Do you really have a sales department?

An important function that does not get the attention it deserves

We have the privilege of working with food and beverage producers and processors from coast to coast. It is very interesting to see the different business models, and we appreciate the passion people have for their products. There are many different tasks required to build a successful food and beverage business:

You need to develop a product,

You need to build capacity to produce it

You need to sell it.

Within each of these simple statements there are so many steps that require time, energy, expertise, money and passion. Unfortunately, we see so many businesses that put the vast majority of the effort into the first two statements. Yes, you need to develop products and have the ability to produce them. The reality is if you do not put the effort into selling it, you will not maximize the opportunity.

Sales are not the result of a great product.

Sales need to be developed and managed. Yes you can influence them.

The difference between sales and marketing

We see many businesses that combine sales and marketing. We understand why, but you really need to see them as two different functions. Here is how we define it as SKUFood:

Sales is the customer focused part of your business. They work with the businesses that issue the purchase orders. They are responsible for developing the relationships with retailers and distributors. They are also responsible for delivering the sales in your business. The tools they have include relationships with customers, trade spend and trade shows.

Marketing is the consumer focused part of your business. They develop the campaigns to create awareness and build demand for the product from the end user. They do social media, mass media and public relations.

It is a reality people combine these functions as the business grows. You cannot afford to hire too many people early on. One of the biggest challenges with combining these roles is people gravitate to the marketing and avoid the sales. They see sales as a result of good marketing. It is true good marketing will create demand, but if the product is not in the store and merchandised properly you will miss a lot of opportunities.

Marketing is often more rewarding and more interesting to work on. It can be creative and if consumers like your product they are nice to deal with. Customers (retailers and distributors) can be challenging and frustrating to deal with. Having your product properly merchandised where 30,000 consumers pass it every week in each store can deliver a lot better results than a social media post you do not control, on a very crowded platform.

Role of sales in your business

To ensure you benefit from the resources you dedicate to sales, you need to define the role and hold people accountable for results. In the upcoming weeks we are going to dive into sales in food and beverage businesses. We see it as very under-developed in the small to medium sized business space. The large consumer-packaged goods (CPG) companies dedicate a lot of resources to sales. There is a reason. They get a return on their investment. It is true they have more money to invest in this area, but they would only do it if they see benefits. You must figure out what you can do in your business.

What you cannot do is hope a great product and some good marketing will deliver sales. Retailers and distributors expect more than ever from suppliers, and you need to do some of the work they used to do. You need capable resources in place to do this work.

Sales budgets/targets

Your sales people need to work with the other parts of your business to determine what the sales targets are. This can be impacted by supply of raw materials, packaging you can afford, production capacity, stores you are listed for and several other factors. Your entire business should be aligned on the volume of product that is ideal for you to produce and sell. This should evolve from year to year as your business changes. Sales people should also be realistic about the amount that can sell. Perhaps you have capacity for 10,000 cases, but if you are only in 50 stores you probably will not sell that much. The business needs to be on the same page to deliver the right sales.

Customer relationships

Managing customers can be a huge challenge. They are demanding and some might say unreasonable. The reality is it is their store, so you need to figure out how to make it work. Your sales team need to manage the relationships to ensure you have the best chance to do the volume, and you spend the right amount of money generating those sales. Compliance is a big part of this relationship. Your sales team need to be clear on what customers expect and figure out how to work with the rest of your business to make it happen. Category managers are people, and your sales team need to figure them out. Hoping your customer does not call, and everything is ok is not a viable strategy.

Trade spend plan

You need to invest with your customers. There are many different options, and your sales people need to know every option and figure out which tactics work for your products and your category. This includes ads, discounts, in-store specials, over and above merchandising, demos and many more.

Conduit your business has with customers and consumers

You need to know what is going on out there. Your sales team should be in stores, talking to employees and consumers. The information they can get is so valuable. There can be a perception driving around and going in stores is a great way to put in a Friday afternoon. Not true. Store visits with a purpose can provide some very valuable information about your products and others in the category.

Trade shows

These are a part of our industry. A great sales team can build on existing relationships and develop new ones at trade shows. This is not standing behind a booth. This is being proactive, setting up meetings in advance, finding the right people who can be a partner to take your business to the next level, and being a great face for your business in the industry.

Managing channel partners

We see many businesses who believe once they find a broker and/or a distributor they do not have to focus on sales. Not true. These people can perform some of the tasks for you to allow you to scale your business or grow into new markets. Someone in your business still needs to own sales and manage these partners.

In the upcoming weeks we are going to dive into sales in food and beverage. It is a critical component of your business. If you do not believe you have the expertise, give us a call or send an email- we can help.

If you will be at CHFA in Toronto in September let me know!  Looking forward to connecting with many people that weekend.

Peter