Draught Line-Cleaning – Part 1 – The Problem
What does it take to keep great beer, tasting great?
I’d like to use this blog to introduce and describe an issue – actually a problem – in the draught beer industry – And more importantly even if you think this is not a problem for you, why you should care.
The Current Situation and Background
According to Anheuser-Busch’s “Beertender Guide”, on premise beer draught lines need to be cleaned on a regular basis to prevent flavor deterioration.
In some cases, this requirement comes from the distributor’s primary supplier; from retailers; from state and regulatory bodies, or from the distributor’s own business “best-practices”.
In some states, such as Ohio and New York, the local board of health requires the retail establishment to clean their draught lines, however, there is no regulation preventing the retailer from having the cleaning performed by a third-party.
Other states, such as Texas, require the wholesale distributor to clean the lines. In many states, distributors offer draught line cleaning to their retail customer in order to gain competitive advantage and retain customers. Regardless of the reasons behind performing tap line cleaning, the consensus is that draught lines must be cleaned at least 26 times per year, or a minimum of every two weeks.
For many distributors line-cleaning is their responsibility. For all distributors, line cleaning – regularly and correctly performed line cleaning – certainly is, or at least should be, their concern.
According to DraughtQuality.org:
“The number one factor affecting draught beer quality is poor hygiene. Whether you’re a brewer, wholesaler or retailer, you must be vigilant in making sure lines are cleaned properly and regularly. Poor hygiene and improper cleaning and/or rinsing will result in loss of sales and reflects poorly on the entire industry.”
Additionally, there can be legal consequences associated with not cleaning or improperly cleaning draught beer lines, to say nothing of the potential health issues. Suffice it to say that dirty draught lines do not paint a pretty picture, both literally and financially for beer companies, be they suppliers, distributors or retailers.
Why Should Draught Line Cleaning Be Important To You?
As a bit of a refresher on why you should line clean, consider:
Beer is “alive”!
Much of what we enjoy about beer is derived from the fact that beer originates with organic compounds including yeast. When beer is pumped from kegs through lines to the tap, new, unwanted, yeast and bacterial organisms find their way into the lines where they can be said to literally feast on the beer flowing through them.
Over time these living organisms as well as minerals begin to attach themselves to and clog the draught lines. From time-to-time these line deposits can come loose and actually end up in the consumer’s glass. It’s not a pretty sight.
What Happens The Moment Beer Begins To Flow Through Lines.
All of the surfaces the beer touches begin to have bacteria grow on them. In as few as two weeks, the bacteria and mineral deposits adversely affect the beer’s taste. If the lines are cleaned using the appropriate cleaning solution and method, both the build-up of deposits and the flavor destroying bacteria are flushed out of the system.
Line cleaning is not typically difficult, dangerous or time consuming. And, although there is – for either the distributor or the retailer – some cost to the process, line cleaning is, in the bigger picture, not prohibitively expensive.
As a supplier, distributor or retailer, you have an important interest in making sure line cleaning is done with near-fanatical regularly and is performed absolutely correctly. It is, hopefully, obvious by now:
Dirty draught beer lines don’t save money – they cost sales. Should a patron take a big gulp of dirty beer (or as one distributor called it “chunky-skunky beer”) you could have a law suit on your hands.
In case I haven’t made the case for clean lines based on some rather unattractive outcomes, know that clean draught lines helps your beer keep its taste and looks; and, clean lines actually will reduce waste by virtually eliminating re-pours to unhappy or grossed-out patrons.
So there’s the Problem, or maybe the opportunity.
One of the top challenges of a beer distributor is that while they have put in place a line cleaning process, the really don’t have a good solution for tracking what has happened. And this is the case whether they do the line cleaning with their own people, or outsource the line cleaning to a third party.
Ultimately The Distributors Are Responsible
What if there was a solution for keeping track of all the activities that are required to effectively and efficiently manage to the line cleaning requirements that come from suppliers, retailers, or state regulations?
Or what if you want to put in place a “best practices” approach within your own business to service your customer’s expectations?
Well that’s what our Next Blog Topic will discuss – “Draught Line Cleaning – Part 2 – Possible Solutions”.
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We Need Your Feedback
If given all the resources to develop an “app” for the tracking of line cleaning, what would it look like?
The first step in that process is to gather requirements, and you can submit your requirements by commenting on this blog.
We welcome your feedback. Perhaps it will lead us to developing that “app” for you!
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To learn more about OnTrak and the current solutions we have developed for beer distributors to track and manage their printed and permanent POS, please click this button.
The Changing Face of POS Marketing – Or At-Retail Marketing
One Thing We Know For Sure
There’s one thing that we should get out of the way from the start:
Marketing messages, delivered at the point-of-sale, are more important to increasing sales and building brand and product identity than ever before.
So, what do we mean when we say point-of-sale (POS) marketing?
For us at OnTrak, as well as with our prospects and customers, point-of-sale marketing – or just “POS” – means virtually anything that is used to promote brands and products to the retail consumer at the place where they buy.
This message has become stronger and stronger as we have met with more and more beverage alcohol suppliers and distributors over the nearly 8 years we’ve been in business.
