BRAND SECRETS AND STRATEGIES

PODCAST #207

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #207

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: Thank you so much for being here. So today we're gonna talk about effective trade promotion strategies and how that begins with a solid business plan. And so, Michael, the nice guy on the, on the screen that you see, he's an expert in putting together business plans for brands and helping brands get from point a to point B in other words, scale and grow and all things you need to do. So he is the de facto expert in this, but first I want to thank all the people, the companies that are helping with this, erm, range me, whole foods, magazine, social nature, C-suite network C-suite radio Bricktown group promo mash, supermarket guru, big orange production, some sales success, food business, success based camp produce moms plant-based solutions, four points, a green circle capitals enforced brands. So do me a favor and support them and thank them for being a part of this.

Dan: So the reason we're here today is when expo is counseled. I decided to lean in and start putting out content to help address your specific question. So the questions that you're seeing in this webinar series are the questions that people send me that I'm trying to address on your behalf. So do me a favor and if you've got some additional questions, let me know, let me know what keeps you up at night. And then also please share these resources, these valuable resources with your community. And so next week, we're going to talk about the four points of building and scaling a brand in the era COVID which of course is very relevant. What's cool about this particular webinar is at four points has their own co-packing facility, so they can talk about everything soup to nuts, beginning all the way through the process of, of coming up with a brand and idea and then delivering it to retail.

Dan: And then the week after that, we're going to talk about how to protect your cashflow from frozen deductions, which is a huge topic. You know, whether you call them deductions, chargebacks, go backs, whatever is, is the single biggest pain point that every brand has. And on that note, when we talk about sales, success begins with a solid business plan. This is a course that Michael and I did together. It's on my school. You can get there by going to the school, check it out. It's a free course. And the reason this matters is that your business plan needs to be very solid. It needs to be well put together. My point is that your business plan should be so complete. Then anyone could come in and run your brand on your behalf in your absence. And it would include everything they need to do in terms of the execution, what stores out of everything, today's presentation.

Dan: We're going to take it to the next level and focus more on promotions than our generic business plan. And then on an end note, uh, because I'm trying to help brands scale. During this time I've made the proven strategies to trade marketing, uh, to maximize trim marketing ROI free. If you use the code trade essentials, so you can go to my website and you can find it there. And then Michael, I've got that other, uh, videos, uh, queued up so we can get to that in a bit, but I'm going to stop for now. So Michael, can you start by telling us a little bit about yourself and how you help brands?

Michael: Well, first off, thank you, Dan, for inviting me. And second of all, what we're seeing today is that for myself, I started with Anheuser Busch many years ago and I worked my way up in DST, both on the pedal, you loaded your truck, you pedaled to get everything off of it. And you strategically thought of exactly who you were going to sell to which packages, what type of displays shelf sets and all that. Then I moved into what they call pre-sell and it pre-sell what I did. There was pretty interesting. It, I was the first one and I became the national trainer of how you set your day up for sales, going into both supermarkets, convenience stores. And of course the open market you're, you know, corner delis and all that. Then I moved on to Nestle's waters where I built both the retail side and the home and office side simultaneously because we wanted the key, the price-value equation pretty much together.

Michael: Okay. Then after that, I went to work for Bain Capital, where I, uh, began really my journey here with Belmont food. I'm sorry, Bellmore Belmont, Belmont at food and beverage. It's been a long morning and right. And in that we were able to really, to really understand the financial sides, which Bain capital. I was very fortunate along with Aries to learn. And then after that, we took some brands literally from a startup and we got them up to $10 million. I was also part of as our dear friend, Eric, [inaudible] helping out with Ray Ellis and Eric led that charge to sell that company for $412 million. And then after that, uh, I went on to work with other brands now that are getting either stage for sale or they're or they're working, uh, toward the goal of keeping the brand. So here at the bell at the food-beverage group, what we tried to do is first let's find out who you are, what you want to do. And do you have an exit strategy or do you want to keep the company? Those are probably the two simplest ways. And there are other ways of doing that as you know, how the business expands and, uh, and how it may grow, you know, either quickly or steadily. It depends again, and it comes back to your business plan.

