For the second blog in our series “Best Practices for Distributor Relations” we are going to tackle the “relationship” part of distributor relationships.
As you know all too well, distributors are very busy selling many products simultaneously. Getting a distributor to represent your brand in their marketing area is just the beginning. So, how does a small to medium size winery with little clout capture and retain a distributor’s attention? Relationship.
Distributors need to know that a winery is committed to them and to the market – that you are shoulder-to-shoulder in the race to the finish line. What I have seen with my winery clients is that it is not uncommon for even the smallest, most seemingly insignificant winery to generate a large amount of enthusiasm from distributors and trade accounts by following a few simple, common sense practices to being good partners (that are surprisingly overlooked too often).
Be attuned to your distributors’ information needs. Nothing says “I am committed to our relationship” like understanding your partner’s needs. Like the rest of us, your distributors are overwhelmed with information coming at them. Streamline your communication by providing only the information your distributors want and that is appropriate for their market. This goes for marketing materials, too. Send your distributors what they believe is good for their sales efforts.
Provide information how distributors want it. Before you dazzle your distributors with your very impressive Excel document, ask the distributor managers if they have a form that works best for them. By doing this, you will save the manager’s time and you will most likely get a faster reaction.
Be responsive. Distributors are busier than ever trying to appease trade accounts, wineries, and sales people’s issues and growth plans. When you have their attention, be responsive. Demonstrate your commitment by being timely – reply to inquiries on a same day basis.
Nurture key sales relationships. Good relationships with your distributor managers are important…and so are good relationships with key sales people. Determine which distributor sales managers and representatives are responsible for 80% of your sales and communicate directly with them. By getting to know the key sales people they will better understand your message, see that you are committed, and will more likely be loyal to your brand.
Share best practices. Get in the habit of providing your distributor with new ideas and successful strategies that are working in other markets that have application. Distributors are always looking for innovative ways to sell more of your wine and, frankly, don’t want to get bogged down trying to solve your problem. (This is information your distributors want.)
Keep your distributor partners in the loop. Your distributors are representing you in the market. They need to be up-to-date, knowledgeable, and motivated. Send your distributors important winery information and recent press. Remember to send it in the best format for them (versus what is easiest for you to send). Distributors don’t have time to reformat your documents.
Befriend key trade accounts. Get to know the important trade accounts that are capable of or are selling a good amount of your wine. Then, come up with reasons to touch base with them every 3 months. Make sure you visit them at least 1 time per year – nothing shows I am shoulder-to-shoulder like a good face-to-face.
Be a welcoming host. Jump at the opportunity to entertain your distributor sales representatives and key trade accounts when they are visiting your wine region. This will leapfrog your relationship forward and will build lasting memories that will translate to loyalty and sales over time. (Some of my closest industry relationships solidified at these onsite visits.)
Lastly, show gratitude. Your sincere thanks and appreciation for your distributors’ hard work and efforts are greatly valued. Avoid the “what have you done for me lately approach.” You want the distributor working for you and thinking about your brand.
Palmateer Consulting specializes in helping wineries to develop strong, strategic distributor relationships. We would be happy to work with you.
As you know, hiring the right sales manager for your winery is essential to building your brand in today’s market. Here are three paths to lead you to the best suited candidate.
Retain a recruiting firm. This approach is perfect if you are busy, believe in leaving recruiting to the experts, and cost is not an issue.
Pros: For wineries who can afford to retain a recruiting firm, I wholeheartedly recommend this route. These firms keep current on best practices, maintain a large database, and can help you secure the right candidate in 2-3 months. I have had successful relationships with executives Chet Hutchison, Dawn Bardessono, and Amy Gardner.
Cons: Can be expensive, costing up to 30% of the new hire’s first year compensation.
Do-It-Yourself (DIY) recruiting. The DIY approach (asking colleagues for referrals, promoting internally, posting on a job search website) is good if you have limited money and a strong network.
Pros: You are in control and the monetary cost is low.
Cons: Sample size, perspective, and time. Likely, your network will help identify a dozen or so candidates. It is hard to find the best candidate in this small of a pool. Plus, you must be wary of a conflict of interest, e.g., a distributor’s recommendation may be good for them and not as good for you. If you promote internally, expect 1 to 2 years before anyone without established buyer relationships to earn their trust. And, while the monetary cost of DIY recruiting is low, you will spend more time finding that perfect candidate. We all know, time is money.
Choose a happy medium. Palmateer Consulting offers a hybrid service between hiring a recruiting firm and DIY. This path is great if you want an experienced professional to help you secure the best suited candidate at a fraction of the cost of recruiting firms.
Palmateer Consulting is structured differently than a single-focused recruiting firm. This allows us to help wineries find the right new hire at a much lower cost.
Gordon Palmateer has extensive recruiting experience and walks with clients hand-in-hand through each step of the 2-3 month process. Throughout his 35 year career he has successfully recruited and hired hundreds of wine industry professionals. He has a strong network to tap into and maintains a list of possible candidates within the wine industry.
Having worked for Importers, wineries, and distributors, Palmateer uses his unique perspective and strong network to help his clients evaluate their sales needs and find the right fit candidates.
As a third party, it is easier for Palmateer to maintain objectivity to find the right candidate to fit your company, your needs, and to help build brands in the market.
Please reach out to us at Gordon@palmateerwinegroup.com if you have recruiting needs. We look forward to hearing from you and helping you find your next new hire.
When the economy turned upside 2 years ago, many wineries were forced to lay off employees in an effort to streamline budgets. More often than not, many of these employees were experienced, solid team members who tended to earn a higher salary commensurate with their experience. As wineries are starting to rebound in sales, they are beginning to look at replenishing their staff.
I have been hiring for wineries for 20 years, and without a doubt, there are more qualified candidates for each position than any other time I can remember. The main benefit of this situation is that it is an employer’s market.
Due to the increased number of highly qualified candidates in the job market, it is possible to have a higher set of qualifications for a position and employers can be more selective.
The crash in the economy has unintentionally provided recruiting wineries with things an opportunity to restructure for the new market. Helping my clients do this is one of my favorite . I find it incredibly rewarding to help a winery evaluate their needs and hire accordingly. When not conducting the hiring process myself, I connect clients to agencies such as Human Resource Business Partners, run by Chet Hutchinson, former SVP of Human Resources at Constellation. In this video edition of WGHF, Chet shares his advice on hiring during these changing times.
As the economy and market continue to evolve, here are some tips on to consider when hiring with an eye on retention.
Offer the best salary you can. Wineries that are still feeling financially stretched may feel compelled to low-ball prospective employees in salary. This is a short term strategy. As Chet Hutchinson points out, it is more costly to rehire when your new employee quits after 6 months than to hire someone at the right salary.If you can’t afford to offer your perfect candidate a higher salary now, look at the entire compensation package and see where you can compromise. For example, a candidate might be willing to negotiate on salary in return for a more flexible work schedule.
Treat people with respect. It goes without saying that treating people with trust and integrity is very important. You reap what you sow. Avoid attitudes like, “you’re lucky to have this job with so many people unemployed.” Once again, this is a quick way for an employee to feel unhappy and to keep their ears open for the next opportunity.
Referrals are still key. Even with a large candidate pool, referrals are often the best way to fill a position. When I recently sorted through 300 applicants to a job I posted on winejobs.com, I still placed a high value on referrals from my deep industry connections.
Reference checks are more important than ever. I have a dear friend who is the VP of HR at a large company. He has given me sage advice about diligently checking references and conducting background checks (if applicable) in this market. According to him, desperation has resulted in an increase in fraudulent applicant information.
Keep an eye on retaining your current employees. Even with budget limitations, there are still things that small wineries can do to retain and motivate employees. Show an interest in your employees’ well-being and career aspirations. Learn about their career goals and identify ways they can reach them while simultaneously supporting the company’s growth. Employees feel more invested in a company when they feel they are valued and part of a team.
In the past year, I have worked with wineries that achieved above average sales in the distribution market, but are now experiencing flat sales because they can neither keep up with the additional production expense nor increased needs of their channel partners. Sound familiar?
Typical winery profile
Brands that are selling between 15,000 and 55,000 cases.
One sales manager covers the entire US.
Sales success due to tapping into a distribution and trade market that embraced its brands.
Product’s consistent quality, creative packaging and appropriate pricing appeals to multiple buyers.
Once vibrant sales are now flat as more product and marketplace support is needed.
Limited financial resources.
Dilemma is whether to change its production curve or invest more money on sales managers.
Are you in this situation?
You feel good about the sales growth you’ve achieved; however, you’re concerned about the increased investment required (production and labor) to maintain a similar growth curve and achieve far greater results.
However, just because you produce more wine, doesn’t mean it will sell. Due to a crowded and competitive distribution market, if you do not have the appropriate sales representation, then you won’t get the attention needed to reach your new sales goals. You will fall victim to competing brands that have the resources to devote to developing the market.
Demands of success
The only sales manager you have got you off to a great start as you entered new markets and sales grew fast. However, you are left with the challenge of supporting current markets plus the ones that come on line. As the brand starts to sell more, it becomes a bit more important to the customers, so they demand more of the sales manager’s time and attention. The sales manager’s time in markets becomes more valuable as it is essential to take advantage of sales opportunities.
Sales manager overload
No matter how good your sales manager is, there is only so much he or she can do in a day and eventually unrealistic demands lead to burn out and reduced productivity. A sign that a sales manager is getting burned out is when he or she starts asking for additional money to spend with a distributor so they can obtain a lower price instead of working the market. Distributors don’t have extra time to focus on selling your brand, so their quick and easy solution to moving cases is to recommend that you lower your price.
At this point, it is clear that having one sales manager to cover the US no longer cuts it. In my consulting work, I have hired many sales managers at all price ranges. While everyone loves a bargain, and there are sales professionals who will work at any price, the old adage, “you get what you pay for,” certainly holds true. At the lower end of the salary range are sales professionals who lack the network and ability that is necessary to get sales past the first milestone, and at the higher end of the rage are super competent sales managers who have great contacts and know-how. Yet, don’t despair if you have limited resources. The best way to maximize your dollars may be to retain a sales and marking company that has the caliber of sales managers you desire, but at a fraction of the cost.
Gordon Palmateer is an expert sales and distribution strategy for domestic and imported wines brands in the US and president of Palmateer Wine Group. Email him at email@example.com for more information on this topic.