Trade marketing includes everything required to promote your brand. It’s your growth engine and the largest item on your P&L. Most trade spending is wasted. Every brand seeks to maximize their promotional ROI. There is a better way to grow sales & profits.

Welcome. I want to thank you for listening. Today I’ve got something a little bit special for you. Something I’ve never done before. Today I’m going to share a recording from a live event that I did. I was invited by Exceedra to be their keynote speaker at the Consumer Goods Trade Promotion Management Forum in San Francisco. The talk that I gave was the Rapid Emergence Of New Brands And How Trade Marketing Strategies Enable Profitable Progress. It was well-received and I want to thank Exceedra for inviting me to speak. I’ll include a link to them, and the podcast show notes at the end of the podcast. 

If you’ve been listening to the podcast for very long, you’ve heard me talk about trade marketing for a long time. 70% to 90% of all trade spending is wasted. The reason for this is that a lot of brands use what I would call a rinse and repeat strategy. In other words, they don’t leverage creative strategies or put a lot of care or thought into what they’re doing. They simply repeat what they did in the past, with little or no change. In addition to that, retailers, distributors, agencies, etcetera have their hands out effectively. Brands often feel like an ATM machine.

Now you’re probably thinking, “Well, that’s just the price of doing business.” Well, yes and no. Let me explain. There are a lot of promotions that don’t make sense. There are a lot of promotions that aren’t going to help you get your products into the hands of new shoppers. Think about it. The primary objective of any promotion is to introduce your brand, your product, to a new shopper. Anything else is effectively a waste of money. Now, certainly, you can reward me for going and buying your product when I was planning on buying it anyhow. But there are better ways to do that.

I’ll discuss those strategies more in-depth in a course that I’m working on right now. Stay tuned. Another aspect of trade marketing is being able to support your retail partner. That includes participating in their programs to drive shopper awareness and excitement in the category. Now, while this is necessary and important to the retailer, some of these promotions do little or nothing to drive sustainable category sales. So what do I mean by this and why is it important? The primary goal of any promotion is to drive sustainable sales for the brand after the promotion ends. In other words, when the promotion ends, you still want customers to continue to buy your product. Those customers that didn’t buy the product before the promotion. 

In addition to that, most promotions fail to achieve the end result of increasing your sales over time. Let me explain. Brands with really deep pockets can effectively buy their sales. They can buy their sales volume increase and their increase in sales. But that’s not sustainable, and it’s not realistic for most brands, especially small emerging brands. So, wouldn’t it make more sense to be able to apply your promotional dollars to promotions that grow your brand over time? So when you look at the anatomy of a promotion, some promotions will give you a nice bump or sales increase during the promotion. But once the promotion ends, you return to normal sales.

The strategies that I’m talking to you about are all designed to help you grow incremental sales after the promotion ends. This is how you maximize your trade spending. This is how you maximize your trade marketing ROI in addition to giving your brand more runway to be able to grow sales, create more innovative products, and to get on more retailer shelves and in5o the hands of more shoppers. Another key benefit of this is that you make your brand more attractive to investors. And as a result, you’re able to negotiate better terms when working with investors. And this of course includes any brand that might want to acquire you at some future date. The bottom line is that understanding your trade marketing and maximizing each and every opportunity is going to decide or determine how long your brand is going to be around. A month, a week, a decade, a year, or even longer.

This is one of the key things I talk about during this keynote address. I will also be sharing some key insider secrets with you that are included in my online trade marketing mini-course and the more robust course I am working on.  Stay tuned or drop me a note and let’s chat if you have any questions and if you want to learn more. Let me know what points you want me to cover in the upcoming course. 

Download the show notes below

BRAND SECRETS AND STRATEGIES

PODCAST #140

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #140

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Dan: Welcome. I want to thank you for listening. Today I've got something a little bit special for you. Something I've never done before. Today I'm going to share a recording from a live event that I did. I was invited by Exceedra to be their keynote speaker at the Consumer Goods Trade Promotion Management Forum in San Francisco. The talk that I gave was the Rapid Emergence Of New Brands And How Trade Marketing Strategies Enable Profitable Progress. It was well-received and I want to thank Exceedra for inviting me to speak. I'll include a link to them, and the podcast show notes at the end of the podcast.

If you've been listening to the podcast for very long, you've heard me talk about trade marketing for a long time. 70% to 90% of all trade spending is wasted. The reason for this is that a lot of brands use what I would call a rinse and repeat strategy. In other words, they don't leverage creative strategies or put a lot of care or thought into what they're doing. They simply repeat what they did in the past, with little or no change. In addition to that, retailers, distributors, agencies, etcetera have their hands out effectively. Brands often feel like an ATM machine.

