In this series we have been examining threats from inside your own organization that can kill your brand in the New Year. Now is the time to be on guard against them. As we like to say, brands are not murdered by the competition, but die of self-inflicted wounds.
Previously we covered Marketing, Production, Accounting and Legal, and what to do in each division to preserve your brand.
Since your brand is only as good as your customers’ experience with your branded products, you must ask yourself, “Are my products physically available for my customer to buy?” If they are not, the customer feels that the brand is undependable, unreliable and hard to get. Under these circumstances, even loyal customers will buy a competing brand and feel obligated to bad mouth yours. How does this happen?
The #1 brand killer for consumer product brands sold through a distribution channel is out-of-stock conditions. Your product could have been mis-delivered or not reordered for a variety of reasons that have nothing to do with the quality or the price. It may still be in the retailer’s back room but it never made it to the shelf. Meanwhile your competition took your space!
Perhaps the retailer didn’t pay their bill last month and now your distributor won’t deliver any products to them, including yours! And what do the clerks tell your customers when this happens? “Oh, we don’t carry that brand anymore,” or “It’s really hard to get,” or even worse, “That company went out of business.” Your brand will be blamed for the behavior of others in your distribution channel. This is why you and your people must be watching the distributors, the retailers, and the shelves every day!
If you sell a brand that is used by the general public, even if it passes through several other businesses to get to them, watch out! Don’t say, “That problem doesn’t apply to me because I am a ‘B2B’ (business to business) and getting it to the end-user is someone else’s responsibility. I get paid whether or not they sell my branded products.” That may be true today, but your brand is dying at their hands. If your brand is going through a distributor who is selling to third parties such as retailers who are selling to the general public, there is no such thing as “B2B.” It’s more like “B2B2B2C” where “C” is the consumer. As a responsible brand steward, you have to make it your business to make sure your brand is managed properly all along the line. Your brand’s reputation is at stake.
So now you are in the distribution management business because out-of-stocks can happen anywhere along the channel. Your people must police every level to keep the supply flowing smoothly, even if they have to do the distributor’s or the retailer’s “job.” Make sure your salespeople are not content “blaming” the distribution channel for out-of-stocks. Make sure they are “aiming” at the causes and removing them. Yes, it requires time, labor, and sacrifice. This was the biggest lesson we learned building the Barefoot Wine Brand, and the biggest single contributor to its success!
So don’t worry so much about the competition. Put yourself in your customers’ shoes and use their expectations as a standard to measure the well-meaning initiatives, restrictions and excuses coming from your own people. In their desire to help out, don’t let them inadvertently break the brand promise!
This concludes our 5-part series. We hope we have given you a heads up on the home front threats, and some tools you can use to protect your brand throughout the New Year! Cheers!
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders