OK: you’re running a sales organisation and you think you spend most of your time on the right priorities. Put it to the test, and start with the accounts teams. You may find that 80% of a national account manager’s time is spent on promotions: proposing and agreeing deals to go on shelf. Many suppliers are running teams of glorified promotion bookers. Afraid they aren’t even doing that well either, accepting rate cards and gate fees as ‘non-negotiable’ like the losers on Dragons’ Den.
Sure, promotions are important, but they are not the most fundamental business driver for suppliers. Rule one: It doesn’t sell if it’s not there, so distribution comes before promotion. By creating a matrix of SKUs and their weighted listings, most suppliers can identify and target huge, justifiable improvements in distribution. I don’t mean force-fitting products. If you push products into a level at which they can’t justify the space, it wastes your time and annoys the buyer. Ask first: ‘is there a gap in the market?’ and then: ‘is there a market in the gap?’
Time pressure and routine drags you constantly into the promotion panto, yet unless you have plugged those gaps in your matrix then you have the priorities wrong. If a proportionate amount of time was spent on this, the gains would be greater. Rule two: if it’s not visible it won’t sell. Shelf space, position and adjacencies are never quite right if scrutinised. And this should be approached in the same way. All this works well with negotiation too instead of just giving in to demands, or saying no all the time, you can start your sentence with ‘If you ‘.
So many sales hotshots learn very late that their job is to deliver in all of the business drivers - so distribution and merchandising don’t get attention. If you are beating your competition on share and level of range, shelf and promo, you have done your job. If the product is still not selling, then your issue is in marketing or supply. So get the measures in place, set the targets and use every contact to progress one, other or all of the drivers, not just promotions.
Finally, rule three: Get rules one and two right, and then promote strategically - don’t follow corporate customer promotions like lemmings. More on this next time.