Now you're probably thinking, "Well, that's just the price of doing business." Well, yes and no. Let me explain. There are a lot of promotions that don't make sense. There are a lot of promotions that aren't going to help you get your products into the hands of new shoppers. Think about it. The primary objective of any promotion is to introduce your brand, your product, to a new shopper. Anything else is effectively a waste of money. Now, certainly, you can reward me for going and buying your product when I was planning on buying it anyhow. But there are better ways to do that.

I'll discuss those strategies more in-depth in a course that I'm working on right now. Stay tuned. Another aspect of trade marketing is being able to support your retail partner. That includes participating in their programs to drive shopper awareness and excitement in the category. Now, while this is necessary and important to the retailer, some of these promotions do little or nothing to drive sustainable category sales. So what do I mean by this and why is it important? The primary goal of any promotion is to drive sustainable sales for the brand after the promotion ends. In other words, when the promotion ends, you still want customers to continue to buy your product. Those customers that didn't buy the product before the promotion.

In addition to that, most promotions fail to achieve the end result of increasing your sales over time. Let me explain. Brands with really deep pockets can effectively buy their sales. They can buy their sales volume increase and their increase in sales. But that's not sustainable, and it's not realistic for most brands, especially small emerging brands. So, wouldn't it make more sense to be able to apply your promotional dollars to promotions that grow your brand over time? So when you look at the anatomy of a promotion, some promotions will give you a nice bump or sales increase during the promotion. But once the promotion ends, you return to normal sales.

The strategies that I'm talking to you about are all designed to help you grow incremental sales after the promotion ends. This is how you maximize your trade spending. This is how you maximize your trade marketing ROI in addition to giving your brand more runway to be able to grow sales, create more innovative products, and to get on more retailer shelves and in5o the hands of more shoppers. Another key benefit of this is that you make your brand more attractive to investors. And as a result, you're able to negotiate better terms when working with investors. And this of course includes any brand that might want to acquire you at some future date. The bottom line is that understanding your trade marketing and maximizing each and every opportunity is going to decide or determine how long your brand is going to be around. A month, a week, a decade, a year, or even longer.

This is one of the key things I talk about during this keynote address. I will also be sharing some key insider secrets with you that are included in my online trade marketing mini-course and the more robust course I am working on. Stay tuned or drop me a note and let's chat if you have any questions and if you want to learn more. Let me know what points you want me to cover in the upcoming course.

Before I go any further, I want to remind you that at the end of every episode there's a free downloadable guide that you can use to grow sustainable sales. I always include one quick to download, easy to digest strategy that you can instantly adopt and make your own. One that you can use to grow sustainable sales and compete more effectively with. Remember, the goal here is to get your product on more retailer shelves and into the hands of more shoppers. Empowering brands and raising the bar. Remember, this show is about you and it's for you. If you like the podcast, please share it with a friend, subscribe, and leave a review. Also, I'll be placing this on my YouTube channel. So you'll be able to see the actual slides that I was speaking to while giving this presentation. But not right away. I have other great content that I've been working on that I want to post first. So keep checking back. And, you'll also find out or be the first to find out if you subscribe and smash the like button, the bell, and if you subscribe to my weekly newsletter.

I want to make a quick shout out to a listener who was a guest on podcast episode 78: Leveraging mainstream best practices to build two legacy natural brands. Scott Jensen, the CEO of Rhythm Superfood and Stubbs Legendary BBQ Sauce said “Listening to a half a dozen of your podcasts with the breadth of them being as many as they are, you can listen to half of those and get an MBA in entrepreneurship”. Thanks Scott, I appreciate the endorsement. If you want me to read your testimonial on the podcast, leave a comment on iTunes, comment on a social post, or send me an email. I read every one and this is exactly why I do this podcast, to raise the bar in our industry and to help you go toe-to-toe head-to-head with the most sophisticated big brand out there.

Be certain to listen to the Q&A at the end of the presentation - I may answer your most pressing question.

Now, here's the presentation that I gave to the Consumer Goods Promotion Management Forum, put on by Exceedra. Now, here's Brian, who did an awesome job as the host.

Brian: In recognition throughout the industry as an influencer, an expert speaker and trainer, and a . Dan's Brand Secrets and Strategies Podcast is popular with lean startups, healthy brands, and retailers. And in addition to sharing 25 years of experience, Dan talks with thought leaders, CEOs, and founders of successful industry companies who candidly share in the cyber secrets. Hey, what are you up to now? You said 113?

Dan: 132.

Brian: 132 podcasts, people.

Dan: As of today.

