We’ve often said that Marketing and Production should pay attention to Sales and Customer Service because they are the only people in your company who talk to your customers every day. They know why customers buy – and why they don’t. They know what the competition is doing today. And they know where the market is going. We offer a free webinar on this concept.
We think it’s a mistake to come up with a marketing plan or merchandising materials without consulting the salespeople. We think it’s a mistake to let production have a free hand without listening to the customer service people. But, we also think it’s a mistake to give the salespeople everything they ask for.
You have to listen to what they are saying closely. Are they asking for something that will just make their job easier in the short run but may damage the brand, all the while make their job harder in the long run?
Last week we were interviewed on Dave Robertson’s Business radio show hosted by the Wharton School of Business and broadcasted on Sirius XM. At one point Dave asked, “What do you do when Sales asks to copy the competition?” Good question.
This is a symptom of a much larger problem in leadership. Requests from your sale team to lower the price, copy the competition, or provide more SKUs generally are based on a misconception of the brand. It is up to top leadership to “sell” the salespeople on how the brand distinguishes itself from the competition, why it is priced right, and why the brand has limited SKUs. As a brand-building leader, you must convince your salespeople why your brand‘s positioning, price, and offerings are specifically targeted to your precise customer niche. As a leader you must be ready with the answers to these typical requests – answers that make immediate dollars and sense to your salespeople.
“Lower the Price.” Your salespeople may argue it would increase volume. But you know that will not necessarily increase profitability. There are other reasons why you should not reduce the price. For instance, your price may be attractive to your niche as a quality queue. Higher prices can provide you with more profitability per sale which will ultimately reflect in sales commissions. Price lowering is a one-way race to the bottom. Unless your goal is to have the lowest price, don’t even get in that race. Besides when you are selling price, you are not generally selling quality. This approach is unsustainable, ultimately hurting your salespeople’s job security.
“Copy the Competition.” The idea here is if you are like the competition, you will get their customers. But this approach doesn’t take into consideration that the competition may be sustained by habitual buyers who really want something different. And that’s exactly what you want to have. Selling an alternative that distinguishes itself from the competition can ultimately become an easier sell since you don’t really have any competition. When your salespeople invest the time and effort in celebrating and communicating that message, they virtually eliminate the competition.
“Create More Choices.” A common refrain is, “I could have made the sale if we only had the type of products they wanted.” This approach, if followed, can easily exceed the “brand width” and confuse the market. With too many choices, buyers are likely to just say no rather than carry them all, or worse “cherry pick” and “cannibalized” one of your SKUs for another. This makes the sales job harder, not easier.
We stand by our statement “Sales is King,” but even the King needs some direction!
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