Product (business) | The Barefoot Spirit

Outword Magazine Interview

Michael Houlihan & Bonnie Harvey — Fri, 01 Jun 2012 17:09:10 +0000

Barefoot Wine’s Founders Do Well By Doing Good

The story of how Michael Houlihan and Bonnie Harvey in 1986 launched a scrappy new brand that would transform the US wine industry is one of accidental opportunity and the vision and courage to seize it. “We fell into business backwards,” Harvey says today.

And seize it they did. Houlihan, a wine industry business management consultant, and Harvey, an office manager, got their accidental opportunity when one of Harvey’s clients, a grape grower, was left on the hook for three years’ worth of grape crop by a winery that turned out to be in the roes of bankruptcy.

In the course of negotiating payment for his grower client, Houlihan persuaded the winery to bottle up and repay the grower in Cabernet Sauvignon and Sauvignon Blanc bulk wine – wine made from the very Alexander Valley grapes, it turned out, that had come from Harvey’s grower client to begin with.

That was a start, but once they had the bottled wine, they still needed a label, licenses, a distribution system and marketing, Houlihan says. “We didn’t know what we were doing. That started a period of research.”

Michael Houlihan and Bonnie Harvey toasting to your good health with one of their favorite Barefoot Wines.

They began to research the wine business, talking to government officials, suppliers and retail stores. One of the first companies they approached about carrying their as yet unbranded wine was Northern California-based Lucky Stores. A Lucky executive advised them on what type of wine would sell. The ideal label, he told them, should be visible from a 4-foot distance, should stand out from other labels, be an easily pronounceable name, and the label image should match the name.

The plan hit another snag, though, when Harvey’s grower client decided he did not want to be in the business of
marketing and distribution. The solution: Harvey and Houlihan hired him to be their winemaker.

Now that they knew a little more about what they were doing, it was time to create their label. The label image – a bare foot – came to Harvey in a vision. They sent the concept to an artist for development, but the perfect shape and angle of the foot eluded her. The perfect foot, it turns out, was at the end of Harvey’s leg. Using the biggest inkpad they could find, Harvey stamped her foot on a piece of artists’ paper, and the famous Barefoot label was born.

Meanwhile, they converted the laundry room of the Sonoma County farmhouse they rented into their winery HQ, removing the door and placing it across two sawhorses for a desk.

Now that they had their bottled wine, their licenses and their label, they went back to their Lucky Stores contact – only to come up against yet another roadblock. They Lucky exec said he couldn’t buy their unknown brand of wine until the two had spent a couple million dollars in TV advertising. Without $2 million to spend on branding, he said, “You can go out and sell to every little grocery store there is.”

So they did, starting in the Bay Area, then expanding to independent grocers in Santa Barbara, Mendocino, Lake Tahoe and Sacramento. In 1988, Lucky Stores become the first chain to carry the Barefoot brand.

Harvey and Houlihan hired Randy Arnold as Barefoot’s National Sale Manager after noticing Arnold was outselling other distributors. Shortly after joining the company, Arnold decided to come out publicly as a gay man. It was 1990, a time when AIDS was devastating the gay community, and ignorance and fear of contagion were widespread. Arnold was concerned the resulting prejudice, particularly in the conservative wine industry, might damage the Barefoot brand. “For us to hire a gay national sales manager for a food product was very gutsy at the time,” Harvey recalls.

With no marketing budget, but with a large stock of wine, Arnold expanded Barefoot’s “worthy cause marketing” plan by donating Barefoot to LGBT organizations and causes. Other staff members questioned the strategy. “Aren’t you worried that your wine will be known as the ‘gay wine?’” they asked. “We said, we’re worried that it won’t be, we are putting so much energy into that community,” Houlihan recalls.

Barefoot has also donated wine and sponsored fundraisers for environmental organizations such as the Surfrider Foundation. The strategy has paid off. Before long, the Barefoot brand was a top seller in LGBT communities and in beach communities.