Brian: Make sure you look him up. All these files he's going to be reading today are in those pamphlets and booklets that you have. If you like somebody, if you want to learn more about them, make sure you hit them up on Facebook. And then learn some more about them. I'm sure Dan would love for you to apply both to his podcast and his new YouTube channel that he told me about last night.

Dan: Yeah. And the mini-courses. And all that, yeah.

Brian: And with that, I'm going to give you Dan. Thanks, Dan.

Dan: Thank you. Thank you. Appreciate it. Thanks.

I want to thank, first of all, Exceedra for bringing me on. Can you hear me okay? Did I knock the microphone out? Okay, great.

So anyway, I want to thank Exceedra for bringing me on and inviting me to spend time with you today. One of the reasons that I'm here, as Brian was alluding to, is I spend a lot of time talking about category management. A big part of category management in my mind includes trade marketing, demand planning, et cetera. So I talk about this on my podcast or on my mini-courses and all my content. I give out 400 articles published globally. One of the other reasons that I'm here is I used to work at Kimberly Clark. And as a category management expert, that seal in the middle, first-person certified at the highest level of category management proficiency, I developed a lot of tools and strategies way back when. When there wasn't a tool like this to be able to help us understand what's going on in the trade marketing arena. Specifically getting back to the contribution for a promotion at retail into the brand.

So one of the things I want to teach, some of the things I want to teach you today are how to rethink trade marketing, one, and then two, how to leverage these strategies and enhance that with the Exceedra tool so that you can partner more with retailers and help them drive more sales.

The future of retail is changing. The shopper journey is changing. This is one of the main things I want to talk about, and this is the focus of my podcast, again, all the content I put out there. And what I'm getting at is this. Mainstream solution providers, retailers, et cetera, tend to commoditize the shopper and the customer and basically, a one size fits all type of solution. And the more that you can personalize your ability to connect with your core shopper through your trade marketing, et cetera, the more effective you're going to be at being able to partner with and help your retailers.

Customers have choices today. I can go to buy a product almost anywhere. And the sad thing is, is that, and if I go buy your product, you have no idea who I am. Or why I buy your product, or how I use your product. So the strategies that I want to talk about today or teach you today are how you can develop a relationship with me, a personal relationship with me so that you can leverage my connection with you to drive sales inside of a retailer. At the end of the day, that's what the retailer really wants.

So I want to challenge the notion that retailers have all the power. When I started in this industry, this is the way it is. It's a one size fits all, here's what you've got to do, here's the way everyone else does it. The reality is that retailers generically don't make anything. What they sell is other people's stuff. What they sell is a small sliver of space that your product takes up on their shelves. Retailers cannot possibly be experts in every category, in every brand they sell. This is why they need you, and this is the point of differentiation that I want to share with you. Retailers need brands willing and able to help them drive sales. I believe, by definition, my definition, that a category leader is any brand that's willing and able to step up and help the leader, help the retailer, drive sales with their unique consumer.

Brands need to be experts in all their products and their competition. This is why I built my free turnkey self-store strategies course. This is why I have my podcast and everything else. And what I'm getting at is that if you're able to leverage that in your relationship with your retailer, that's far more important than slotting or menu fees or whatever. And if you're effectively able to drive sales within the retailer, then they're going to want to bend over backward to help with, work with you. So if you think about it, a retailer wants three things. They want a reasonable profit in their category, they want more traffic in their stories, and they want a competitive advantage. And any brand willing and able to help the retailer achieve those objectives is going to get a point of negotiation that they can leverage to work more effectively with the retailer.

So brands need retailers, I mean, brands need to own their customers, and that's what I was getting at there. So if you can develop a relationship with your customers outside of traditional retail, and this includes online retail, then you can leverage that to drive customers into a retail store. And one of the things we're going to talk about in a minute is that if you reward me for a promotion on something that I was already going to buy, well that's not effective. However, if you can reward me or develop a relationship with me outside of traditional retail, including online, that's where you have the best opportunity to influence me.

Oh, and the best part about that is I'm going to be a loyal evangelist and I'm going to help you decide what products you need, what innovation you need to be thinking about, et cetera. And that's why these tools that Exceedra has are so important.

Brands need retailers as much as retailers need brands. And the point here is that everything is negotiable. And instead of being a commodity, instead of being a brand that just shows up, "Okay, I'll participate in this program, that program, et cetera," I'm recommending that brands instead leverage that relationship that you have with your unique customer and use that as a point of negotiation with retailers.

So several years ago, I did a feature article for the 2016 Category Management Handbook. And based on a theory that I had, I wanted to prove that natural organic products were responsible for all the sustainable growth across every category. So Nielsen gave me access to all that data. So at that time, total US food sales were up 1.9%. Natural organics up 11%, natural organic-only represented 7.7% of that pie, and yet if you take away that chunk of natural organic, then it's up, total category sales are up 1.2%. Now that doesn't sound dramatic but look at this. If you look at the same information in the dairy category, dairy's up 1.5%. Total natural organic dairy's up 12%. Organic dairy represents 9.8% of that pie. If you remove that, then total dairy's up .5%, and this is a multi-billion dollar category.