Types of POS Marketing Materials
In the case of beverage alcohol, POS includes both temporary printed signage – typically produced by distributors in their own print shops, and permanent signage – acquired by distributors and loaned to their retail customers.
A broader definition and utilization of permanent POS materials includes displays, lights, umbrellas, glassware, mirrors, coolers, cabinets, table tents, chalkboards, logoed apparel, door pulls, tap pulls, coasters, bar-mats, corkscrews and bottle openers – and the list goes on.
Increasingly, food and drink menus – supplied and usually financed by distributors – and B2B product samples can also be considered POS marketing or promotion. Beer, wine and spirits B2C tasting events could be included in the POS marketing-mix basket.
The Cost of POS
It is true that some of the POS that distributors place is almost certainly a total waste of time and money – and it’s not an insignificant amount.
The average paper or Coroplast sign created by every beverage alcohol distributor in the US costs between $30 and $50 each. It is not uncommon for a 5-million case malt beverage distributor to generate between 10,000 to 25,000 signs annually. Many of our customers generate over 100,000 signs every year – and every year their cost of POS increases.
To put this in greater context, the beverage market comprises about two-thirds of the two-trillion dollar US CPG market. POS for these products certainly appears to be where the lion’s share of the approximately $20 billion per year, at-retail marketing expenditure is going.
So, why am I suggesting some POS spending is probably ineffective and wasteful?
Simply put, my opinions are based on both an assumption and an observation that most beverage alcohol distributors, and their suppliers, don’t have an accurate ROI measurement of their current investment in POS.
This despite the fact that there are POS tracking tools available, that when coupled with a distributor’s existing product, customer and route accounting systems, will provide them with the data necessary to measure the effectiveness of their retail marketing campaigns.
Here’s what is even more confusing: Distributors continue to increase their spending on POS because their customers and suppliers “urge” them to do so. In some cases it’s a mandatory requirement. On the one hand, the increase in POS spending is perhaps a good thing since POS does work to increase sales and brand awareness. On the other hand, this increase in POS spending may be unnecessarily wasteful since much of it goes unmeasured and unmanaged.
But regardless of the costs, it is also true that POS works.
Many notable studies conducted by the ANA, AT Kearney, CGT, GMA, P2PI, POPAI, and Shopper Marketing Magazine have documented the effectiveness and efficiency of POS marketing for all consumer packaged goods. (See Note) These impressive companies, have studied POS effectiveness, and their analysis proves that POS works.
We believe most beverage alcohol distributors use POS both offensively and defensively. But we also believe POS is really a competitive tool. So, while distributors may be increasing their spending on POS, they also need to track, measure and manage POS effectiveness and ROI, and recover more of these increased costs from their suppliers. If you’re not addressing the whole POS life-cycle, then you’re likely to be spending more and valuing POS less.
Today, the American consumer is much less likely to be stimulated into buying simply by seeing paper or permanent signs, mirrors or glassware displaying a brand’s logo. Part of the reason for this is the proliferation of the number of beers, wines and spirits. Craft beers and spirits have rapidly increased in number, and ironically both shoppers and consumers, who may not be the same person, now look to POS materials to educate and inform them about beverage products in the bottle, not just a creative name and logo. This same thinking can be applied to wines, now that we have surpassed 105,000 wine labels available to consumers.
Traditional, “image building”, POS may not be sufficiently influential today. With well over 200,000 beverage alcohol products, and many more non-alcohol beverages available to the American market, today’s beverage buyers at retail outlets, bars and restaurants are seeking more facts before they spend $11.00 on the latest and greatest 4-pack of beer, or $10 on a pint, to put a finer point on it.
The current opportunity is to use POS marketing as the most efficient way of communicating the information retail customers demand before they take a chance on your brand or product. If you use and measure your POS marketing materials appropriately and effectively, you will stand a much better than fighting chance of success.
How OnTrak Helps
I’d be remiss if I didn’t remind you that OnTrak offers a suite of POS tracking, measuring and managing applications (SignTrak, PermaTrak, MenuTrak and SampleTrak). These solutions can be deployed in a few weeks, and cost less than you might think. On average less than $15 per month per rep and merchandiser.
To learn more about OnTrak and our POS Tracking Software, please click this button:
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Note: ANA: Association of National Advertisers; CGT: Consumer Goods Technology; GMA: Grocery Manufacturers Association; P2PI: Path to Purchase Institute, POPAI: Point of Purchase Advertising International.
You’re Spending More on POS Marketing Than Ever – Now What?
The State of Today’s Retail Marketing Technology - Or What OnTrak Software Can Do For You.
Every Beverage Supplier and Wholesale Distributor is interested in capturing more market share and increasing sales. By now, we all know: One of the best tools available to attain these goals is an effective and efficient at-retail marketing campaign - aka point-of-sale (POS) Marketing.
POS Marketing and the Beverage Industry
About six years ago, our research regarding at-retail marketing uncovered US annual retail marketing spending of over $19 billion. Similar research undertaken today identifies that current spending on at-retail marketing has grown to more than $25 billion – an increase of over 30%! Now, your beverage alcohol company may not be spending 30% more on POS marketing today than it did in 2009, but it should not come as a surprise that you are very likely spending considerably more now than you spent then.