Their marketing success, and the causes they support, Harvey believes, are connected to that vision she had of the Barefoot label. “When you see a bare footprint in the sand, you don’t know if it’s gay or straight, black or white, or what religion the person is,” she says. “That’s the print humans make on the earth when they put their foot down. The footprint is symbolic. We are all out here on the same beach together.”

By the time Harvey and Houlihan sold Barefoot Cellars to E&J Gallo in 2005, its sales had reached almost 600,000 cases annually in North America, Asia, and Europe. The two served as consultants to E&J Gallo for the next year, and Gallo has continued Barefoot’s tradition of worthy cause marketing as its primary means of advertising.

Today, Houlihan and Harvey are putting their branding and marketing expertise to use as consultants to start-ups and entrepreneurs and are volunteering their services to non-profit groups seeking to keep California parks open in the face of budget cuts. In their spare time, they’ve written a book, The Barefoot Spirit: How Hardship, Hustle and Heart Built A Best-Seller, which is due out later this year. Visit BarefootWineFounders.com to pre-order.

Outword Magazine May 24, 2012 Volume 25 Issue 10 No. 457
Words by Bonnie Osborn

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Kindred Spirits, Fellow Travelers, and Strategic Partners

Michael Houlihan & Bonnie Harvey — Sat, 31 Mar 2012 20:27:19 +0000

One of the most effective and often over-looked resources to build and grow your business is strategic alliances. “Partnerships” with other businesses and organizations who benefit by your success can help you meet your bills, get the word out about your company, and improve your image.

Who succeeds if you succeed? As your business begins to grow and gain traction, you may find new allies you didn’t know you had. Being aware of who they are and constantly looking for new ones are great hallmarks of sustainable business success.

Here are a few types of strategic partners and how to best work with them to your mutual benefit:

Suppliers and Service Providers generally want to see you succeed because that results in greater sales of their products and services. They have at least two major concerns: First, if they give you extended credit; will you still be loyal once you get on your feet, or will you run off to their competitor? Second, will you pay on time, or will you be a beg pay? Allay these fears with a long-term contract that protects both your price and their future. Give them periodic progress reports to let them know how you are doing. When you first realize you can’t make a payment on time, call them well in advance, and give them your payment plan. Be a real partner.
Distributers and Wholesale Buyers want you to succeed because they are profiting from the sale of your product. Their goal is to sell more of your product. Help them with local grass roots promotions that send them customers. Assist them in merchandising your product. Offer quantitative discounts when you are in a cash flow bind. Increase their profitability and volume, making it possible for them to reduce the price to your end users. Your product is far from sold when you sell it to your distributer. By helping your distributors and their retailers sell your product, you will solidify this partnership.
The Media will help you get the word out. Find the press writer or blogger who will benefit from being the first to announce your company’s new offices, improved products, or other business news. By going to her on a regular basis with exclusive stories, she becomes the unofficial spokesperson for your company. She needs the latest scoops and hot news breaks to improve her reputation. She will be more likely to publish articles about your company if you go to her first with news worthy stories.
Nonprofit Organizations you support want you to grow. Your success will spread the word about their goals through your distribution channels, resulting in more dollars, man hours and donations to their cause.
Worthy Cause Marketing can be more effective and cost efficient than conventional advertising to acquire and retain new customers. Identify with a cause that resonates with you, your brand, or your business. Give the organization’s membership and supporters a social reason to buy your product. Make your business stand for more than the product it sells by getting involved in their goals.

As you set out on your journey, don’t overlook your fellow travelers. Look around you, and see who else is going your way. Then give them a lift. They will do the same for you.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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A Solid Business Foundation is Necessary for Success

Michael Houlihan & Bonnie Harvey — Fri, 02 Mar 2012 02:41:14 +0000

When you build a house, the foundation must be laid strong and straight. If it’s not, the framers try to make up for it. When they can’t, the drywall guys try to make up for it. When they can’t, the painters try to make up for it. When they can’t, you’re going to have to live with it. So rather than cause problems all the way up your structure, lay your foundations straight and true.

