“Money is plentiful for those who understand the simple laws which govern its acquisition.” -George Clayson
In an era of flat to declining sales, what can beer distributors do to increase sales?
Store shelves aren’t getting any bigger and customers aren’t drinking more beer. Time to put on the thinking cap, get creative and explore new ways to increase the top line sales volume.
In this issue, we’ll review three ways to increase sales and how each can be applied to your beer business.
Business experts have shown that there are only three ways to increase sales. Seems like there should be a million ways to do this, but they fall into just three categories:
- Increase the number of customers
- Increase rate of sale (how much retailers spend when they buy)
- Increase the frequency of sales (how often retailers buy)
Let’s dig into the details of how to increase your beer sales.
Increase the Number of Customers
The typical approach to increase customers is to identify accounts in your market that don’t buy from you and try to sell them beer. Distributors run buy / no-buy reports, develop a targeted list of accounts that aren’t currently buying, and work to get the sale. This does work, but it takes a lot of time and energy.
Another approach is to take on a new product line, such as non-alcohol products or snacks. This will allow you to expand distribution to a new account base – usually unlicensed accounts – those accounts that don’t sell beer, but do sell non-alcohol drinks and snacks.
There may be opportunities coming soon in the recreational marijuana business. But that’s a story for another day.
If you have the opportunity to buy another beer or non-alcohol beverage distributor in an adjacent market, this will immediately increase the number of customers. With the purchase of the new company, you’ll acquire a new market full of new retailers to sell to.
Buying another distributor is a big investment in time and resources. To learn more about this option, check out the article on how distributors are valued here.
In my experience, we have used each of these methods to increase the number of customers. Some are easier or less expensive than others, but all of them will increase sales.
Increase the Rate of Sale
The rate of sale is how much your customers spend when they buy from you. This is determined by running a report of average sales per delivery.
In my experience, regular customers tend to buy about the same amount every week. There are swings depending on the season or occasion – 4th of July week is crazy busy and the middle of February is slow, for example. Take out the highs lows and you’ll find that customers are in a routine and buy about the same amount every time.
One effective method to increase the rate of sale is to use the upsell. An upsell is a sales technique where the seller suggests additional purchases (upgrades or add-ons) that the customer may like. Amazon is brilliant at upselling customers: “Customers who bought this item also bought these items.”
Think about how you can apply the upsell your beer business. “Customers who bought Dogfish 60 Minute IPA also bought Ithaca Flower Power.” You get the idea.
Your current customers are your best customers. They know, like and trust you and they are likely to buy more from you if you suggest products that will help grow their business. The upsell is a great way to increase the rate of sale.
Another idea to increase the rate of sale is to utilize e-commerce in your business. Consider an online list of your beer brands with descriptions, ratings and glamorous pictures.
Think about it this way, the beer sales person is responsible for selling hundreds of different SKUs. They can’t possibly pitch all the products to the retailer during a sales call. However, if the retailer has the option to browse your products online they may find more of what they need for their business.
If you have a large portfolio of beer products, the e-commerce option may be a good one to increase the rate of sale. Retailers can search your portfolio at their leisure, and in their own time. They don’t need to be rushed during a 15 minute sales call.
Increase the Frequency of Sales
The frequency of sales is how often your customers buy from you. A typical distributor delivers once a week to smaller accounts and multiple times per week to larger retailers. Here again, there is a routine to the buying activity: the account places the order on a Tuesday and gets the delivery on a Wednesday. Rinse, wash, repeat.
To increase the frequency of sales, look for ways to give your customers additional buying opportunities.
Email marketing is a great way to announce new products, special offers or seasonal sales. Retailers won’t buy if they don’t know the buying opportunity is out there.
Tell customers about overstocks or discounted items. This gives you another opportunity to increase the frequency of customer purchases.
Another idea is to send targeted offers after a birthday or retailer anniversary. “Happy anniversary – we are celebrating ten years of business together.” Everyone loves an anniversary present, especially if it comes with a deal or new product reminder.
Wrap Up + Action Items
Unfortunately, the store shelves aren’t expanding and customers aren’t buying more beer these days. It’s time for you and your team to think outside the box and explore new ways to increase beer sales.
As business experts have shown us, there are three basic ways to increase sales:
- Increase the number of customers: Add a new product line like snacks or non-alcohol brands
- Increase rate of sale (how much retailers spend when they buy): Train your sales team in the upsell. Think about adding an e-commerce solution to your website – your retailers can shop your brands at their leisure, in their own time, and in their PJs.
- Increase the frequency of sales (how often retailers buy): Use email marketing to communicate new products, specials and even wish a retailer a happy anniversary. Retailers won’t buy more frequently unless they know there is a buying opportunity out there. Tell them.
The purpose of this article is to get you thinking about how you can increase sales in your beer business. While there are three main ways to increase sales, there’s no limit to the creativity and good ideas to accomplish the task. Now, get out there and grow that top line revenue.