak software, our customer has been able to change where their POS is placed. No longer is he placing too much POS with some customers and not enough with others. This balancing of promotional materials placement by customer has had a positive impact on sales. Our customer explained, “The placement of additional promotional materials at customers who had previously been receiving insufficient POS stimulated incremental sales. And the reduction of POS at customers who had been over-saturated with signage did not decrease sales.”
Our customer said that prior to deploying OnTrak software he was spending an increasing amount on POS without getting measurable productivity or greater market penetration. He had no way of telling if his POS spending was making a difference in sales. Bottom line he had a ‘feeling’ about his promotional emphasis – too much, too little, about right – but he didn’t actually know.
Now he does!
If your goal is to find affordable tools that can simultaneously cut your POS costs, improve the impact of your POS Marketing campaigns, and generate better sales results, then you need to take a look at OnTrak’s portfolio of POS Marketing Management solutions.
Click here to learn how OnTrak helps Save Money on POS:
Finally a TV Ad About Point-of-Sale Marketing Campaigns - Ironic?
Perhaps like many people today, my wife and I rarely watch “live” TV. Sure, we will watch some sports “in real time,” but even then we tend to “TiVo” virtually everything, giving us the opportunity to start the big game from the beginning and skip through the commercials. Sound familiar?
The truth is that when I watch TV alone, even if it is recorded, I tend to watch at least half of the ads. Candidly, I do like to watch TV ads and I look for the associated Point-of-Sale (POS) Marketing Campaigns at my favorite beverage retailer. Oh, I also make my living providing solutions to help track, measure and manage these types of campaigns.
The TiVo (or DVR) effect is yet another reason for the declining impact of TV advertising and the reason most beverage suppliers have shifted significant dollars toward POS campaigns. After all, if a growing portion of your audience is fast-forwarding through your TV ads, that investment is not doing much for your brand.
Well, wouldn’t you know it, those clever TV Ad Men, ever keeping up with current trends, have put together a TV commercial – about POS! Sure, the ad is supposedly promoting a beverage, Pepsi MAX, but the way the 60 seconds of video plays out, the commercial is clearly about the impact of POS and who – Coke Zero or Pepsi MAX – can outdo the other in creating the most outrageous display.
One conclusion! He who has the best POS wins the battle for the customer’s dollars.
My conclusion is that some TV advertising executive finally realized that spot TV beverage advertising’s best days are in the past. A sort of “Jump the Shark”  moment in TV advertising. The use of Snoop Dogg rapping “I’m up to my knees in zero calories,” may be just such a moment.
Even if my analysis is not 100% correct, it seems to me that Pepsi’s own explanation reaches a doubtful conclusion:
“The Pepsi Max driver and the Coke Zero driver meet once again – this time at a supercenter. The battle for the #1 zero-calorie soda begins as each driver attempts to build the most impressive POS display. A special appearance from the legendary Snoop Dogg makes it clear which cola is king.”
Uploaded to YouTube – by Pepsi.
This commercial makes it clear that the most impressive display is thought to be the most convincing reason for customers to buy Pepsi MAX. That it happens to be a TV ad praising the virtues of a competing advertising medium (POS) somehow strikes me as both accurate and ironic. The only question I have is: "Is the irony intentional?"
Well, that question is beyond the scope of this post. But before I go, I’m required to remind you that over 70% of the decisions to actually purchase your beverage product will occur at the point-of-sale.
I should also mention that our Blog is ‘the place’ on the Internet to learn about adopting tools that help you get the most out of your POS budget.
Finally, to further underscore the point that spot TV ads (especially for beverages) are waning in importance; and at a time when POS promotions seem to be increasing; I have been trying to find someone who has seen the Snoop Dogg Pepsi MAX spot on TV. No success, yet. Even my wife had never seen the ad until I showed it to her at the following YouTube link:
– Mark Fullerton
For more information about our products go to: www.ontraksoftware.com/products or call 800.513.9194.