Based on several expert, retail marketing organizations’ research, it is also very likely you will be spending more in the upcoming years than you are spending now. This increase in spending is driven by the simple fact that POS marketing works to drive additional sales, often in the form of what POPAI calls unplanned purchases. This is especially critical for items where several substitutes are available to the shopper. Some of the best Consumer Packaged Goods to point to are beverages, since they make up nearly two-thirds of all CPG spending.
Assuming you agree that you spend “a lot” on POS marketing, what can you do to make certain you’re getting the best return on your retail marketing investment?
As we’ve said here before in our blog entries, you can’t manage what you don’t measure. Yet, measuring the impact of POS will be no less difficult than measuring almost any other data-driven function in your company – without the proper tools, that is.
The Impact of Technology
Retail Marketing Technology is the key to measuring the impact of your POS initiatives across brands, customer groups and of course across the various types and placement of POS materials. This means, for example, that your sales reps and marketing and merchandizing people can meet with your customers armed with accurate POS marketing data. Current and accurate data can then be leveraged to assist you in planning increasingly successful upcoming promotions.
As suppliers and distributors working with your retail customers, you may, over time, prove that your POS strongly correlates to an increase in retailers’ sales. This may then open the door for your reps to lobby for increased store inventory levels, decreasing the likelihood of outages of your brand.
With measured POS, suppliers and distributors both win – as do your retail customers and their customers.
Building the ‘Rep’ of Your Reps
A common perception in the world of beverage alcohol distribution is that a distributor’s sales reps can be perceived as spending more time ‘taking orders’ rather than ‘adding value’ to your customers by offering and selling your brands..
Adopting retail marketing technology is one clear way to build a sales representative’s credibility with your retail customers as more than an order taker or inventory control administrator.
The data your reps can provide will be, over time, seen by your customers as actionable, thereby helping prevent out-of-stock issues for the retailer. To restate: As the value of this POS marketing data is recognized, your retail customers will start seeing your reps less as order takers and more as providers of innovative marketing approaches. Your reps will become Sales Representatives in the most positive sense of that description.
The Right Answers for Your Customers, At the Right Time
As a supplier or distributor who invests in retail marketing technology, both you and your retail customers will realize greater sales productivity and capture increased market share. As a result, you will improve your capacity and capability to perform in the role of a consultative seller because you have measured the performance of your POS marketing campaigns and materials. The bottom line is that through the deployment of technology, including data-driven analytics, you and your sales reps can deliver the right POS marketing at the right time.
For more information on how you can find retail marketing technology solutions to help you help your retail customers convert their shoppers into click the following button:
Why There Are No Ratings, Reviews and Pairing Suggestions On Wine Menus
This blog entry continues the thoughts about adding information to your wine menus that were discussed in the prior blog entry.
So to continue the theme, I finally received some explanations as to why there is virtually no information (or ratings, reviews and suggestions) provided for wines on a restaurant’s wine menu – Even though these wines are often priced at hundreds of dollars per bottle.
I’ll let you be the judge, and invite your feedback, about the applicability of the explanations and the appropriateness of the explanations, including my own, in determining a course of action for your restaurant or, perhaps more importantly, your distributorship.
It Makes No Sense Not To Include The Information
With well over 100,000 wines marketed today in the US alone, my premise in the previous blog was that it makes no sense not to describe the wines on a menu in a fashion similar to the way the food items on a menu are described.
In fact, I’d go so far as to say, most people really don’t need much of a description for a NY strip steak, lobster or even a Berkshire pork chop on a restaurant’s menu. On the other hand, the description of a wine’s taste, rating and a suggestion of what it might pair well with, seems to beg to be included on the menu under the wine’s vintner, primary grape, vintage and retail price – especially on today’s hundred-plus bottles wine lists.
Here’s Some Reasons For Not Including The Information
An explanation of why there has been little to no information about the wine on the menu – even though it is quite possible that one bottle of wine is priced as much as or more than all of the entrees at a table – goes something like this:
Selling a bottle of wine in a restaurant increases the wait-staff’s interaction with customers, which will likely drive up check sizes. The key word in that explanation is “selling.” Most servers are well-versed in the food items on the menu; yet, it is not uncommon for servers to know little more than the differences between a red and a white and dry vs. sweet wines.
Recently I had a server suggest pairing red wine with meat and white wine with fish. I actually pity the server who, in the spirit of being helpful, makes a wine suggestion that turns out to be unpopular with a patron.
Nevertheless, according to restaurantowner.com:
“While a server is opening and serving a bottle, he can interact with guests, make food menu suggestions, and create opportunities for further sales. By freeing the bartender, you give him more time to spend with guests at the bar, which creates fatter drink tabs.”
Well, that much is undoubtedly true, but this certainly places a lot of pressure on a server to pick just the right wine for the meal – A server who may never have tasted most of the wines on the wine list, and can’t pronounce many of them.
That further explanation, from "restaurantowner," does go some distance in explaining why you might not want the wine menu to provide tasting, rating and pairing information about the wines on the menu. But, what is required to pull this off is a wait staff with at least some depth of wine knowledge, so they can make “informed” suggestions when asked “What wine would you recommend with our meal?” This may be the most dreaded question ever for many servers, I’d imagine.
