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B2B or Not to Be? That is the Question!

Michael Houlihan & Bonnie Harvey — Tue, 24 Apr 2012 20:13:01 +0000

We often hear, “Oh, we’re B2B (business-to-business), so we don’t have to worry about customers at the general public level.” The fact is, you do.

It is an erroneous assumption that B2B is somehow insulated from the source of most income, the general public. If your client goes out of business, your B2B loses that account, and you lose an income source. Of course you need to worry!

The more your company understands and assists your clients to sustain and grow their customer base, the better your chances of keeping that revenue. Don’t be the last one to find out your client is in trouble. Be proactive and help them stay healthy so you too will benefit from their success.

Here are some ways your B2B can help your client or customer:

1. Take an interest in how they make their income, including its source. Is it another business that sells to another business that eventually sells to the public? How many layers exist before reaching the end-user? Do they sell direct to the public?

2. Take an interest in their industry, including the trends that are on the rise or decline. Are your customers experiencing rapid growth, or having difficulty maintaining their market or price points? The answers to these questions can give you a big hint about how you can possibly help them.

3. Show them how to buy your products or services to best match their current needs. When they are in a growth cycle, provide them with discounted quantity purchases. When they are struggling, provide them with longer terms. By being sensitive to their needs beyond your product or service, you help them and your company succeed.

4. Provide them with information and objective feedback. Show them that you care and act like an engaged team member. Your input will be respected since they know you have an interest in their success. You may have some insight that only an outsider could have, or you may see something in the market that they may have missed.

5. Keep your eyes peeled for talent. You may have more contacts than they do, thus, you may be aware of hiring opportunities they may not know about. Find out what they are looking for and pass the word. Strong companies and strong clients are made up of strong people. It’s their most valuable resource.

6. Call for a meeting in person, if possible. Ask about their business challenges, growth, and customers. Let them know you care about their business and are interested in helping them succeed. A face-to-face will reveal lots of information that an email or phone call can never achieve. And it helps build an invaluable personal relationship.

When you think about it, there are many ways you can help your client remain viable beyond what you are selling. You will win their loyalty and increase their purchase orders by being a real team player.

No business is truly isolated and insulated from their client’s customers. As these last few years have painfully demonstrated, we are all interdependent. The more you know about your customers, the more you can help and the more your B2B will continue to be.

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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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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Distribution: The Distance between a Great Product and a Sale – Part 2

Michael Houlihan & Bonnie Harvey — Fri, 28 Oct 2011 20:02:37 +0000

The least glamorous but most essential part of making a sale is actually getting your product to your buyer. Many great products are rotting in warehouses somewhere because their designers didn’t take the realities of the distribution system into account. Here are additional questions product producers need to consider:

6. How will you stage your product for shipment? Most products are stacked on a pallet for easy loading and unloading from a truck or container and forklift handling in a warehouse. How many items will sit on a pallet? What is the optimal shape of the package to maximize the number of items per layer and per pallet?

7. Who benefits in the distribution channel when your product sells in volume? What are the advantages to a distributer to carry your product? Does he prevent his competition from getting it? Does he have the exclusive? Is he concerned that he will build a market for your product only to lose it later? Choose your strategic alliances carefully and thoughtfully.

8. What are the alternatives to mainstream distribution for your product? Is there a start-up distributer who would give your product more attention than the big guy? Would he pay on time? Are there key retailers who will buy your product directly? Will they use your dependence on them to require you to reduce your price?

9. Will you have to program reduced prices on an intermittent basis to get the attention required to get your product sold in quantity, displayed, and advertised? Will the retailers pressure you to maintain your reduced prices beyond what you budgeted? Will they only buy when your product is on reduction?

10. Does your distributer need help? A distributer once told us, “God and distributers help those who help themselves.” With the consolidation we have seen in the past 10 years in every industry, are they overloaded and overworked already? Do they really have an incentive to build a new brand? Will you need a representative in every market your product is sold to help make the sales, get the reorders, and provide the sale support?

These considerations are critical during the inception stage of any new product. The answers to these issues may affect everything from the design of the packaging to the pricing structure. Just having a “cool” product isn’t enough. You have to say hello to your truckers, distributors and warehouse people. Knowing their jobs and their limitations will give you an advantage over your competition. You have to understand how much work you will be required to do even if you think it’s the other guy’s job.

Next time we will examine test marketing, push and pull, shelf, set, displays, and the life blood of any business, reorders. A well-designed product has to satisfy all the demands of distribution and still be a terrific product!