My point is this. Instead of saying, instead of leveraging or thinking about the way that your product goes to market, think again about how that unique consumer that you're driving into the store is helping those retailer drive sales. So if you're gluten-free, plant-based, et cetera, the numbers are even greater. So as you start to build this into your selling story, now you've got something that the retailers really want and need. They want a point of differentiation, remember? And if you understand how you're helping them drive sales in their store, that's how you remain relevant to the retailer. So what does the core natural shopper look like? I mentioned that a lot of solution providers tend to commoditize shoppers as well. And my point is this. Natural shoppers, don't, aren't, they don't want to be, they're not cons. They don't want to be sold. They want to buy products. Have you ever gotten a great deal on something that you didn't like? The reason I put that in there is because a lot of trade promotions are about buying customers. Not having a relationship with a customer.

So the natural, the core natural shopper, the committed natural shopper, they don't settle. They want what they want. They will pay a premium for products that, that meet and exceed their need. And that's why if you leverage that in your selling story, that's how you can develop a more sustainable relationship with a retailer.

So how the shopper. Now when I started in this industry, it was a female head of household, 2.3 kids, et cetera. That's what traditional shopper marketing thinks about, and I'm saying that's not enough. You need to be intimately familiar with your core customer. And again, if you build a relationship with your core customer offline, this is where you get to really understand who your core customer is. So for example, are they vegan? Are they socially active? How involved are they in their community? Are they a LOHAS shopper? LOHAS consumer. Does everyone know what a LOHAS consumer is? Okay. A LOHAS consumer, a lifestyle of health and sustainability. Now, the reason this is important, I joke about this a lot on the podcast. A lot of mainstream solution providers say that the LOHAS consumer is someone that eats a couple of salads and goes for a walk. For those of you that are in our world, the LOHAS consumer is also interested in reducing their carbon footprint on the planet. About sustainable packaging. About organic. Regenerative organic, even better. Again, these are the consumers that will pay a premium for the products that meet their needs. And if you can attract those consumers, which are probably your consumers in many cases, that's far more important, again, than any slotting or menu fees that a retailer charges you.

80, over 80% of natural brands fail in the first year. And I'm committed to change that. Retail's a marathon, not a sprint. And I want to change the conversation from, how do you go to market today to instead being more focused on serving the needs of the consumers that want to buy your products. The consumers that align with your products. So what is trade marketing? Trade marketing obviously includes anything that's involved in getting your product into the hands of the shopper. The reason I put this slide in there is, is you're just going to want to back up a little bit and think, "This is the way it's traditionally thought of." I want to teach you some strategies or some ideas or challenge you to think differently about what trade marketing could and should be.

Retail is expensive. Traditionalist retail is pay to play. And small brands are unfairly burdened by this. Larger brands don't necessarily pay slotting. And they avoid a lot of the menu fees. And the strategies I want to teach you, again here, on my podcast, et cetera, are strategies that you can leverage with retailers to get more ROI out of your trade promotional dollars. And what I'm getting at, for example, is there are some retailers that I was working within my past throughout my career that would call me up and give me an incremental end cap, or give me an incremental lobby space or something like that, and not charge me for it. Or they wouldn't charge me slotting. Again, because I was providing so much value to the retailer. And, in addition to that, I was also helping the retailer understand their customer, their data, et cetera. So that's the ultimate goal. And what I'm challenging, what I want to challenge everyone in this room to do is think about again, how does your customer shop the category? How can you help that retailer drive sales in their category by folks on that end consumer?

So traditional trade management. Your checkbook is the most important tool in your arsenal. So in natural, you're told to go raise money, and then you're told to raise money, and then you're told to raise money, and then after that, you're told to go raise money. And then when you finally get an appointment with the retailer, it's sit down, shut up, and get your checkbook out. And I know I'm being a little flippant about this, but the point is this. We've been trained as an industry to think about what we can pay for. About what we can buy to get our products on the shelf. It's true that you can artificially influence the sales of your brand if you've got deep enough pockets. But most of these brands here can't do that.

So the strategy that I want you to think about instead is, again, how do you leverage the unique relationship that you have with your consumer. So these tactics are ineffective and outdated. And that's what I want to challenge. So trade marketing is the largest line item on every brand's income statement. And again, I want to try to help you maximize your trade marketing ROI. Now, part of this begins with understanding what's involved in the trade, in your trade spending, et cetera, and we'll get to that in a minute. 70% to 90% of trade spending is wasted. That sounds like a pretty, a pretty bold number. It's because the primary objective of every trade promotion is to get your product in the hands of the new consumer. Period. Anything else is ineffective and it's not driving your sales.