A Sommelier May Be A Solution – Maybe?
Some, but not many, distributors have taken this “interaction with customers” explanation further still, suggesting that instead of putting some basic description of the wine on the menu, that the restaurant will sell more wine and increase interaction with their customers by employing a sommelier.
Not knowing, at least at first, what the going salary range for a sommelier is, I started looking into the subject.
First, I found an article in Forbes magazine – “Unusual Jobs That Pay Surprisingly Well”
According to this 2012 article, a sommelier earns $80,000 to $160,000 per year. Upon further review, I found salaries can actually be somewhat more affordable for a sommelier who has not earned the title, “Master Sommelier.” An up-and-coming or “less experienced” sommelier can earn about $60,000 per year.
Here’s another tidbit:
There are only about 120 Master Sommelier’s in the US. My translation: Good sommeliers are a rare and hot commodity, and even inexperienced ones can be expensive.
I would assume that having a sommelier probably would increase a restaurant’s wine sales, perhaps dramatically. At those salaries, they would have to. Conversely, as I re-read the Beverage Dynamics April, 2015 issue regarding the impact of offering wine information as part of the wine menu, I focus on the claim of a 20% increase in wine sales simply by adding wine reviews, ratings and food-pairings to the menu. I also am reminded that, for many restaurants, the wine menus are produced for them by their wine distributors at no charge.
It seems to me that only a very few restaurants (less than 1%) are in the position to afford a sommelier; and, for those that can afford it; the ROI has to be there. For the vast majority (the other 99%) of white table cloth restaurants, perhaps – adding wine ratings, reviews or food-pairing information certainly would seem to be a cost effective way to increase wine sales, perhaps dramatically so.
So What’s The Answer?
You make the call, but from my perspective, unless you’re in the “1%”, investing in more informational wine menus may be the easier answer for you. Why not try it!
For more information on OnTrak Software and MenuTrak, in use by three of the Top Ten US Wine & Spirits Wholesale Distributors click this button:
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.
Point-of-Sale (POS) Marketing - Focus on What’s Important and What Works to Achieve Your Business Goals
POS Marketing in the beverage industry means so much more than discounting and loyalty programs. It means managing, controlling and measuring the marketing at-retail process for ordering, producing and placing custom and permanent signs, beverage menus and beverage samples.
The decision to buy a beverage is made within seconds of entering a grocery aisle, or shortly after sitting down at a restaurant table. Only then is the effect of outstanding marketing at-retail clearly understood and appreciated.
If you are a supplier or distributor of beverages, for our purposes and our target prospects and customers, I urge you to write down at least one or two of the goals you have for your company. Looking over these goals of most beverage companies it is not surprising to see “growth” at or near the top of the list.
I’m going to assume growth means “more revenue”, and any elaboration on that theme would include the condition that top-line growth “will not come at the expense of the bottom line,” or would simply be stated as “improved revenue or profit.”
What POS Works?
In this blog we won’t come close to exhausting the subject of the importance of putting point-of-sale (POS) marketing materials, campaigns and promotions first.
Rather we’ll spend our time on suggestions that are focused on What POS Works. But don’t forget that POS initiatives are the key marketing measures you should be taking if your goals include “improved revenue and profit.”
The Consumer vs. The Shopper/Buyer
Much is written about the consumer. But it should be noted that the consumer is really only relevant to you if the shopper/buyer of your beverage is also the consumer. It’s not that the consumer isn’t important or relevant; it’s just that unless the consumer executes a shopper’s specific behavior, like choosing and purchasing your product from the retailer’s shelf, it doesn’t really affect your sales.
Without the purchase of your product, consumption just isn’t possible, obviously. This means that you must focus on the shoppers when they are at a place and time where and when they can and want to buy.
If you’re a beverage distributor, your reps probably have it fairly easy getting orders from retailers for the products you sell. In fact, if ordering products was all there was to “success” in selling beverages to Kroger’s or Piggly Wiggly, you could argue you don’t really need an order taker. On-line order taking could certainly be employed simply to place an order for let’s say 144 cases of beer.
Your rep’s real value lies elsewhere – certainly as the retailer is concerned and perhaps even more so for you, the distributor. Assume for a moment your rep “sold” 144 cases of one of your products to your customer, the retailer. Next, think what happens if the retailer doesn’t sell your product to his customers - The individual shoppers who walk the aisles looking to buy all kinds of products, including yours.
If your products don’t sell, the retailer may simply ask you if he can return the products purchased from you and receive a credit.
Now, here, we’ve reached a point where we could provide much more information regarding the mind or even the habits of the shopper. For the purpose of this blog we won’t go into that.
Three Effective POS Marketing Strategies
If you’ll accept the fact that you do need a particular message at the point of sale in order to increase sales, we will present three effective POS marketing strategies you can employ. We’ll also suggest a method for demonstrating what POS marketing materials really are most effective and provide the highest ROI.
1. Establish Brand Affiliation
If you work for a beverage alcohol distributor in marketing communications, custom POS design and development, or in the sales department, it is important that you think about your POS displays as the “always-on” promoters of the benefits and value of the product you are promoting. If the product is from a well-known and successful brand, it is also important to associate the product being promoted by your POS initiatives/materials with the Brand.