Dan: Thank you for sharing that. And in fact, on that note, one of the things that I was overlooking in my background, but Brad Barnhart made a point of saying, Hey, you need to focus on that more. I should focus on that. More is DSD. The basics of selling are so critically important to the success of every brand. And if you can do this and do this right, then that's going to help you grow and scale. And so the point being is like Michael, understanding the relationship between the brand, the retailer or the consumer is where the conversation needs to start. And so again, Michael is the expert and understanding how to leverage that with brands and help support them and help them drive sales. And that all begins with a solid business plan. So, Michael, would you like to start out with your first point, which is strategy?

Michael: Yes. First off, let's talk about strategy in general, you have to have like the essential elements of a business plan. So the first thing I always tell people is, okay, what is your, what is your product? We don't have a brand yet because you have to develop that within your business plan and marketing plan, you know, tied together. So what is your product? And then after, when I talked to a, you know, an entrepreneur, a founder, whatever, the first thing I ask is what have you done on the side of competitive analysis? Do you understand the category? And maybe you might be in a subcategory that you would own. And Dan and I worked on a certain project for a company that we're number one in the subcategory, but they were in a massive category until Dan broke it out and showed, you know, the, uh, the numbers correctly.

Michael: It showed that that particular owner owns the subcategory they didn't even know about. Right? So when you give me a business plan, the first thing I always tell people is the executive summary, keep it to one page. Don't go more than a page. It really has to be precise of what you're trying to do, who you're are, what you're being involved, which, which markets you're trying to sell to. That's it. I think I've seen too many executive summaries, two, three, four pages. And it's that there's nothing concise and really designated to what you're trying to do with this product that you're developing to a brand, right? And this second let's go to the marketplace and competitive analysis. One of the books I strongly recommend to the group here, it's called the modern competitive analysis by Sharon Ostler. This book is very good. Um, I really believe in the book.

Michael: I've had it for years and there've been some updates with it. And Michael Porter has also his book, but this one I like, because it really dives deep into what you're supposed to be on the competitive set. And are you in a category that you're not going to be a disruptor is nothing unique? There's nothing different. That's when you have to say to yourself, do I really have the, where at all, mentally to do this, to get into that side of your business, do you have to be very careful? I think most of the time people run into a category and they say, well, it's 23 billion. Well, there are about six or seven characters that have been there for 10 plus years. And we both know, uh, as you like to say, Dan, you're going to be an endless ATM machine asking for more money, more money.

Michael: And really in this day and age, a lot of investors. And I had a great conversation with one of them today with a brand. And he said, Mike, our timelines have real strength. It's about 36 to 40 months. We have to see a break-even, and whatever that breakeven is, and that also has to be in your business plan. And he also said to me, which was interesting. He goes, Mike, I show what you wrote here about the competitive strategies and what some of them are doing to quote get bad volume. And that's something that I never heard before. And we talked about that at length. Okay. So your next one is really your sales and marketing objectives. What are you trying to do? Selling this product and marketing it again? This thing, this part here part three should be no more than two pages sales and in the marketing, and really have it nice and detailed of exactly what you're trying to do on your sales and your marketing side of that.

Michael: The next thing is your sales and marketing plan itself, who is your target consumer? And I like what Dan always said, if you don't know who your consumer is, then you don't know who's going to buy it. And the other thing that Dan probably has a lot that I hear is everybody's my consumer. Well, that's like saying you're selling and everybody's your customer. No, that's where again, you have to know your target, a customer. You can do it by a consumer journey tray. You can do it by a consumer. What I call the branch tree of what they are, who they are, and why they may come to your product and why they should buy it. Right? So those things as a consumer journey map, I like the call. It should be in there. So you're trying to explain to an investor or to your employees that you're hiring exactly what you're trying to do.

Michael: Right? And we see a lot of confusion with that because it starts at the top. And one of the things that I always tell people is if you have a consistent message and you have a consistent process, you should have consistent execution points for what I call, you know, consistent sales. That's. One of the things I'm seeing in a lot of the business plans is not being done is that the owner founder says one thing, but they're not following what they wrote in the business plan. And it's like, you're sort of off the reservation as I like to call. Let's get you back on it to say, why, you know, why did you change this? And if you did, did the employees bring that in, make the adjustment in the business plan? So we all stay consistent with it. And that's another thing I say, uh, the next one, and this is where the marketing and sales strategy really comes.