And what I'm getting at is this. Most brands think of a rinse and repeat strategy. Instead, think about how do you develop new customer. How do you bring new customers into your brand? And everything else that you're doing for trade spending is something that you probably want to rethink in terms of, is this a good spend? Do I want to participate in every program the retailer has? Maybe, maybe not. But more importantly, if you don't want to participate in it, help the retailer understand why that program isn't going to help them drive the sales that they want. So at the end of the day, it's about a collaborative relationship.

Anatomy of a promotion. Promotions are designed to create excitement and encourage customers to buy your products. So, one of the things that a lot of brands struggle with, or they take this for granted, is the contract. Now, this is probably the most important thing in any trade promotion, and the reason I wanted to focus on this is because a lot of brands, a lot of retailers, a lot of, not, I mean, brands, a lot of retailers, distributors, brokers, et cetera, they don't hold everyone accountable to this. And what I mean by that is you've got to make sure that if you agree to perform, you agree to bring a certain amount of product in, et cetera, that you've got the product there, that they promote it when they're supposed to promote it, et cetera.

As an example, there was a company that I used to, we used to, a retailer we used to do business with, that used to run promotions whenever they wanted to. They'd bring an extra product in, they would run the promotion outside the promotion dates, et cetera, and then they would deduct for everything. Well that's a nightmare for you guys, right? So if you're able to hold the retailer accountable for there, to their contract, hopefully, that will reduce a lot of the deduction issues that you've got with it. But more importantly, as part of this, I believe that the brands need to take responsibility for every aspect of the promotion.

So what I mean by that is that you need to tell the retailer, "Here's how much additional product we need to have in every store to be able to support this at this price point and this lift." The next thing, the goal, the goal of our promotion is to have a balanced and fair approach. The reality is, is that very few times does this happen. If you can change this equation so that you're giving the retailer what they want, more trade, I mean more sales in their store, et cetera, and help the retailer work with you so that you can get a bigger bang for your buck, this is where the opportunity is for you to help the retailer grow sales.

So obviously you want to plan ahead. When I started in this industry, we, planning ahead meant maybe a month or two. At Kimberly-Clark, I think we were out a year and a half at one point, you know when I left there. But most small companies don't think about this. In fact, I was just talking to someone about how a lot of brands don't think about their trade marketing. They don't really put a lot of emphasis into this. But keep in mind, this is your single largest line item. So if you can leverage your ability to think in the future, and think about your ability to drive sales with your trade marketing, here's the opportunity for you to improve your demand forecasting. Here's your opportunity for you to improve your inventory levels, et cetera. So this is critically important. I don't want to, you know, I want people to start thinking about how, if you can leverage these strategies over longterm, this is how you're going to help the retailer compete more effectively. And this is how you're going to remain profitable longer.

Promotion schedule. You know, I mentioned a minute ago that when I first started in this industry, we would talk about trade promotion a couple of months out. Now we're talking about further on. The further out that you're able to get into a promotion, again, the more effective you are. But now, let's talk about scorecards. On my website, there is a resource for scorecards. A scorecard, think about it as a project management tool. So I'm going to run a promotion with my brand. I want to know how much product I need to bring into the store when the promotion's going to start, et cetera. A scorecard is a great tool that you can use so that you can say, "Okay, well, Bob's going to make sure that we have the right amount of product in the store on time to be able to support it. We've got the demo set up, et cetera."

So everything is detailed and organized, and you can use that not only to help drive sales with the promotion but you can use that as a post mortem. And I mentioned that a lot of brands use the tired old rinse and repeat strategy where, "Okay, this is what we did last year, so this is what we're going to do this year." If you've got a scorecard, then you can go back in and say, "Well, how well did that work?" And my point is that the more you're able to leverage your key learnings in future events, the better you're going to be able to help out the retailer. So if you go to retailer A and say, "here's what we did with the promotion," then you can go to retailer B and say, "Well, here's what we did in another market. If you do this, if we get an end cap at this price point, et cetera, here's what we can do for you." And again, this is where you need to know your numbers.

So you need to maximize your trade marketing ROI. I don't believe any brand should farm this out. If you do farm this out to a broker, an agency, et cetera, you still need to keep your hand firmly on the wheel. And what I'm getting at is this. This is your single most important, you know, resource in terms of your ability to get in front of the customer. In terms of your ability to drive sales. So if you can leverage these strategies, then that's going to help you understand what's really going on in terms of your promotions. And the more information that you have, the better informed you are, the better informed, the better you're able to help your retail partners.