It’s been said that it’s not the journey of 1000 leagues that wears down the mighty soldier, but the tiny pebble in his shoe. Here are some philosophical considerations that can help lay the foundations for your business and make the journey less wearing:

1. Have you put yourself in your customer’s shoes? Does your product add value to your customer’s life? Is it dependably available? Are you willing to do what is necessary to provide exceptional customer service? How will you gain feedback and keep your product relevant?

2. Have you put yourself in your distributor’s shoes? Do you know why he would carry your product? Are you willing to help him sell it? Do you understand the processes involved? Do you know why his retail customers buy your product? It might not be for the reasons you think.

3. Have you put yourself in your own people’s shoes? What are their goals, expectations, and aspirations? What kind of training and direction do they need? Are you willing to write down policies and procedures? What kind of culture will you provide? Will they be compensated to perform?

4. Have you put yourself in your creditors’ shoes? Are you willing to provide honest communication even when you can’t perform? Are you concerned about their payables? Will your integrity give them a reason to increase your credit and terms? Would you lend money to yourself?

5. Are you willing to take a smaller slice of a larger pie? Are you willing to share in the increased profits with those who make it possible? Are you going to reduce the cost of turnover by providing financial opportunities to stay with your company?

6. Do you know how to make mistakes right? Will people be fired because they made a mistake? Will your staff hide mistakes as a result? Or will you reward those that solve potentially reoccurring mistakes by identifying how they were made and suggesting new documentation?

7. Do you understand that sales provide all the income for your business and pay all your salaries? Will you organize you company, pay structure, and culture accordingly? Will the customer be on top, then the sales and customer service people, then everyone else?

The answers to these questions will determine the philosophical foundation of your business. Everything else that follows is influenced and shaped by those answers. Make sure you have answered them honestly before you begin to structure your business. The journey is hard and long enough without a pebble in your shoe.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Improve Your Chances of Success by Starting Small and Carefully

Michael Houlihan & Bonnie Harvey — Fri, 24 Feb 2012 04:26:18 +0000

As long as your product is not in a specific market or retailer, it can’t be discontinued. Once you are discontinued you may never get back. You’ve got one shot. Take careful aim and hit just one bullseye at a time.

The shotgun approach may get you more distribution in the beginning, but, due to complications and idiosyncrasies in the distribution system, or due to you own underestimations of labor and oversight, your product can be easily discontinued in several parts of the larger market. This will give your product a stigma with new buyers that is almost impossible to live down. Even if you are lucky, it may take years to get back in.

It’s better not to be there yet, than to be there and fail. So how can you approach the roll out of your new product when you are a small, undercapitalized start-up?

Be humble. Don’t assume anything. Remember that yours is just one of the thousands of products in the system. Regardless of how good it is, or how well it’s priced, it can be lost in the shuffle, ignored by the buyers, or squashed by the competition. It’s OK not to know it all.
Start Small. Give yourself a sales area you can easily monitor and control. You will probably find that you need to get to every retailer on a regular basis. You will be surprised at what you have to do to keep your product on the shelf.
Start Slow. Do a test market to get a feel for the distribution realities. Out of Stock is the number one cause of failure for new products. The faster it sells, the more you can run out and lose your precious shelf space.
Take notes. Start a journal that can be converted to policies and procedures, check lists and sign-off sheets for later when you expand. Don’t just fix the problem. Write it down so it won’t happen again and develop your training manual.
Don’t believe everything you hear. “It just didn’t sell, you should lower the price, and send more sales materials” are the common excuses you will hear. Many times it turns out to be that it just wasn’t on the shelf at all! It never had a chance.
Do the other guy’s job. Don’t say, “I thought they were supposed to take care of that.” Your goal is sales, not blame. At first you may have to make all the sales yourself and get most of the reorders as well. You have to be there to do that.
Build a Hot Seller reputation. It’s OK not to be everywhere as long as where your product is, be it ever so small a market, it is on fire! The leg work you put into your first small markets will give you bragging rights in the next one.

Each market is different with its own peculiarities, but all markets require vigilance that requires more manpower than your small start-up can field. You may underestimate what it really takes. Brands don’t just take off. They get pushed and pulled through a complex distribution system.