Who We Are

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

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The 8 Principles of Successful Outsourcing

Michael Houlihan & Bonnie Harvey — Sun, 10 Jul 2011 10:58:29 +0000

For the most part, there is usually no shortage of products. There is, however, a big shortage of Purchase Orders. Why tie up precious dollars in bricks and mortar when you really need to spend them on marketing and merchandising? It’s possible, and in many cases preferable, to outsource as much production and services as you can. This gives you the time and funds required to control quality, give good customer service, and focus on the real challenge, sales. Here are some tips for effective outsourcing:

Look for businesses that specialize in one or more aspects of your products production. They are either already an outsource service, or they are a business like yours that invested in facilities and needs the income you offer. (Many businesses focus on production and then try to sell their products; you can do it the other way around.) Reduce your investment risk and focus on sales.
Write your own contract. He who writes, wins. Craft a contract that pays for finished, quality products, and not time or equipment. This way you do not pay for their mistakes or downtime. This eliminates the potential disaster of producing an inferior product yourself, and either trying to sell it or losing the money it cost to produce.
Hire a cop. Even though you only pay for finished quality produces, you still need a manager on-site to monitor production. Make sure your production manager thoroughly understands the job they are inspecting. Excellent prospects can be found in the industry you need to monitor.
Alter your product and packaging to be more efficient for the producer and their facilities. Clearly identify their constraints, equipment limitations, and profit centers. Your supplier generally will be happy to work with your producer. Bring them together at an early stage to help you make the process more productive for all involved.
Don’t waste a perfectly good mistake. Make mistakes right. Start a checklist. Every time your outsourced service or producer (or even your own people or suppliers) foul up, write it down. Now, see what documents you can improve, like contracts, checklists, signoff sheets, labeling, or outlines of operations. With each mistake, you’ll just get better!
Renegotiate your contract often. As you grow, you will experience volume buying and selling opportunities that may impact production, storage and shipping. Ideally, get your producer to hold inventory at no charge for a negotiated period of time to achieve efficiencies of scale in material purchasing.
Be efficient. Work with your producer’s schedule. Make full use of your production day or shift. Get the best prices by being flexible and have all your materials lined up for last-minute shipping. Just-in-time production will save you on storage costs and ultimately reduce your cost of materials.
Look for every opportunity to outsource. Every time there is an opening in your staff, ask yourself these questions: Can this job be outsourced? Can I reorganize my business so I don’t need that position? What other aspects of the total remaining job functions can be outsourced? Your most valuable staff have good oversight skills, understand quality control, and excel at sales and customer service.

Outsourcing can free up you and your limited capital to focus on Quality Control, Sales, and Customer Service. These are three of the most important elements of success. This is what your customer really buys. Instead of being stuck with less than perfect products you produced and now have to sell, consider outsourcing, and pay only for quality.

Who We Are

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

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10 Tips For a Start-Up Business with No Money

Michael Houlihan & Bonnie Harvey — Wed, 20 Apr 2011 13:57:16 +0000

OK, you need some money to get started, but you can seriously reduce the amount if you take advantage of some of these suggestions. Every one of them worked for us:

Start in the garage, a spare bedroom, even the laundry room the way we did. Go anywhere you won’t have to pay rent.
Get your family to help. Retired grandmas, aunts and uncles would love to make a difference in your life, and they’ll probably be thrilled to do something new and help the family business get started. Who knows, they may do a lot more for your start-up than just add manpower. They can also provide objective opinions and common sense insight. Bonnie’s mom came up with the term,”Barefoot Bubbly”.
Assume someone else’s excess inventory. Find a way to sell or repurpose unsold merchandise. When you do, you’ll find sales cure-all ills.
Outsource everything except quality. With outsourcing, you usually pay only when the product is produced – and produced to your quality specs. Oversight is critical. What little money you may have is better spent on marketing than production facilities.
Use ‘Worthy Cause Marketing’ to advertise your product or service. Find and support a non-profit that resonates with both your core values and your target customer – their members will have a social reason to buy your product. Help them by getting the word out about their cause through your distribution channels, and they’ll help get the word out about your product.
Trade the goods and services you have for goods and services you need. Many start-ups besides yours, especially in their early days, will prefer this option to spending money, just the way you do. So find other start-ups that have what you need and need what you have.
Forge strategic growth alliances with suppliers. You help them grow their business when you become a bigger and bigger customer. They help you grow by extending terms and providing special discounts. Get your suppliers to extend your credit because they like the way you pay your bills. Call them as soon as you know you will be unable to pay on time and give them a workable payment plan.
Give discounts for cash and large volume purchases. It will put you ahead of your bills. Your buyers will sell your products faster putting them on special and advertising them to quickly recover their warehouse space.
Sell your product overseas. Most international transactions are cash sales based on a signed ocean-going bill of lading through a letter of credit. It’s kind of like an escrow account where you get paid when they take possession.
Produce just-in-time inventory – a product that is ready just in time for the sale rather than filling a warehouse with your product. Ideally get the Purchase Order first. If that’s not practical, operate with the minimum inventory you need to satisfy your customers, assuming a reasonable growth factor that you reassess every month.

These are just a sample of the cost saving measures Barefoot Wine used to survive and grow in its early days. Being undercapitalized was one of the things that forced us to be resourceful and think creatively – just some of the advantages of being broke with a good idea.

Who We Are

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

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