2. Focus on the Product - Focus on the Reason to Buy
Every POS sign or display should be produced to achieve the goal of selling more of the specific product being advertised. Typically POS is not designed with the goal of strengthening Brand Identity or a Brand’s Message, especially if the product being promoted is from a well-known and popular brand.
If your POS’s primary purpose is to announce a new or lower price in order to stimulate sales of an existing product; or grab market share from a competitor; or to introduce a new product from a well-known brand; it is important that your POS focuses on the product and price as simply as possible, and not so much the Brand.
If price is often used to sell your product, make sure the POS materials are as clear, clean-looking and simple as possible in identifying what is on sale, for what price and for how long. Product benefit messages are not important here, and they would actually distract from the selling point in this case - Low Price.
3. Bigger is Better - Less is More
Remember, when ordering POS for your retail customer, the product’s category and the number of products that you will be in competition with for the shopper’s attention. If the product’s category has many items, it has been demonstrated by our customers that one or a very small number of large-scale impressions (signs) increase demand more than many smaller impressions with a similar message. Shoppers see dozens, often hundreds of POS messages per trip to their favorite retailer – and many shoppers tune out all but the biggest impressions.
The OnTrak Solution
Without tracking, measuring, and visual verification to prove placement, the above three strategies will, generally speaking, work in some fashion.
But you won’t really know what worked best or even when. Therefore, to optimize the effectiveness and ROI of your POS marketing campaigns, you will need a system to help you track, measure and manage your POS initiatives from ordering, through production, placement and replacement.
To learn more about the OnTrak Solution, please click this button:
The Key to a Point-of-Sale (POS) Marketing Tracking System: Business Intelligence!
If you’re a wholesale distributor of beverages and an OnTrak application software user, I’m going to assume that by now you are either an expert or well on your way to becoming an expert in POS tracking.
This includes the accurate and efficient capturing your POS promotion orders from your sales reps in the trade, and approving, assigning and producing your orders once they have been accepted.
I’m also going to assume you’ve become quite adept at creating ad hoc reports requested by distribution sales management and your supplier’s sales managers.
Now, I’d like to take your expertise to the next level.
POS Business Intelligence – What Is It!
I’d like to offer you suggestions on increasing the value of your POS marketing campaigns by using the data stored in the OnTrak applications to create POS Business Intelligence
POS Business Intelligence can take the form of a report or a screen view that causes someone in your organization to take action to achieve a certain, hopefully beneficial, sales outcome. If you’re like most system’s users, much of the reporting and other information that comes from just about all application software is of the “good to know” variety. This isn’t meant to suggest that data that is used to provide confirmation of an event or fact, or produce invoices and other outputs, like picking tickets, purchase orders and shipping manifests, is without value.
Rather, it is meant to suggest that systems like MenuTrak, PermaTrak and SignTrak, can be used to generate information that can help you increase your productivity (sales or ROI) and decrease the potential negative (out-of-stock items) of your POS initiatives.
Beverage distributors, especially those who both create their own temporary POS and buy permanent POS promotional materials, face a unique challenge – and likewise have a unique opportunity. A challenge and opportunity that their suppliers may not typically see with respect to POS promotional campaigns.
POS Promotions Work
As you know, POS promotions work. If your beverage distribution organization creates and places signage – or other forms of POS including menus, tap-pulls, lit or moving permanent signs, etc. – history suggests sales of the items being promoted will most likely increase. And, if your POS informs shoppers of a sale price, increased sales are a virtual certainty.
Most beverage distributors manage thousands of SKU’s these days; and they also must constantly manage multiple POS promotions. Even though distributor route accounting systems (RAS) usually have some form of inventory management application, retailer stock-outs can occur and are more likely when items are promoted at-retail, using POS signage.
Due to the effectiveness of most POS materials, when items are promoted at-retail there is a chance to make extra profits or a chance to lose potential sales. The question is: What can you do to facilitate the former and eliminate the latter?
Tracking and Managing the Impact of POS Promotions
The answer to that question requires that you have a system in place that allows you to track, measure and manage your POS activities. POS promotions typically create special selling situations and the potential for out-of-stock situations. These stock-outs, or lost sales, can be mitigated by correlating historical POS promotional data available in OnTrak applications, with the sales data collected and stored in most route accounting systems’ data bases.
Distributors are uniquely positioned to know where, at individual customers, the POS materials have been placed, and by reviewing historical data will also know the likely impact of a certain type or style of POS and the impact of the message conveyed. Using the data from the POS management system correlated with sales data from the RAS system to forecast “demand during a promotional period,” stock-outs can be substantially reduced or eliminated, thus improving the quality of future promotion period forecasts.
One OnTrak customer determined that there was a measurable improvement in sales when they shifted their POS promotional approach from “several small” to “fewer large” signs. Now, when they plan for a POS campaign, they know “bigger is better and less is more” in terms of the impact on sales.
They use key OnTrak data elements correlated with data from their RAS to determine the required product order quantity, for each customer where there will be a POS promotion, based on historical information. In other words, they use OnTrak POS data correlated with sales data collected during the promotional period from their RAS system to create Business Intelligence. In their case, the actionable information has substantially reduced the number of stock-out’s their retail customers experience.