So why does this matter? Increase distribution preferential merchandising. There have been several times where I've been able to leverage, again, my relationship with the retailer to drive incremental promotion. To become a category leader or a category captain. Depending on which way you want to go we'll talk about that later if you'd like. But being able to have a say in where your product goes on the shelf, because you provide so much great value to the retailer, et cetera. It can maximize, efficient trade spending can maximize your promotions. In other words, you get a bigger bang for your buck.

One of the things, for example, that you might consider doing, is cross-promoting with another brand. That's a great way to amplify your promotion and one of the things that you might consider doing, for example, is with packaging, putting that other brand on your package as you're, just for that promotion. So again, driving sales, leveraging the community of two different brands to drive sales within a retailer.

Category leadership. Tremendous opportunity. This is where you stand out in the retailer. This is where you become a value-added resource to your retail partner. And then higher sales and profits. The goal here is to convert occasional shoppers, occasional customers, into loyal shoppers, loyal evangelists. If you give shoppers what they want, here's what they're going to do for you, they're going to help you grow sales in the category. And at the end of the day, this is all about helping the retailer remain relevant. And what I mean by relevant is the retailer is trying to compete in their market and they're trying to compete against online. And if you can again, help drive sales to that retailer, that's how you will help that retailer remain relevant. So you want to leverage these strategies with your retail partners. I keep talking about that, I've hinted at that, but what I'm getting at is you need to develop, in my opinion, a relationship. A collaborative relationship where you become more than just a transaction. More than just another brand on the shelf. Instead, you're working closely with the retailer to help drive sales in their store. When I started in category management years ago, we were sort of a consultancy for the retailer, even though I was getting paid by Unilever, Kimberly Clark, et cetera.

But leveraging that ability to help drive sales in the retailer as a collaborative relationship, that's where I had the biggest gains. And by the way, on that note, I've had tremendous wins in category management throughout my entire career. I could spend hours talking about them. But in terms of driving the business, in terms of moving the needle, the trade marketing piece, that's where I was most effective. And that's why I'm sharing with you that if you can leverage these strategies to work with retailers, change the conversation, this is where you can have the greatest impact on your bottom line.

Trade marketing can add rocket fuel to your brand. Nielsen came out a while back and they said that if you get to target the right person, you can 13x your ROI. I think that number's extremely low. And the reason I think it's extremely low is because I think it undervalues. Remember, commoditizes the shopper. The point is this. If you can get your product at the hands of the shopper that wants your product if you can make sure your product's available anywhere your customer shops, that's the goal. And if you can help, again, with that relationship with the retailer, help them remain relevant, that's the opportunity.

And then rinse and repeat all this time what I'm suggesting is that you want to leverage these strategies, these tools, these methodologies, et cetera so that you're helping the retailer drive sustainable sales in their store. I want to open this up for questions if you've got anything that, you know, a bottleneck that we can try to solve or a case study, I was talking to Brian about this.

Brian: You talk about knowing your customer. We have a room full of smaller companies. And you talk about the kind of lack of finances. Where do you, where do you see people having the best results and understanding who their consumer is with the least financial obligation possible?

Dan: Great question. So you can pay for this information. But the challenge is that when you pay for this information, you're going to get the viewpoint of the person who puts this information together. The study group or whatever. If you could go to the store and have a personal, intimate conversation with everyone that buys your product, that would be best. If you can develop a relationship with me as your customer offline, or online, rather, through social media, et cetera, and then develop that relationship to have that customer, that conversation with me, then that would help. There is a company that is actually in this room, perhaps. I know that I saw their name on the list. Where I did an informal Facebook study. It wasn't scientific. But I used that, I baked it into their selling presentation and they went from only a few stores to every store within, in the entire chain. Within a year or so.

And the point is this. By being able to help the retailer understand who your core consumer is, they were able, they saw the value of helping this, this particular brand gain distribution. But in terms of your question, you've got to look out, you've got to go out there and look at them. You've got to talk to your customers. You've got to develop a one on one relationship. The Achilles heel of big brands is that they talk at us. "We're big, we're great, we're number one, you need to buy us, look at us, aren't we wonderful." The advantage that you guys have is that you can have a one on one conversation with your core customer. And all of your trade marketing, all, everything that you do, should be impacted by your relationship with the core customer. When are you, you know, how are you trying to meet that customer? In other words, when you have a promotion, you don't want to have a broad promotion that focuses on everybody out there. You fish with a big net, yeah, you'll catch a bunch of people. But the reality is if you fish in the right pond, you're going to do a lot better. Does that answer your question, Brian?