Michael: I think full fall, I call it the four-legged stool, your eCommerce site. What are you trying to do to get the consumer, to look at your brand? You've got about 10.4 seconds from what I've been reading, which I do agree with to tell them why, why you should buy our brand. And in that e-commerce, you have to really explain quickly. What's so great about the brand and not to have total writing of everything ingredients and all because the consumer can do that. If they like it to page two, and I can say this now, one of the statistics I saw what IRI is that 64% of the people will leave that page after 15 seconds because of too much information, they just, they don't know what the brand of the product really means to them. And they won't even get to the second page.

Michael: So that's where you have to really build your eCommerce platform extremely succinct. And to the point next on the eCommerce, I call it as it goes across the chair is the eCommerce with your retail, right? Uh, partners across sugar, a Safeway Albertson's so on and so forth that you're working with them, that you can tell them why your brand fits there. You're a destination brand. No one else has this type of brand and you can help them bring in their new consumer and increase their basket sales to their existing customers as well. Right? Then the next one, you have to have your brick and mortar. And that's where some of the things that I come into is okay, which supermarket chains should we be in? Well, if you've produced in New York, I would suggest that you could go to ShopRite Wakefern yet to them, our whole, okay.

Michael: And you're staying on what I call the 95 corridor. And then up, you can go to maybe a market basket, new England. So now you're pretty much within four hours. I am Eric skate likes to say of distance to go see the stores, the check out what's being done to make sure the pricing is correct, to make sure that shelf positioning that you've discussed with the buyer has been done. And your broker is executed. That, which we'll talk about a little bit in the next. And the last thing is to talk about the brand itself in that your brand is here, it's working with your brick and mortar there. It's working with your e-commerce here and your e-commerce over here with the retail. Now, the other thing that e-commerce, I want to understand is you've got to have that just for Amazon itself. Amazon has two levels.

Michael: They have one which is a seller central, and the other one is vendor central. I think you should be on both platforms. You do blend a little bit of the margin down, but it does give you better exposure to be there and to be able to sell to that consumer as well. And one of the things that we have seen in retail just recently is part of that. People are now using Amazon more as a search for food and beverage companies and products in general. Okay. And then the last thing is your marketing and sales budget overview. And that's really where the meat and potatoes start. And one of the things that Dan has built, and I'm a big proponent and fan of it is his trade marketing courses that I think everyone should really pay for. It's going to, I use the old thing with Fram.

Michael: You can pay me now or pay me later. Well, if you pay for Dan now, you won't be paying for the heavy expenses later. And Stan is correct between 70 to 75% of the trade spend dollars are wasted because you're not reviewing what you spent. You're not understanding what you're spent. And the third biggest problem is you've already spent it and it's in the mail spend. So to stop all those three at once, one of the things that Dan has is this wonderful tool that you could look at promotion and find out exactly what's being spent.

Dan: Thanks for saying that. Okay. Checks in the mail. I appreciate that. And that is so important. So, and we'll talk, we'll get back to that in a minute, but let's, let's back up a little bit, a lot of great information. Thank you for sharing all those insights. So let's boil this down to the fact that your business plan is your roadmap. It's your blueprint, whatever you want to call it. Your business plan is what keeps you focused in on the guardrails. Too many brands as Michael was talking about are so busy looking at the next shiny object. You know, where like a scroll, where's the, where's the Nutter. Where's the, I mean, so the joke where, you know, the dog's, there's a scroll, there's a scroll and, and always being thrown off course. And the point is that you need something to keep you on course.

Dan: And if you can do that and build that into your business plan, you're going to be so much more effective than other brands. The other thing Michael talked about, which thank you again, this is exactly why I built my free turnkey sales story strategies. Course, if I tell you a story and you tell someone else and they tell someone else, and so on, by the time this story comes back around to me, it's unrecognizable. Like Michael said, if your message, if your strategy, if everything that you're doing in your brand is not communicated effectively, the same passion and his enthusiasm across your entire sales funnel, you will fail. This is the biggest Achilles heel for every brand. And so, as you're just talking about a minute ago, if my strategy is to grow 5% or 10% or something like that every year, and I'm in New York and all of a sudden someone in California says, I want your product on my shelf.