Naturally, the reduction of stock-outs increases both the retailer’s and the distributor’s sales and profits; and sales forecasting accuracy is improved for subsequent POS promotions. Of course the increased sales will be noticed by the distributor’s suppliers. Beyond the obvious benefits to all members in the supply chain, additional benefits accrue to distributors. Since suppliers are often co-opting promotions, or paying some or all of the distributor’s costs, the reporting capabilities provided by the OnTrak POS management system can assure them that they are receiving full value for their promotional spending.
By now, it should be clear that the “secret sauce” that will improve the productivity of your POS initiatives is the data that is used to create actionable information – reports using the distributor’s RAS sales data correlated with POS promotional data stored in every OnTrak application. Because distributors using virtually any RAS system and at least one OnTrak application can better forecast sales increases attributable to POS campaigns, out-of-stocks can be virtually eliminated and the most effective POS campaigns can be employed repeatedly and adjustments can be made as needed.
Improving Relationships with Retailers and Suppliers
Using OnTrak’s applications can increase the retailer’s confidence in the distributor’s sales forecast making it more likely that the distributor can increase the retailer’s order quantities to avoid stock-outs. Suppliers, too, will have increased confidence in the effectiveness of their distributor’s POS initiatives making it considerably easier to pay the distributor’s POS cost recovery claims.
Using a combination of distributors’ RAS sales data, correlated with their POS promotions data to create POS Business Intelligence – in the form of suggested retailer item order quantities – can help reduce stock-outs during promotional periods thus increasing both revenues and profits. Also, such actionable information can take much of the guesswork out of POS campaign planning.
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Point-of-Sale (POS) Marketing First – Every Other Marketing Type Second
Several of the blogs we’ve posted here have suggested that traditional marketing channels should be led by the marketing at-retail channel – also known as the shopper or point-of-sale (POS) marketing channel.
A growing body of evidence suggests that the most effective – and we believe the most efficient – marketing should begin with POS marketing. That means POS or shopper marketing spending should come first, followed by traditional media marketing spending.
Some ad agencies and marketing insiders long ago declared that POS Marketing should only be considered to be in-support of traditional media buys. Today that simply is no longer the case.
Media fragmentation alone – hundreds of TV channels and perhaps millions of web sites – has driven up the costs and increased the difficulty of targeting messages to a specific market. Today, non-traditional media, referring to mobile, social and perhaps most importantly POS marketing initiatives are the media types that have the greatest influence on shoppers becoming buyers.
Beverage Alcohol Industry
Beverage alcohol shoppers become buyers at-retail, not while watching TV or surfing the net or reading magazines and newspapers and certainly not when driving by billboards and other road signs. But, for some reason, marketers spend disproportionately higher amounts on traditional media advertising than on POS marketing. Considerably less could be spent on marketing if more of it was placed where the actual buying occurs. Further, the return on investment for POS marketing would likely be significantly higher.
I would go so far as to say that since the non-traditional media types – especially POS marketing programs – are today the most powerful drivers of sales available for beverage alcohol, POS should be the foundation upon which all other supportive (i.e., traditional) marketing should be built. The focus of a marketing program that has as its primary goal “increasing the top line” should begin at the place and time where shoppers make buying decisions. It should not – as is current practice – end there.
Now, I’d like to make what may seem perhaps a radical suggestion for beverage alcohol suppliers and distributors:
Think: Lead with POS Marketing – Everything Else Follows.
Unfortunately, POS is often referred to – by beverage alcohol marketers – as something they feel they must do because their competitors do it, rather than something they must do to gain a competitive advantage or to increase their top line. The reality is that POS marketing is actually the “X-factor” that converts a shopper into a buyer.
Over the last few years, “Lead with POS” or “POS First” actually has become the battle-cry for a growing number of at-retail marketing thought leaders, such as POPAI, the Path-to-Purchase Institute and Consumer Goods Technology (CGT), among numerous others. But, to be realistic, a POS first approach seems to have remained more in the realm of marketing theory than in actual marketing practice – despite the steady annual increases in spending on POS marketing materials and promotions.
Current research still demonstrates that beverage marketers continue to invest in POS marketing often as an afterthought. A necessary evil it is called by some, or as an add-on to more traditional media spending. For some reason, marketing executives and other practitioners apparently need more convincing to adequately fund and support the POS initiatives that actually help guide the shopper’s steps to the decision to purchase a specific brand or product.
Other than POS marketing, only word-of-mouth is even close in its ability to almost literally cause a shopper to make a buying decision. POS marketing, when done correctly, is always within sight at-retail – the place beverage shoppers go to research and decide to buy your product or someone else’s.
In support of this, a combined 2012 POPAI Study determined 76% of purchase decisions are made at-retail. Even those who discount this percentage agree that marketing at-retail is not something you want as an afterthought, rather POS marketing is something you need in order to win at retail (Note 1).
