For the purposes of achieving maximizing your winery’s sales success, both you and your distributor will need to work hard at developing and advancing the relationship.
For an effective business partnership with your distributor, some form of measurement will need to be in place with regard to sales. Having a defined set of targets is the best way of doing this. These annual sales targets should be in agreement with the distributor and will need to be reviewed on a regular basis. All of this should be in the distributor territory appointment contract. Review the sales by brand, by SKU, by key market, by key account at the Annual Meeting. If not achieved, develop new programs to help the distributor achieve the goals in the coming year.
It is important to remember that although your distributor is your representative, you should maintain the relationship at key account level (annual or quarterly meetings should be scheduled with the key retail buyers as well as distributor sales managers). This ensures that you do not have an over-reliance on any one distributor.
Any healthy relationship requires the parties concerned to talk in order to successfully work together as a team. It is important to keep the doors of communication open at all times, thus allowing you to raise any issues of concern.
Contact should be ongoing and the development of a focused relationship with your distribution company’s account manager will help you to grow and develop your business. Ideally, contact should be made on a weekly basis.
Your distributor should be providing you with weekly (or monthly) sales reports showing sales performance versus annual/quarterly targets. This report should list distribution ( on & off-premise) in the retail outlets where your product is currently stocked.
It is vital that you review progress with your distributor once per quarter, at a formal review meeting where sales performance and targets are compared. The objective of this meeting is to review progress based on results achieved and to alter targets as well as overall strategy if necessary.
Equally important is the need to draw a line in the sand once per year to assess how the joint business is progressing and to identify potential business opportunities. You will need to be commercially minded about the partnership thus necessitating an in-depth performance review annually. Bring the VP-Sales into the Meeting—it will heighten the importance of the meeting.
Your distributor’s sales force is effectively your sales team on the ground. You need to put considerable effort into educating them and providing them with relevant information relating to your product range. This will equip them to grow sales in the marketplace. Briefings and product tastings for off-premise reps and on-premise sales staff can reap enormous benefits.
You must review your pricing annually as there are certain increasing costs. You will have no choice but to pass increases through to your distributor and retailers. On the other hand, you must be perceived as efficient and be able to demonstrate to your distributor that you have cost reduction strategies in place. These will absorb/deflect many of the increases you get from your own suppliers creating a sense of confidence that you are only passing on those costs that are absolutely necessary.
It is important to hit the right price point, to be competitive in the trade. To effectively do this with a multi-brand portfolio, you will need a price promotion calendar with staggered time periods—here is an example of how to successfully price promote different brands at different price promotion levels, creating FOCUS on the product line and maximizing the distributor’s sales reps efforts on all brands, and allowing even more brands to be added to the Calendar from other suppliers.
INSERT 2017 Price Promo Calendar
(example use only)
Despite the best efforts of both you and your distributor, sometimes sales do not materialize as planned. You need to recognize this, and react rapidly with a new sales strategy for the product. Additional sales and consumer promotions, new merchandising techniques, new POS, new account listings, sales force reviews, fast track New Product Development, etc. should all be harnessed to re-energize the relationship and drive sales forward.
A simple policy of visiting stores and calling into a number of customers to see how your product is performing is a great way to stay in touch and measure your distributor’s performance. It also sends a strong message to the distributor’s team that you are fully in touch at trade level. Make regular visits to the market to introduce yourself to new retailers and thank the retailers who have your brand in stock. Set up in-store tastings or samplings and attend all Holiday or Retail Trade Shows.
Set up your Distributor Annual Reviews 2-4 weeks prior to the end of any Fiscal Year. That way, the brand and their distributors will be ready to hit the ground running when 2017 starts on January1st. Advance planning on your part will create many opportunities for success at the distributor level when you should be selling, not reviewing the Business Plan.