Some brands are mediocre, but readily available on every shelf in America. It’s because they have excellent distribution and the merchandising forces to keep their products there. There are many wonderful, imaginative products that expand too quickly and get discontinued. They got the reputation, “they just didn’t sell.”

They can’t sell if they’re no longer on the shelf. They can’t be discontinued if they were never there. So make every small step a winner.

The big boys are looking for proven products to acquire. Proven doesn’t necessarily mean national. With even small market penetration, with repeat and loyal buyers, you can become an acquisition target, but only if you have not been DC’d. The big guy wants to expand your success with massive market penetration because he can. In fact, he views your product as more desirable when it is brilliantly executed, and there is still lots of room for him to capitalize on a proven formula.

Avoid the urge to expand too rapidly, and remember it’s easier to give birth than to raise the dead.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Dress for Success (Especially in the Office)

Michael Houlihan & Bonnie Harvey — Mon, 09 Jan 2012 02:35:50 +0000

Many companies these days seem to think that they are giving their office staff some kind of a benefit by letting them dress any way they want. Business casual has become casual and casual has become downright scruffy. What happens when Mr. Big walks into your company and your people are dressed in a way that doesn’t telegraph customer service and professionalism? Before you can say anything, your new client has made a judgment about you, your company, your service, and your product based on how the first person he met was dressed. Now, un-ring that bell! It seems old-fashioned and unpopular to enforce a dress code, but before you write the whole idea off, consider the following:

Are you influenced by the way your retailers, vendors, and people trying to sell you something are dressed? How would you like it if your pilot wore jeans, your attorney wore a tee shirt, your doctor wore a sweat shirt? Would you be more likely to chose a service or product presented by a crisp and sharp dressing representative? Why give the advantage to a competitor who gets the “first yes” just because of the way she dressed?
Is your staff influenced by the way other staff members are dressed? When your staff looks around at their fellow staff members, does the dress they see convey expectations for productive and time-sensitive action, or is it a message that is laid back and disorderly?
Are your sales people influenced by the way your office staff is dressed when they visit? Most sales people have to dress at least business casual or better to gain the respect of their clients. Their success pays everybody’s salary – everybody’s! What kind of message do they get when they visit the office? Do they think “hey, these guys are with me!” or do your sales people think that they are somehow separated from your office staff?
Are your vendors influenced by the way your people are dressed when they visit your offices? Your vendors can provide valuable information about the market, your competition, discounts, how to buy to be the most cost efficient, and advise you about overstocks that you can pick up cheap. Do they want to waste that valuable information on what appears to be a laid-back company? Do they want to save it for a company that looks like they mean business and will expand and give him more business?
Is there less likelihood of problems between the genders when they are dressed to a certain standard? When men and woman are in business dress they tend to view one another as professionals, on the same team, playing by the same rules, and with the same business goals. They know they appear as capable go-getters and are proud of it.

When we had Barefoot Cellars, everybody thought, because of our beach and care-free California lifestyle theme, that we would be wearing go-aheads, shorts, and T-shirts in the office. They just naturally expected a laid back staff with surf boards out in the lobby. In fact we all wore business suits!

Customer service is Job One. Once your people start to get bonused on the profitability of your company, they’ll want to do everything they can to give your company the edge. They’ll want to dress for success. The way you dress in business reflects your respect for the impressions you and your staff give to your customers, vendors, sales people, bankers, and each other.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Positive Company Culture is critical to Growth and Survival – Part 3

Michael Houlihan & Bonnie Harvey — Sat, 31 Dec 2011 21:05:55 +0000

This is the third part in the series about the original Barefoot culture. Culture really sets the tone, boundaries, and expectations the team has toward your company, your mission and your product.

We’ve saved the best for last because having a common cause and a common challenge forges, more than any other single factor, positive company culture.

When you are growing especially a new a brand, something out of the box that has never been done before, you are going to face stiff resistance from the distribution channels and the retail establishment. You can’t blame them because what you are attempting to do is new and unproven. We jujitsued that resistance into the glue that held our team together and gave it a common cause.