 The usage of "jump the shark" has broadened beyond its initial use in television, indicating the moment in its evolution – characterized by absurdity – when a brand, design, or creative effort (in this case a soft drink commercial) moves beyond the essential qualities that initially defined its success, beyond relevance or recovery.
A Collection of Thoughts about Marketing at-Retail
The following “thoughts” were plucked from a wide variety of sources on the subjects of:
As well as books on the subjects of:
Much, if not most, of the source materials for this posting comes from an organization called Point-of-Purchase Advertising International (POPAI): The Global Association for Marketing at-Retail. A bibliography follows the final thought, below.
Marketing at-Retail’s Influence on Purchase Decisions at the Point-Of-Sale
Strategically placed displays and retail signage promote what’s new, inform, educate and, most importantly, influence customers’ buying habits at the critical point-of-sale.
Most new products get lost at retail and are never considered, particularly those in frequently shopped categories such as beverages . . . where purchase decisions are habituated and not actively thought out at the shelf.
Measuring your retail signage is vital because you need to know which of your signs are performing well and which aren’t.
How do we get shoppers not to edit out messages that we spend millions to communicate at the store level — once they cross the threshold of retail? Dynamic content and an ever changing and engaging retail environment is the key.
The question is not an either/or, but holistically looking at how all the media can work together — from the shopper fact finding stage (internet research, couponing, television and print ads), to the delivery to the store aisle where any robust consumer decision tree will tell you a sale can be won or lost based on in-store stimuli [POS] and the hierarchies that are important to consumers.
Something happens when a consumer embarks on a trip to the store– they change from consumer to shopper.
As Dr. John (famous New Orleans Jazz and Funk Singer) once said, “I been in the right place, but it must'a been the wrong time.” There is no question Marketing at-Retail is the “right place.”
Consumers continue to opt-in for the most interactive of experiences – shopping. And, with 150 million consumers walking through a Wal-Mart every week, consumers are doing so in large numbers. However, until recently, it was the wrong time for shopper marketers. Given the mass reach, prominence and glamour of traditional advertising, Marketing at-Retail was relegated to a secondary service function within marketing organizations.
Things have changed. Almost every day marketing executives are reshaping their organizations to create a tighter focus on this key area – Marketing at-Retail.
They call it variously Shopper Marketing, Shopper Intimacy, Point-of-Purchase (POP), Point-of-Sale (POS) – and today, we call it Marketing at-Retail. For manufacturers, suppliers, distributors and retailers committed to getting results and maximizing ROI, the potential for actively engaging shoppers at retail is enormous.
– 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.
Point-of-Sale Marketing – What, or What Not, to Outsource
As we kick off the New Year, let’s hope that the early, positive signs in the economy, and the alcohol beverage industry, continue throughout 2011 and beyond.
In discussions with prospective customers, and while conducting numerous product demonstrations, we hear the same questions regarding print shop and graphic department operations:
“Should I outsource my graphics department?" and,
“What are the pros and cons of outsourcing menu creation and other point-of-sale promotional materials production?”
Perhaps you should be asking two other questions.
Is Point-of-Sale Marketing Critical to Your Business?
Despite the obvious similarities between Beer, Wine, Spirits, and other beverages distributors, there is no “one-size-fits-all” answer or strategy. Here’s why: What is perceived to be a core function by one company is considered a commodity service - non-core function - by another.
Simply put, only you or your company can determine the relative importance of designing, creating and measuring the impact and efficiency of your point-of-sale or at-Retail marketing campaigns and initiatives.
Our customers and prospects - alcohol beverage distributors from all over the US - typically tell us that POS, POP, and menus – whatever they call it – is a core function in support of the Mother of All core functions, sales. The ability to create custom promotional materials right now, and not next Tuesday, can be the difference between a sales lift or a sales drop.
Our customers say that their brand managers, team leaders, sales reps and customers depend on technology to keep retail shelves full of the right products along with their supporting promotional materials. And they want those marketing materials to be fresh, prominent and persuasive.