Brian: Yeah. No, yeah, it does. And I have another question. You talked about push versus pull kind of strategy for your retailers. I know I've worked on brands where we've had a pull strategy, where we're going after the consumers at store to try to come out to the retailer and say, you know, "Where's this brand," and this and that. It worked for us, kind of guerrilla warfare, I know we have some war stories. Do you have any, you know watch-outs or war stories you can share for kind of a full strategy versus kind of that push strategy where you're talking just to the retailer rather than the consumer?

Dan: Sure. And thank you, that's actually one of my favorite topics. So push strategy is where you buy the customer. Where you put a lot of money behind them, behind the promotion. Where you're driving your sales with, how much money can you pay to get your product on a display, et cetera? Pull strategy is where you leverage that unique relationship you have with the consumer to drive them into a store. So for example, one of the stories that I have is there was a brand that wasn't able to get into a specific retailer. And they started promoting their brand in the market. And because of the cus-, and then leveraging that relationship that they had with their customers. Having their customers go into the retailer and say, "Hey, where's my stuff?" And as a result, the retailer took notice and put their products in their store.

So that's perhaps the best and easiest way to do this. But the reality is this. There are some brands that promote so heavily that, again, that they commoditize the category. Think about it. Cereal is, you know, or actually one of my favorites is rice cakes. And so there's a category, and I know that some of you worked for Quaker, at one time there were 16 feet of rice cakes. And that was such a heavily promoted category that now it's down to just a couple feet and just a couple different brands. But the reason, I think one of the reasons that that category struggled is because there was so much emphasis put on price as opposed to value. So the brands that are doing well in it are succeeding, but again I think price is what killed it. The same thing that you see in cereal. Mainstream cereal providers or, you know, back to that chart earlier, a lot of the mainstream brands are struggling because it's all about, "This is what we did yesterday, this is what we're going to, you know, what we did before, this is what we're going to do tomorrow." Instead of being creative.

And that's one of the points I wanted to make, is that you put a lot of creativity into making your brand. Into creating something wonderful, and to disrupting the category. Shouldn't your trade spending be as creative as your brand is? Just a thought. So, that help?

Brian: Yeah, that helped.

Dan: Yeah.

Brian: First a comment, then questions. So we talked about contracts. You talked about scorecard, right?

Dan: Right.

Brian: So you have that scorecard out there. What, in what vernacular context are you communicating that? Is it communicated based upon the brand view? Or is it communicated based upon the retailer's view?

Dan: I would go, I would first focus on the brand. Good question. So what he's asking about it, how to leverage a scorecard. So first of all, you live and die by your brand. If I'm a customer, I'll walk into a store and there's an out of stock, I'm going to blame you on it. Your brand. Okay? Because you didn't perform, or you're not there to meet my needs, or whatever, you know, is going through my mind. So if you can leverage the scorecard so that you put your best foot forward and you can go to the retailer and say, "I'm going to have this much product in the store, I'm going to have these people demoing it," et cetera, "But let you manage every single aspect of that," and then get the retailer to buy off on, "Okay, this is what we can expect. We're going to get a shipment on this day for every store," et cetera.

But more importantly, if you can use that scorecard, again, this, I think this needs to be owned by the brand, and you can leverage that through your brokers, your agencies, your distributors, et cetera, I think that's where the real success is. Because at the end of the day, it's about retail execution. And the scorecard is the tool that can help you, help ensure that you execute at the level that you need to so that me, the customer, I'm happy and satisfied with you. And I'm going to buy your stuff tomorrow. And then, okay. Does that answer your question?

Brian: Yeah. And you're linking that scorecard to that, to the contract?

Dan: Yes.

Brian: crosstalk

Dan: Yeah, I think a scorecard should be used for everything. Yeah, I'm sorry, does that help? And by the way, KPIs, if you don't have them, key performance indicators, if you think of the scorecard as here's the roadmap. Okay? Your KPIs effectively become the the guardrails. So in other words, when I'm seeing up a promotion, how do I want this to be promoted? How many cents off or more, less, whatever, than brand X? And then, where do I even want to be merchandise and stuff like that. So think of your KPIs, and you should have a lot of really good KPIs around the five Ps. People, place, price, product, promotion. And so you want to have a robust set of KPIs, and again, those are the guardrails. That help whoever's executing around there.

So actually, well, another point I wanted to make. The reason I developed my turnkey sales first strategies course, which is free, is to teach brands how to leverage these strategies to identify who your core customer is, et cetera. And the point is this. Most of the brands, the, most every brand fails as a result of the fact that your message is not consistently communicated across every channel. Every sales part, part of your sales funnel. So if I tell you a story, and you tell Mark next to you, and Mark tells somebody else, et cetera, by the time the story comes back around to me, it's unrecognizable. Your greatest opportunity, in my mind, is to make sure that everyone who touches your product, every part of your sales funnel, tells your story with the same passion, enthusiasm, and authenticity as your founder. Meaning that everyone's got to be in lockstep.