The Culture of Common Causes

When Barefoot was trying to get traction in the marketplace, it was an uphill battle. Just to keep the bottles on the shelves was a daily struggle. The Barefooters ( Sales Reps) spent much of their time just replacing vacancies and point of sale materials that had been removed by competitors. Being a small company, Barefoot did not yet have the respect of the distributors or the retailers, and, therefore, did not warrant the attention required to keep the product in stock. Every Barefooter faced the same challenge all over the country.

“How could you put a foot on a wine label?” is what the wine snob detractors were demanding at the time. They thought it was just a passing fad, and a wine not to be taken seriously. The Barefooters were out to show them differently, and they did! Thanks to a great winemaker, Barefoot wines kept winning more medals than any others in the same price category. There’s nothing like team victory to bind the team together!

All the sales staff knew that Barefoot was indeed destined to become big, very big, so they worked together, shared war stories and kept each other energized. They felt like Davids, up against the Goliaths of the wine industry.

They also knew that their fellow Barefooters were actively engaging the ultimate market, the general public. They knew that Barefoot had a “secret weapon”: worthy cause marketing. They were making the world a better place through wine, and they were proud of it.

These forces forged a real team spirit and life-long friendships between the Barefooters. They all knew that it takes a certain type of person to be a Barefooter. They were happy to be one of the team, and they sincerely enjoyed each other’s company and support.

The original Barefoot culture was based on the human desire to have a positive effect on the industry, the community, and the environment, and to be recognized and appreciated for it. It was a philosophy of win-win-win.

Although the example of the original Barefoot culture was that of a consumer product delivered through conventional distribiutions channels, we hope that the lessons we learned will be helpful to you and your business no matter what it is. Good luck and good selling with a positive company culture!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Positive Company Culture is critical to Growth and Survival – Part 2

Michael Houlihan & Bonnie Harvey — Fri, 23 Dec 2011 20:19:28 +0000

A company survives and grows due to sales and the loyalty of customers and staff. Sales are based on price, value, dependability, integrity, availability and perception. The basis of perception is image, networking, and more recently, the transparency of the producer.

Transparency is what the brand stands for, its authenticity, its identification with higher values, and the actions it takes to demonstrate those values.

When companies subscribe to a higher order of value, beyond the products they sell, they have an advantage in today’s marketplace. Employees excel, and tend to stay with these companies, providing long-term relationships with retail buyers, customers and complementary organizations.

The Culture of Customer Service

At the time Barefoot Wine was founded, the business model was considered radical. The founders viewed it as more of a “service” rather than merely a product. At Barefoot’s price point, which we termed the “velocity price point”, it was clear that it could not survive without becoming “America’s Personal House Wine”. From the beginning, it was understood that it had to sell massive quantities to stay in business.

“Personal House Wine” was defined as the wine one serves in one’s own house as a staple: “Tuesday night wine, picnic wine, beach wine”. It was the wine to always keep on hand. It was the brand you discovered that consistently delivered the quality and value you had come to expect from your own “personal house wine”.

The company knew that customers (“foot fans”) would be loyal to the brand as long as the price remained stable (at the velocity price point), the taste profile was consistent (delicious), and it was available and easy to buy (in stock).

The original Barefoot culture wa based on the most comprehensive definition of customer service. Imagine a company that, through worthy cause promotions, encouraged customers to go into specific retail establishments to buy their brand. Imagine a company that viewed its displays as retail entertainment, adding color, fun, and theme sets for the enjoyment of its customers! This is the ultimate in customer service to your retailer, your end-user, and to your community.

The Culture of Acknowledgement

People are motivated by goal achievement, but also by public recognition. It not only validates their creativity, but it send a message to the rest of the troops that this type of behavior is not only appreciated, but also identified and exemplified.

Appreciation goes a long way toward building team spirit and encouraging everyone on the team to be creative in a productive and fun way. They know that top management and their teammates will recognize their achievement and are not afraid to speak up about it. They are encouraged to create imaginative promotions and fun events.