Dan: How are you going to support that? Is that within your business plan? That in my opinion, I think Michael would agree with me is something you think about down the road. And so it's critically important that you've got all that set up within your business plan so that you can just focus on, as Michael said again, execution, this is why this matters. Most brands don't execute well. Most brands don't do a good job or effective job, uh, holding their broker partners accountable to the execution. Most brands don't execute well when they get to product and shell think about it this way, your brand has your name on it. And if there's an out of stock or if your product's damaged or something like that, if they can't find it, if it's miss merchandise, it's in a bad place in the store. That's not the retailer's fault.

Dan: That's your fault from the consumer's perspective. So how do you fix that? How do you communicate to the retailer that you've made a commitment to address that, to stay on top of that, et cetera? And then of course, as you're doing this, when you're talking about potential investors, the value of your company, as Michael keeps losing, alluding to that's where this comes into play because investors want to know that they can get a return on their investment. They want to be able to trust that you're going to manage their money effectively. And so if you've got a solid business plan and you put all that into, that's going to help them feel more comfortable, and that's going to put you in a position if you do it right where you can negotiate better terms, I know I've thrown a lot at you, Michael, what else do you want to add around that? Or what things have I not talked about or are included in that?

Michael: No, you brought up a good thing with the brokers. One of the things that I use in Dan, you've heard me say this numerous times is that I use the analogy is it's like an infant. Well, you don't go to somebody's door, knock on the door and say, look, I'll be back in 18 years. Make sure it grows up. Right? And I'll come back to get her for college or him for college. You've got to stay on top of that broker working with them. And by the way, have a script of exactly talking to the broker, what your points are about your brand, keep them focused like you will focused. So you know what, to your point, Dan, that story stays consistent here to consistent there. The problem is people don't go in working with their brokers to hand stuff over, well, my broker, isn't doing well hate to say this that's your fault because you're the head coach.

Michael: And always say, you can't yell at the player unless you taught them, right? So you have to teach that broker. This is what my brand is. This is the category we're in or the subcategory. This is the competitive set. This is where we need to be. Right. And then taking your sales deck that you build for them, do not have the broker build it, let you build it because that message stays consistent. So when you give it to him, it's rolling off your tongue and your passion is right behind it. Right? And you're also working with that broker that they totally understand you. And the other thing too is don't be afraid not to ask to go on the sales calls. Historically, what I've seen from major retailers is when they hear the founder and they hear the story of how the brain was developed and why did you develop it?

Michael: And that passion comes across. That really helps out during that initial sales call. Okay. And that's one of the other things too. Uh, when we talk about the trade spend, you and I talked about it, we're seeing a lot of changing parts folks happening as we speak. And this is why this tool and some of the things that Dan teaches is going to be more relevant now than ever before because this virus has changed the way retailers are going to look at sales, promotions, and execution. I will not tell you, the retail has said this to me by name, but they said, Mike, we kept a little scorecard. And there are some brands that will not come back on a shelf because they didn't identify why we were out of stock, but our competition got their product. We don't understand why we weren't notified that they were going to be out of stock. And they just kept saying it was just about the virus. So those are the other things too, that retailers are doing. Yes, they do have a little scorecard and yes, they're looking at who worked with them and who didn't. So,

Dan: So critically important. Thank you for sharing that. Actually, it reminds me, well, first of all, the first thing you said, uh, I just published episode podcast, episode 205 with Charles organic and Maddie was talking about how he goes out and makes a point of working with a retard. They've got a short video actually is about 29 minutes, but it talks about the, be the brand. And it gives a really good flavor for the brand and an understanding of the brand. To your point, you've got to make sure your broker is talking about your brand and the same with the same passion. And if you think about a broker, there's some good, there's some bad, good mechanics, bad mechanics, all that other stuff, right. You know, you've got to get them on board and their success is your success and vice versa. And so if you can help them understand what's unique about your consumer.

Dan: So in this example, they're talking about regenerative organic and why that matters and why that's critically important and how they're helping out the farmers. And it's a great episode. So check it out. But the is, if you can leverage that within your broker and develop that relationship and have that ongoing working relationship with them, challenging them to actually use your product, what a concept, right? So that's going to help out a lot. But then in terms of what Michael said, as far as the execution piece cannot overstate this, this is the Achilles heel of every brand. Big brands have a lot of trouble with us as well. And there's a lot more too, just having enough product on the shelf. You've got to have the right placement. You got to know how many people buy it. That we'll talk about that later. But as Michael said, retailers want to feel special. And if you are in a retail store, think of it.