So trade marketing, back to the slide where I said, "Don't farm this out," that should be part of every single thing every brand does. It shouldn't be this department's thing. So, in other words, this brand, this department over here choose the trade marketing strategy, this brand, this department over here executes, and this department over here is the one that measures it. No. It should be an integrated process. And the more you can integrate this within your entire organization, get everyone to buy it, and get everyone on board, and then leverage the scorecard so that everyone throughout your entire sales organization communicates in lockstep with the same passion and enthusiasm as the founder. That's how you're successful.

And this is how you can out-compete the big brands because I've got to tell you, they don't do that, and I built a career pushing big brands around. Does that help?

Brian: Yeah. Definitely.

Dan: Anyone else?

Speaker 3: So Dan, are you talking about optimizing your sales team to become their own trade experts? Or are you talking about changing the communication and kind of the, you know, standard operating procedures that they have within those walls to make sure that all those different departments work with each other? Or they're learning from each other? Just make, your last statement sounds like, you know, you might be trying to say, "Well, get rid of your trade team and make the people do the trade-in their analysis." Is, do you see the best-in-class of people pushing for smarter salespeople? Or let salespeople sell, and then, you know, bring in a great communication process to make sure that they're armed.

Dan: A little bit of everything and all of the above. And what I mean by that is this. Is, I mean, to be honest with you, is that there are some people that believe that trade, that salespeople should go out and do their thing, and leave them alone because they're good at it or whatever. But knowledge is power. And if you can invite those people, within the sales team, into your organization, and teach them and tell them, "This is why we're doing this. If we do this, we will have X% growth," whatever. You know most companies, with big companies, we used to get incentives every quarter, right? So if I know what my target is, what my goal is that I'm shooting for, I'll probably work a lot harder for you, right? But if my goal is to simply survive and make sure I don't have to go look for another job in a few months et cetera, then my goals are weak.

But the point is, if you can rally your troops, everyone within your sales team, to be in lockstep by using the scorecard, et cetera, then you're empowering the people that work for you and then as you're empowering those people who work for you they're going to walk through walls for you. And the industry leaders that I interview, for example, on the podcast, that are the most successful, are the ones that build teams that have people in them that will walk through walls with them. That will do unbelievable things instead of just call it in, et cetera. Does that answer your question?

Speaker 3: Yeah. Definitely.

Dan: Okay.

Speaker 3: I see the same thing, where if you align people's modules and incentives to be aligned with each other, then all of a sudden they have to work together to make sure that they're working properly and everything that they do.

Dan: Exactly. And honestly, I think that was the philosophy that we had at Kimberly Clark. I, you know, from my perspective, we were a pretty well-oiled machine. We're all working toward a common objective. That was kind of in my impression what a lot of the natural companies have today. And when they gutted the company, that's a whole 'nother conversation. We became, they became a sort of a traditional CPG company where you're in a position for 18 months and your job is to move the needle a little bit. Instead, you guys have an opportunity to disrupt the category. Keep in mind some of these slides that I shared with you. I mean, if natural organic products are driving sales, or plant-based, or whatever, driving sales across every category. If it's your customer that doesn't mind paying a super-premium for a product, you've got a unique selling position. And if you can leverage that with the retailer so that you're not a commodity or not just another package on the shelf, that's where you stand out. That's where the retailer if they're savvy, if they're smart, should take notice. And if the retailer understands that they can drive sustainable sales, compete more effectively, et cetera in their market, by leveraging that unique consumer that you drive into their store, that's the win at the end of the day.

It's a radically different concept than what you learn in traditional CPG. But this is where I've put my stake in the ground. This is what all my content's on. Listen to the podcast, et cetera. This is one of the things I focus on across all my platform.

If you want to come up and ask me more questions later, be happy to answer or address anything. Please let me know. Thanks.

Brian: Thank you.

Dan: I want to thank Exceedra for making this conversation available to you. And for inviting me to participate in their event. I'll be certain to leave a link to Exceedra in the podcast show notes and on the podcast webpage. Today's free downloadable guide is eight strategies to maximize trade marketing ROI. This will get you started. This will help kind of frame what you need to know so that you can more effectively manage your trade marketing. So that you can more effectively drive sustainable sales without spending a ton of money. This gives you more runway and it makes your business more attractive to future and potential investors. You can get this free downloadable guide at brandsecretsandstrategies.com/session140. Thank you for listening, and I look forward to seeing you in the next episode.

Exceedra http://www.exceedra.com

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