Public acknowledgement, especially in written form, circulated to all staff, is validation. Employees want to know that they are contributing, and that their efforts are being appreciated. Third party validation from managers, peers, customers, associates and non-profits builds confidence to go out and do more of the same, or better! It also give your people an appreciation of what their team mates are doing to improve everybody’s circumstances.

Positive company culture is the foundation of company success. It reduces turnover, improves morale, cooperation and overall team spirit, all of which result in increased imagination and productivity. Next time we will examine the culture of Common Causes.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Beware of “Money Saving” Suggestions from Your Non-Sales Staff

Michael Houlihan & Bonnie Harvey — Sun, 20 Nov 2011 23:57:02 +0000

Let’s start by realizing that there are really only two divisions in every company, Sales and Sales Support. Since Sales Support includes everyone not in Sales, Sales Support consists of Production, Accounting, Marketing, and so on. Without sales there is simply no money for Sales Support salaries. Still, Sales needs Sales Support to perform.

The Sales people are doing their job out in the field. The non-sales people are at the office or at the plant everyday. They’re the ones you see most often, and can be the most influential.

In their desire to help the bottom line, non-sales people may be undermining sales. They often propose various money and time saving ideas, which is wonderful, but it’s up to you to protect sales. Many well meaning suggestions contain these preamble phrases to look out for:

1. “Why don’t we just…?” This is how the suggestions to cut costs usually start. The suggestion itself indicates that they don’t know why we “don’t just.” Be on guard for this because both you and they must know the reasons why “we don’t just.” A thoughtful discussion usually will result in many answers to this ageless question.

2. “Why do we have to…?” This is usually followed by a suggestion to make their job easier, thus reducing labor costs. This may indicate that they don’t really know or understand why they must do this or that. There are many subtle quality queues and nuances in your product or package that they may not realize. They may well have a good suggestion, but make sure it is not at the expense of sales.

3. “If we just cut this out, we could save…” and they do the math. This is usually a simple multiple of a small savings times the number of units sold. Beware! This may hurt sales in ways they know nothing about. This thinking is based on the assumption that sales will remain at the current level, before the “cost” savings or “labor” savings idea went into effect. Savings can rarely be as simple as a mathematical formula. By discussing the need (or lack of) the particular part of the product or package they are suggesting be eliminated, you both will come to a better understanding of what is necessary to make sales happen.

4. “I just came up with this great idea!” Some suggestions stem from your people’s desire to make their mark on your product or package. Sometimes their motive is career, sometimes it’s based on a desire to be more like your competition, or they may think “its time for a change”. Your product’s uniqueness may be the very advantage that distinguishes it in the marketplace. Consistent packaging and logo designs are critical to your product’s image of dependability.

5. “This will increase sales.” Your marketing people can make or break your company. They may have a tendency to think they have control over your sales people, and that your sales people must use what they are given. What they design on their computer screens may look fine to them and the other marketing people, but until it has it been field-tested, whether or not it will “work” is an unknown. Marketing is expensive, so think carefully before funds are spent on a new idea.

Your Sales Support staff is well meaning, and you should welcome their ideas. In my next article, we will discuss how to keep the good suggestions coming, and how to make money and time-saving decisions that won’t hurt your sales.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Distribution: The Distance between a Great Product and a Sale – Part 4

Michael Houlihan & Bonnie Harvey — Tue, 15 Nov 2011 19:11:12 +0000

In the previous three posts we have given just a few examples of the importance of Channel Distribution Management in product design. Here we will examine two of the most important factors in product distribution through conventional channels:

14. Stack it! It is great to get your product on the retail shelf, but getting it stacked on the floor is infinitely more valuable. When your product or brand is new, there is no better way to announce its arrival than a colorful floor display. Floor displays are at the option of the retailer, but retailers are more likely to grant you the coveted floor space if they believe they can move your product quickly. This may require special pricing, local promotion, merchandising assistance, special signage, and months of preparation and scheduling. Retailers want to floor display products that have a demonstrated record of brisk sales, a real Catch 22 for new producers with no track record. However, a strategic plan that starts small and demonstrates brisk sales with adjacent retailers will give you and your product credibility.