Speaker 3: It was a gift. And if

Dan: You're doing something different in their competition and they find out about it, they're going to say, Hey, where's the love? Why aren't you doing this for me? Or how come I'm not getting what I need? Or, or why are you promoting deeper down the street at a deeper discount on the street? All of these things impact your ability to grow and scale. Remember this relationship is about trust. This, this industry is about trust. It's not only the, in the consumer that needs to trust your products. It's the retailer that they, you know, they want to be able to trust that you're going to help support them. Member, keep talking about this. The three things retailers want reasonable profit in the category. They want a competitive advantage in their market and then more foot traffic in their store.

Speaker 3: And if you can do the any S

Dan: If you can support them and help them meet their needs, a savvy retailer will bend over backward to help you. So, as Michael talked about the trademark things, actually, let's talk about before you do that, let's talk about Michael said, you know, the Amazon strategy, I believe also you should consider Shopify also have a way to sell your products online within your site. I've got some creative strategies that we've talked about. Other podcast episodes, et cetera, where you can leverage that. As Michael said, to drive sales and traditional retail. So I just wanted to make that, that point, your online presence is critically important because if all the retailers disappeared tomorrow, who would buy your products. Now I've been saying that for years, not knowing that we'd have a pandemic, but the point is, as Michael was alluding to now, small brands are getting squeezed out and they're getting squeezed out because retailers are looking toward that drug that they call trade-marketing.

Dan: They're looking for the big brands that can pay the slotting and all the big fees they charge. And they're looking at velocity as being a metric. That's more important today than it was before. We've had a lot of discussions about this on the podcast, the webinars, et cetera, small brands can not compete for our velocity, total movement, small brands instead compete on our contribution. And more importantly, what is your product drive into the store in terms of the market basket, growth and profit, and stuff like that. That's where you need to be. That's where the trademarking piece comes into play. And that's where all these other strategies we're talking about. So Michael, before we get into the trademarking piece, any thoughts?

Michael: Well, one thing is, and I wanted to put this book up. It's the strategy of tactics of pricing. It's by, uh, Thomas Nagel. And this is another, uh, I like to call it as you look behind me, I have four bookcases the business. And over the years I have my own personal library and I try to update it once a year, give away the older additions, get new additions, whatever it may be, because that's how this is the changing that you and I talk about. And I'm glad you brought up Spotify. I didn't want to bring that up. That's how we have to get our clients, not just with Amazon, of course. Right. But that's, that's really, you're correct. And one of the things I will tell somebody, and this, that just came out, I got it right here. The 60 plus group 47% are going to continue to stay online.

Michael: And some of the reasons we're still not sure back going to a store, ease of storage, and all that. And here's another thing, the average consumer, and you probably heard this last night on one of the things we talked about, the average consumer is only going 5.5 miles to their store. So it's critically important that with your brand, that you have that. And as you know, I always call it a destination brand. I'm not in the big box stores. I came to you Mr. Retailer because this is just a consumer you're looking for, that we have. And again, I go back to the aura, consumer journey, map, consumer tree, and then all of a sudden, wow, he did his homework because I'm going to say this to everybody. And I mean this, so please don't go in and say, you're going to my stuff tastes great.

Michael: And you make a lot of money. They hear that all day long. I do say a running joke. Jeez, my stuff tastes terrible. He can't make any money. You might have the buy. What? Because they hear the other ones so much, right? So you've got to go in and show why your brand deserves to be there and who you bring to the basket. And one of the things in Dan's courses that are very, uh, it was important to me to hear it again. Why should you have me? And that's one of the things that they had talked about in, in, in trade spent. So I think that's a big thing that you and I always talk about is trade spend because of Dan's right. Most of the time the investors asked, well, how much are we spending on this? You can't give, well, I think, no, here's the exact number.

Michael: If you have Dan's tool, you've taken courses, you're pretty much going to be 99% thereof exactly what you spent. So that investor, your quote, the financial partner feels a lot more comfortable with you than guessing. I'll leave you with this. Because again, I talked to the one bank of this morning is Mike. The guy said he had X amount of stores. Okay. So I looked at the distribution and Dan will tell you in the scorecard, it's sort of have a good projection of what you want. Kylie has 2000 stores, but he talked like he had 30,000 stores. And I looked at the distribution report. There were only 2000 stores. So now this investor who is a dear friend of mine, uh, said to me, Mike, what do I do? I'll talk to the owner and I'll work it out with him to readjust them. Because this gentleman who invested is a good person and a dear friend of mine, and he wants brands to succeed. He just wants, you know, where are we? Where are we right now? That's all. So, that's part of it as well. And I think let's get into the trade spend because I think that's very important. Very, I think it's imperative today now.

