If you are a supplier or distributor of beverage alcohol, an on-line, Point-of-Sale (POS) tracking system can and will help your sales organizations improve their performance more than ever before.
This is true today due to the on-going acceleration of competition for not only market share but also for actual market size.
The Distributor’s Sales Function in the Beverage Alcohol Market
We have lived through a fairly prolonged period of essentially zero growth in the overall beverage alcohol market, but 2014 data seems to signal the return to at least modest growth in the total beverage alcohol market – notably beer and other malt beverages. We’ve also seen some double-digit growth in certain categories like craft beers and imports.
There has been a continued erosion of loyalties between retailers and the distributors. Part of the reason for this erosion is the accelerated turnover of Sales Reps within beer, wine and spirits distributorships. Of course, there has been similar turnover within the distributor’s customers which decreases the retailer’s need to have a “relationship” with the distributor beyond the mandatory “order taking” function.
Should this continue on the current path, it won’t be long before the “ordering function” gets transferred to an on-line function via the Internet.
The fear is we may be reaching the end of an era.
A distributor’s customers tend to buy on price alone, if given a choice. The salesperson seems to continuously do less and less actual selling and more and more inventory replenishment.
Look at it this way:
A retail customer will most likely buy from your competition, especially if the competition’s price is $2.00 less per case. The risk to the retailer in choosing one versus the other is fairly slim since retailers know that beer drinkers are quite willing to buy either Bud Light, Miller Lite or Coors Light based exclusively on the per-case price. Craft beers, so far, seem fairly immune to this phenomenon.
How Do You Track POS Today?
If you’re like the majority of distributors, you don’t track POS at all. Often sales reps when trying to get a beverage order handle POS like this:
The salesperson offers up some appropriate POS materials (signs, for the most part) to the customer to “sweeten the deal”. The rep is trying to overcome the retailer’s objections about increasing the sales order-size or winning additional “shelf space”. So how about some “free POS”.
I’m sure you can imagine your rep offering paper and/or permanent signs, displays or other point-of-sale materials to encourage the retailer to accept additional cases of both the usual and perhaps new products, too.
Typically the POS order is hastily written down on a piece of paper (including napkins) or entered into a free-format text box at the bottom of the beverage order-entry screen. The customer is trusting that the POS from the distributor will be helpful in convincing his customers to convert from being shoppers into buyers. Your rep then thanks his customer for the order and moves onto the next customer, repeating the process.
In most cases tracking and reporting on what happened never occurs.
What’s a Distributor to Do?
As a distributor owner or marketing executive you need to call upon every system, every tool and every approach you can to gain, grow and retain a competitive advantage. When your reps are in the market, they should be equipped with the latest and greatest weapons of beverage sales and marketing.
You already know that a computerized ordering system is one of your weapons in enabling the sales function. Now you need to bring another weapon to bear in that critical moment when your sales rep works to increase his average revenue or case equivalent sales per customer.
Now is the time to take a look at POS Tracking Software. What you do next could have a huge impact on what you can actually “sell” to your customers.
The Case for POS Tracking
Based on our 7-years of experience working with beverage distributors, your reps’ signage requests are, on average, incorrectly translated into a sign or display that has to be re-worked. On average each rep will generate at least one reworked sign order per month.
That is unless you have a system that helps you track and manage your POS.
We have found that the cost of a sign or display re-work averages between $35 and $50. However, the real cost of a re-work is much higher due to the fact that a sign that has to be re-worked usually reaches your customer days after your competition’s latest and greatest POS material has been put up at-retail. So, having a lot of reworks does erode the market share for your brand or product. What does that cost you?
Poorly Managed POS Can Negatively Affect Sales
It may be overly dramatic to suggest one of the possible consequences of not having a point-of-sale marketing tracking and management system is the loss of customers; but it is completely without exaggeration to suggest that you are very likely to lose sales without a POS management system.
Sales efforts are now fully and permanently intertwined with POS marketing. Your beverage alcohol sales team achieves its peak results when the POS function is tracked, measured and managed – and that is only possible with an automated system.
I suggest that now is the time to apply the same careful thought to your POS marketing tracking, measurement and management that you did many years ago when you began to consider automating such functions as order entry, inventory, warehouse management, truck maintenance, logistics and accounting systems.