Grocery Manufacturer’s Association Study
The truth is that “POS first, traditional media last” should be the standard beverage alcohol supplier’s or distributor’s marketing approach. According to Grocery Manufacturer’s Association (GMA) Studies conducted by major accounting and consulting firms over the past few years, even most shoppers believe POS is one of the most important factors guiding their “conversion” from shopper to buyer. Indeed, some of our brand-name beverage alcohol distribution customers believe without POS marketing, their primary brand’s market-share would decline.
Our current viewpoint is that merely leading with POS may not be sufficient for on-going competitive advantage and retail sales success. We now believe that to be successful, beverage suppliers and distributors must think beyond POS first campaigns and start to think almost exclusively about POS marketing as a complete foundation for the next generation’s shopper journey.
Here’s what this means: Today, Shopper or POS marketing, regardless of the budget available to those who conceive and create the end product, is either left unmeasured or is measured as part of the overall marketing budget’s dollars for eyeballs metric touted by advertising agencies.
POS marketing is rarely held up to any scrutiny or accountability, and its ROI is rarely measured. In most beverage alcohol distributors there is rarely much evidence that POS marketing is a core business practice, despite the belief that if POS marketing were to cease, sales would suffer. There needs to be both recognition of and action taken to raise the level of importance of shopper marketing within the organization.
Often, the sign shop manager working for a beverage alcohol distributor is provided virtually no marketing education and often has the job because of a skill or interest level in a graphical production software package. As a result, POS marketing strategies for the most part don’t exist. What does exist is a very expensive production facility staffed by individuals who are either not at all focused or only focused at the periphery on the point-of-connection between the brand or product and the shopper.
Our suggestion: Empower (educate, train, involve in marketing management and sales) your POS marketing materials developers broadly in every aspect of the point-of-connection between your products and the “fourth-tier” – the shopper.
Your beverage alcohol POS marketing materials developers need to collaborate with marketing and sales management and with their company’s suppliers thus helping the sales organization with capturing marketing share and increasing the top-line. Clearly, just investing in POS promotional materials as a defense against your competition is not enough. Today POS or Shopper Marketing is a key driver converting shoppers into buyers.
Adopting POS marketing technology that tracks, measures and manages POS materials can be very beneficial, ensuring the move to POS first and enabling the adoption of Shopper Marketing as the foundation upon which you build all of your marketing initiatives (Note 2). Doing so, too, will create and maintain an advantage over your competitors who have not yet become aware of the benefits that accompany a POS first strategy.
We live in the shopper’s world, a POS world – we urge you to be guided accordingly.
To learn more about OnTrak’s products to help you measure the impact of your marketing investment, please click this button:
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Note 1: “The Shopper Marketing Revolution,” Toby Desforges, Mike Anthony, RTC Publishing, Copyright ©2013
Note 2: OnTrak offers point-of-sale (POS) marketing technology products that can be accessed if users have a connected PC, Apple or Android Internet browser, a user-id, password and a valid subscription. Our products help beverage alcohol distributors track, measure, manage and verify the ordering, fabrication, and placement of POS marketing materials – such as signs and displays. Additionally we collect large amounts of data that will permit our customers to correlate POS marketing initiatives (and costs) to product sales to help determine what POS is the most effective and yields the highest ROI. More information about our products is available right here on this very website.
If You Sell Beer, Wine and Spirits You Can’t Afford Not to Implement Point-of-Sale (POS) Marketing Technology
In The News
OnTrak Software is a Cincinnati, Ohio based company; so we’ll be using Ohio data to guide and support my remarks in this week’s blog.
According to www.cleveland.com - February, 2015:
“Sales of liquor set a record in the Buckeye State in 2014 as Ohioans continued a pattern of drinking higher-quality alcohol, according to the Ohio Department of Commerce. Buyers spent a record $949 million on spirituous liquor -- intoxicating liquor containing more than 21 percent alcohol by volume -- in retail purchases by consumers and wholesale purchases by businesses, such as restaurants and clubs. Total Ohio Liquor sales were $51M above sales for 2013, which also was a record year.”
The same website also reported in June, 2014:
“Ohio's grape and wine industry continues to grow and now has an economic impact on the state of nearly $800 million a year, a new report says. The report, prepared for the Ohio Grape Industries Committee, found there were 175 wineries in Ohio in 2012, an increase of 41 percent from 2008, when the previous study was released.”
To see the full report, Click Here >>
Also, according to the February 11, 2015 edition of CityBeat: Cincinnati’s News and Entertainment Weekly Newspaper, Cincinnati’s Winter BeerFest 2015, held at the Duke Energy Convention Center, will showcase almost 250 different beer related businesses – most of them breweries – featuring “1,000,000 ounces of craft beer!” The paper proudly identifies some 365+ craft beers, mostly from Ohio (and regionally) and also announces greater Cincinnati’s 8 newest nanobreweries.
“In Ohio, 163 breweries support almost 83,000 industry-related jobs, for a combined economic impact of $10 billion; and the number of breweries is growing. The state is among the top 10 in the country for both highest economic impact and most breweries.” – Dayton Business Journal, January 22, 2015.
Getting the Message to the Buyers
Clearly, if you’re a lover of beer, wine and spirits, Ohio is a great place to fall in love. But, besides these eye-opening statistics, I find it almost mind boggling to think how the suppliers and distributors ever expect to get their products known outside of the several “fests” (Cincinnati does have an annual wine festival as you probably imagined).