15. Reorders are more important than orders! Without the reorder, all your work to get your product to the retailer is lost. This is why eternal vigilance at the retail level is essential. There are many reasons why retailers don’t reorder besides the obvious, “The price was too high,” or “The quality was too low.” Here are some examples:

Your product sold out and the retailer forgot to reorder because he was not used to reordering it.
The retailer’s distributer that supplies your product did not deliver.
The distributer delivered the wrong product.
The distributer’s sales person loaded the retailer up last month with products that have yet to sell and now the retailer doesn’t want to order anything from that sales person, including your product.
Your product is still in the back room and never made it to the shelf.
The invoice was wrong and the price was wrong.
Your distributer’s sales person simply did not ask for a reorder.
Your products UPC number was incorrectly entered at the back door and was refused.
Your product UPC number was incorrectly entered on the scanner at the check out.
Your product’s shelf reorder ticket was lost or removed.
None of your Point of Sale signage was up.

If you don’t have your own representative in that city, visiting that store on a regular basis, your product could be easily discontinued for any of the reasons above, and more. And everyone will tell you, “It just didn’t sell”.

There are many more distribution factors to consider before launching any product. The most successful products treat distribution as more important than the product itself.

In most chain stores, you get only one chance…forever! The good news is that your product can’t be discontinued if it isn’t there yet. Do your research. Start small and slow.

There are warehouses full of great products that never made it to the shelf. There are shelves full of many products that are less than great … but they have great distribution. Customers buy what’s there, and they can’t buy what isn’t.

Your product is only new once. So take the time to build the distribution requirements into your product and your budget. Hit a home run at your first and only time at bat!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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The Easiest Way to Lose your Customer

Michael Houlihan & Bonnie Harvey — Sun, 07 Aug 2011 06:37:23 +0000

If you think all you’re selling is a product, think again. In order to continue to do business with your new buyer, you must also sell a service. The demand for customer service increases significantly after the first sale is made. That’s when your customer sees if you stand behind your products, and how you treat their company. Here are some suggestions to forge that critical relationship that will pay off with return business.

1 Thank You’s: The most effective is the simple, snail-mail postcard. It thanks her long after spoken words are forgotten and emails have been deleted. It’s personal and in your own handwriting. It passes through everyone’s hands at the buyer’s office and stays out for days.

2 Check back: Give her a call. Ask if she got what she expected and how your products are working out for her. Inquire if she would like a different configuration or quantity. Be ready to exchange whatever is necessary to demonstrate that you care about her success with your products.

3 Pay a visit: See for yourself if your products are moving for your buyer. Can her customers see your products? Are they still in the back room or the warehouse weeks after they were delivered? Are they priced right? You or your representative must take responsible for her success with your product.

4 Get the reorder: Especially when your product is new, it is easily discontinued. Your buyer and her clerk are not yet in the habit of reordering it. Your distributer’s rep may forget to ask for the reorder because he cannot see it on the shelf, or worse, want to put something new in its place. You must watch all your new placements like a hawk.

5 Sell everybody: Often you have to sell your products to everyone along the distribution chain. Remember that the managers, clerks, and even the warehouse people all represent critical links in a fragile chain between you and the ultimate user. If just one person along the chain doesn’t perform, it may never get to the end consumer. Your product will be blamed, and you will hear, “It just didn’t sell.”

6 Bring in customers: Raise local awareness and demand for your product. Don’t assume that just because it’s the best buy or delivers exceptional value, it will automatically sell. You have to get the word out. Give your buyer’s customers a reason to purchase your product.

7 Take an expanded view of customer service: If you have a product that is a profit center for your buyer, you owe it to her, as a matter of good customer service, to keep her in stock. Sometimes a month or two can go by before your buyer realizes she’s out. By that time her sales reports indicate that your product is not selling. Don’t let her discontinue your product because it sold so well! Remember, the best sales person is the “assistant buyer.”

New products may come and go without anyone really noticing. Stay on top of all your first time buyers. Deliver the expanded view of customer service and you won’t lose your customer right after you make the first sale.

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To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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