Sometimes brand builders can kid themselves into believing that their brand is growing when it is actually dying. In a misguided effort to rack up as many sales as possible, new brand builders can get the idea that any sale from anywhere is a good sale. Every sale adds to the total sales and the bottom line, right?
Especially with new consumer product brands sold at retail, spreading yourself too thin right off the bat, just to be able to say you are in a wider territory, is counterproductive. First of all, are you really “in” all those places, or, did you just sell in to some retailers in those places? Better yet, are you still there? Or did you just go in and sell out, never to be heard from again? Or worse, are you still there because your branded consumer product did not sell in that market, and is now just taking up space on the shelf while gaining the reputation of being a slow mover?
In the early stages of brand development it is essential that your brand quickly gains the reputation with retailers of being a dependable supplier, a reliable fast mover, and consistent service provider. These three attributes makes a brand credible in the eyes of the retailer. Once your credibility is established, then you can grow your brand using price, quality, positioning and distinction.
We have to laugh when we hear new brand builders bragging about how many states their branded products are sold in. It’s not about the size of the market area; it’s about the brand’s reputation with the initial retailers who stocked it. Their opinion will precede you as you expand. We often say it’s better to be a big hit in a limited area than just mediocre in a much wider area. If you grow faster than you can service or supply your accounts, then you risk destroying your reputation with the very folks who can help you build your brand – the retailers.
It’s hard enough for them to take a chance on a new branded product nobody ever heard of with no track record in their store. Once your product is on the shelf, it is best to have a representative in the area to guarantee signage, monitor sales, and solve the distribution challenges. Without a rep, you must rely on your distributor, and your brand’s reputation with the retailer will depend on your distributor’s service.
You must demonstrate credible merchandising, supply, and service before you will see any large scale growth because retailers won’t risk their precious shelf space on a new unproven brand. Merchandising credibility trumps all other aspects of brand building. It’s the part of brand building that is often overlooked in favor of quick but unsustainable sales.
National brands are built from regional brands, and regional brands are built from local brands. Pump up the volume in a small local area first. Find out what you have to do to support that volume in supply, quality control, and merchandising first, before you even think about how many states your branded products are sold in. The cost of sales and supply may surprise you and will certainly limit the speed and direction of your growth. And that’s a good thing!
Building your credibility slowly and surely will lay the foundation you need to be a known as a trustworthy, dependable brand. Nice and easy does it every time!
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