Of course, here at OnTrak, we’re biased. But if you’ve decided it is critical to your company, then we have software solutions to help.
Can I Outsource My Mess for Less?
Since a growing number of OnTrak customers have tried outsourcing and decided it didn’t work for them, they caution anyone who will listen that thinking you can "outsource our mess for less" is wishful thinking.
There is no right or wrong answer here. It's important to be sure you have all the information you need to support making the best decision for your company. Unbiased information which helps you understand the pros and cons of keeping or outsourcing your graphics and print operations.
We’ve put together a free white paper on this increasingly important subject. Click on the link below to have it immediately sent to you.
We wish you a prosperous 2011.
Link to Outsourcing Your Print Shop - Pros and Cons:
– Mark Fullerton
Alcohol Beverage Distributors – The Recession May Be Over. Now What?
In much of the US we’re still seeing 10% unemployment and nearly that much in under-employment. And that doesn’t include those folks who have simply stopped looking. So, while it is technically correct that the US has been out of recession for nearly a year and a half, the reality is that we’re in a long, slow recovery that still feels like a recession.
Now, what does this have to do with our typical post here on the OnTrak website?
Plenty! Despite what may feel like a permanent downturn, the reality is our economy is turning around. The fact is we are growing again. So…
Is your company ready for the recovery?
There are ways to help you evaluate your readiness for the “Great Recovery.” It’s not too late for you to take the following three steps, to position your company for “your end of the recession.”
1. Measure Your Market
If you have cut your customer research activities and budget, you now need to invest the time and money to know how your retail customers (and their customers) responded to the recession. It is unlikely that the end-consumers of your beverage products will return to their pre-recessionary buying habits. You need to know now, more than ever, how alcohol beverage consumers redefined their priorities during the recession and how they now value the beverages they consume – your products. Price sensitivity, one of the hallmarks of the recession in terms of consumer behavior, may linger for years even after this current downturn becomes economic history.
For example, consumers will likely take more time deciding what to buy at the point of sale. They will be more willing to postpone purchases, trade down, or simply buy less. New brands will require more Marketing at-Retail initiatives – including POS signage and beverage menus – to encourage consumers to take a chance on them. Remember, it is hard to manage what you don’t measure.
2. Manage Your Products
Working with your retail customers, you must test the impact of your Marketing at-Retail programs; and, using the data from these tests, forecast demand for the products you represent. This way you will be able to respond as the end-consumer trades down to brands that stress value or “price performance.”Hard times often favor products perceived as “good-enough” over ones considered great. Among national beer brands for example, Natural Lite has gained share at the expense of Bud Lite.
The weakest items in your portfolio should be candidates for dropping. New products, especially those that address the new consumer reality and put pressure on more established competitors, should still be introduced, but Point of Sale advertising should stress value and exceptional price performance, not brand image.
3. Don’t Cut, But Rather Maintain Marketing Investments
Although it is easier to say than do, the past two years were not the time to cut your Marketing at-Retail investments. Likewise, now is not the time to cut POS advertising and investment in new technology to help you Manage, Control and Measure your Marketing at-Retail initiatives. By now you have probably seen the results of studies that point to the successes of brands that maintain or increase their Marketing at-Retail spending during a recession, especially when their competitors cut back.
Those brands that maintain or grow their point of sale promotions typically improve their market share as economic good times return. Beleaguered consumers need encouragement at the point of purchase – they need information to inform and persuade them that they are getting the best value and the lowest price. This information, of course, has its greatest impact at the time and place of purchase.
Indeed, now is the time to increase your Marketing at-Retail spending as better economic times are poised to return. If you have cut your Marketing at-Retail investments, now is the time to invest in the tools to help you manage, control and measure the impact of your point-of-sale marketing programs. Using these tools will allow you to increase the use of POS that returns the most immediate and improved sales impact.