With a significant and growing number of small breweries and wineries, you just know there isn’t enough in the marketing kitty for any TV spots. So we know that these businesses will be turning to point-of-sale marketing in order to turn shoppers into buyers.
An Evaluation Process for POS Marketing Technology
It only seems logical that Point-of-Sale (POS) marketing planning and execution will be made easier and more efficient with POS marketing technology.
We’re biased, so before I suggest that we have the answers for you, let me first propose that you identify what your needs are related to a POS marketing initiatives.
Compile a list of your top 3 to 5 POS marketing challenges which will then allow you to create a list of “needs” you expect POS marketing technology to address.
With this list of needs in hand, ranked in order by highest benefit or value, your are now ready to begin your POS marketing technology shopping.
Efficiency and Effectiveness of POS Marketing
If you’re looking to improve your POS marketing’s efficiency, just remember it is important to first understand that you need to be effective in your utilization of POS marketing materials. If you are ineffective with your POS, any POS marketing technology will only allow you to more rapidly implement your ineffective POS campaigns.
Of course, it is also possible that you’ll use POS marketing technology to measure the effectiveness of your POS initiatives. Once you’ve become more effective, you’ll be able to focus more on improving the efficiency of your POS efforts.
In short, POS marketing technology that enables the tracking, measuring, managing and reporting on all or most aspects of your POS campaigns will help you get your shopper marketing materials to your retail customers without error and much quicker than you could prior to the adoption of such technology. And, if the technology helps with the measuring of the effectiveness of your POS, you’ll be in a much better competitive advantage position versus your competition.
As a beverage alcohol supplier or distributor, you should know that most of your peers are probably just as ineffective and inefficient as you are with respect to POS marketing. It has only just recently been acknowledged – see our previous blog – that at-retail or shopper marketing is just as important as other marketing initiatives. What these facts should signal to you is that now is the time of opportunity to gain competitive advantage – affordable competitive advantage.
Now is the Time for POS Marketing Technology
Beverage suppliers and distributors – specifically the leaders – who recognize the tremendous opportunity that now exists to adopt POS marketing technology, will ultimately be those who will gain the greatest success. If you haven’t yet considered adopting POS marketing technology, now is the time. The technology is the best it’s ever been, it’s affordable and, frankly, you can’t afford not to adopt it.
If you’d like to take a look at the state-of-the-art in POS marketing technology that will help you track, measure and manage your POS initiatives, we’d be happy to schedule a demonstration of one or all of our products. This could be your first “best idea” of the New Year.
It only takes an hour.
To learn more about our POS Marketing Technology you can schedule a demonstration by clicking this button.
In-Store Point of Sale (POS) Marketing Displays Help Score Actual Sales - Wall Street Journal
“A Super-Bowl Ad Is Just Half the Battle: In-Store Displays — the Bigger the Better — Help Marketers Score Actual Sales”
Posted January 30, 2015 by – Nathalie Tadena, WSJ, January 30, 2015 - Link to article below.
This Wall Street Journal article marks first time I’ve seen a reference to the “equality of importance” of point-of-sale (POS) marketing. The key word here is: Equality as in “as important as” something else. Quoting from the article:
“It is equally important, ad industry executives say, to make a splash at retail stores with elaborate displays that stand out to reinforce a brand’s message and — fingers crossed —actually lead to a purchase.”
OnTrak Software Perspective
Our opinions have come a long way from 2005 when we implemented our first SignTrak customer. As you may know our SignTrak product is an on-line application that allows beverage alcohol companies to track, measure and manage one of their largest expense category - In-store marketing materials.
Typically this is referred to simply as printed POS. (We also have a product to track Permanent POS - PermaTrak)
Back in 2005, we knew POS marketing was very important. We also knew it was a significant expense item for beverage alcohol companies. But based on the actual spending at the time, we knew that traditional marketing (broadcast and print) still commanded the lion’s share of marketing spending by the big beverage companies.
We also were as certain then – as we are now – that shoppers actually buy consumer packaged goods (dominated by beverages) almost exclusively in stores, not while watching TV ads, and not even while watching Super-Bowl ads.
Yet, we also knew that Big Beer was spending considerably lesser amounts on POS than on TV spots, other broadcast media and print.
Ten years have passed and what certainly appeared to us, at the time, to be obvious has indeed come to pass:
Ad Industry Executives are proclaiming it is equally important to market at-retail because that is where marketing can actually lead to a purchase.
We have always believed that POS and traditional media advertising are indeed equal.
But our experience says that more emphasis needs to be place on the side where most CPG purchase decisions are ultimately made – At the point of sale! – The actual place and at the point-in-time where shoppers actually can become buyers.
Who knows, maybe next it will be written that beverage marketers should adopt software tools to track, measure, manage, verify, correlate POS to sales, and recover the costs of POS initiatives with supply chain partners.
We just did.
Wall Street Journal Article
Please click on here on this Wall Street Journal - A Super-Bowl Ad Is Just Half the Battle link to read the entire article.
Take a look at our suite of Internet applications that were designed by our customers to track, measure, manage, verify, correlate and recover POS marketing expenses
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