Point-of-Sale Business Intelligence
A Starting Point for Marketing at-Retail Improvement
If you are a supplier, distributor or retailer, you know that point-of-sale (POS) marketing initiatives can be used to build brands, develop customer knowledge, and drive sales.
Using Business Intelligence tools, alcohol beverage wholesalers are learning how they can improve Marketing at-Retail intelligence and remove wasteful POS spending. In 2008, at the NBWA’s annual conference, it was clear that Business Intelligence was the top technology that wholesalers were beginning to investigate and evaluate. Now in 2010, it has almost become obvious that business intelligence, when applied to Marketing at-Retail efforts, has become one of leading and most effective tools for alcohol beverage wholesalers. Armed with this useful information they are able to reduce wasteful POS spending and to improve the impact of POS materials in retaining and growing market share.
As a wholesale distributor, you know that your retailer’s main goal for market intelligence – as it applies to POS materials – is customer demand. Retailers want the ability to rapidly respond to and influence customer demand for the brands they carry. As a wholesale distributor, it is likely you share these same goals.
After responding to and influencing customer demand, retailers want all the business information that they can get their hand on about their POS promotions. Armed with that intelligence, they can make business decisions to improve customer retention and loyalty, and to increase customer sales.
Based on these goals, there is pressure on the distributors to improve their own at-Retail marketing intelligence to react to and better predict retailer demand. For distributors, pleasing their retail customers builds stronger relationships, and can turn small purchasers into volume customers. In today's highly competitive environment, the retailer often has many options, so maintaining and exceeding your retail customer’s expectations is critical for the distributor’s continued success.
Our POS Best Practices Presentation for alcohol beverage distributors is currently available, by request, from this website. This 15-minute self-running, narrated slide presentation is a great introduction to managed, controlled and measured Marketing at-Retail concepts and practices. Our presentation is the result of over 6 years of working with wholesale alcohol beverage distributors.
It’s a compilation of the best practices for creating Marketing at-Retail value through information technologies, from some of the largest and leading alcohol beverage distributors.
Please click here to request your free copy of our POS Best Practices Presentation:
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.
Lowering Costs with a Managed, Marketing at-Retail Solution
Remember 2005, 2006 or even 2007? Those were the good ol’ days (the money tree days) – profitability was often great, and consolidation actually had worked, so far, in your favor. Managing a profitable distributorship was a lot easier when the economy was strong, unemployment was low and consumers, apparently, were actively looking for the next premium grain, grape or malt beverage. Things have changed – in today’s economy, smart business owners must find ways to cut costs, improve productivity and simultaneously acquire tools that will provide competitive advantage both now and later, when the economy inevitably recovers.
In response to today’s tougher economy, Alcohol Beverage Distributors of all sizes have started adopting efficiency measures in all areas of their operations. For example, fuel costs, often the number two or number three expense item for distributors are being addressed via fuel buying programs and, even by deploying technologies that can increase diesel engine efficiencies to 95% (a 20% improvement.) Some distributors have tackled lighting costs by switching to “green technology” lighting. A distributor told us that by switching from conventional to green lighting, energy costs dropped substantially as did the carbon footprint of their facility.
Other areas where distributors are improving their efficiencies include the adoption of warehouse management, route accounting, e-commerce, and other distribution execution applications. Mobile technology deployment (netbooks, for example) has been on a tear, too, fueled by rapid advancements in capabilities, universal Internet access and slashed prices.
Finally, dozens of distributors have recently adopted promotional management systems to help them lower their Marketing at-Retail expenses. These point-of-sale (POS) initiatives are often a distributor’s number two or three expense item.
With a POS management solution, you can:
- Reduce sign and menu reworks by as much as 98% and dramatically lower your POS costs
- Produce 15% - 20% more signs with your existing resources
- Improve POS time-to-market by days over your competitors
- File and receive your marketing co-op recovery allowances automatically and rapidly
I’ll discuss these benefits in Part 2 of this blog.
– Mark Fullerton