Dan: Well, and thank you. And the reason we're setting all this up is, and thank you for sharing that, and thank you for all the compliments. Yeah. I'm trying to really make a difference in the industry. So let me frame it this way. There are tools out there, software solutions that will quote-unquote, manage your trade spending. Think about QuickBooks for trade spending. In other words, you put the amount in that you spent, and it says that you just keep track of it. Think of your checkbook. Okay. It doesn't tell you how effective the tr the spend was. That's the thing that's missing in all these tools. And some of them have ways to get around that, and they give you a little bit of an insight into what's going on, but because of the way the data comes out and they don't want to get overly technical right now, and talk about this in the course, et cetera, you need to understand what are the things that impact trade spending.

Dan: You need to understand what are the things that you need to be looking at. And I just give you a quick example. If you wanted to know how well your product is doing in Denver, Colorado in the natural channel, there is no database on the planet that will answer that question. So if you're promoting here at sprouts or natural grocers, et cetera, there's no way to differentiate how your promotion of impacts the category impacts. The retailer impacts the competitor. If you're looking at any of the databases that are out there, and that's true in other areas as well. So what that said, retail execution, solid business plan. Know your customers understand your market basket, who buys your product when they buy your product, what are the things they buy? The more granular that you can get. And this is key, the more effective your trade management's going to be.

Dan: So, as Michael said, over 70% of trade dollars are wasted or ineffective. What that means is they do nothing to drive incremental sales. It's even more impactful and natural. And so when you're talking about what does it cost to put your product on the shelf and get in the hands of the consumer? This is where that comes into play. So the tool that Michael's talking about that I built is the trade promotion, ROI calculator. And it gets down into the nuts and the bolts of how does your trade marketing impact sales? How does it impact the growth for the retailer at the category, et cetera? So I've got a short video. Michael, do you want me to show it? Yes. Okay. Are you tired of everyone having their handout face? It retail's paid a play wisher is a better way to grow and scale your brand.

Dan: Well, now there is, it all begins with effective promotion management, and that begins with calculating the ROI from your promotions. If only there were a free tool to do this while you're in luck, because now there is, before we go any further, we want to set reasonable promotional goals. And we want to set targets that we can reach before you know where you're going. You've got to go back and take a look at where you've already been. In other words, if you want to set effective goals, well, what are those goals look like? What kind of target are you trying to reach? Let me show you why this matters. Go to my website and click on their free promotion analysis tool button. On this page, you're going to get a wealth of resources that are going to help you identify exactly not only where you've been, but it'll help you to help guide you to where you want to be.

Dan: So, as you scroll down, the first thing that you find on this page is this tool, the promotion efficiency calculator. I designed this because I wanted you to think about how much money are you really spending our trade spending? As I said, it's a little bit of a black hole and a lot of companies struggle to answer this. So generically speaking, if my annual gross sales are $800,000 a year, and I spent 25% of that in terms of trade spending that I'm spending about $200,000 a year to get my product in the hands of a shopper. Now, if I can save you 10% on that, by with the strategies that we're talking about now, then I can save you $20,000 annually. So the question at the end of the day, what would you do with that money? So let's change some of these numbers and show you how dramatic this can be and why this matters.

Dan: So let's say just to make it easy, let's say I am a $1.2 million brand, okay. At 25%, I'm spending $300,000 a year in my trade spending. Now let's say that I'm able to go from five promotions down to three promotions. I realized there's a lot more on that, but just stick with me. So let's say that I have an opportunity to reduce a couple of promotions to eliminate them. And let's say that I'm going to save about $5,000 per promotion. Well, if I can save $15,000, there you go. Then I am reducing my trade spending by 5%. Now that's one retailer. Perhaps what if I did that in six retailers or seven retailers, imagine how much money you could save. So using that same example, let's say that I'm able to save $30,000. Well, that's 10%. Like we saw a minute ago. What if I'm able to save 20%, that's $60,000.

Dan: You could put back into your brand to help grow and scale. I just eliminated 12 different promotions or different way to think about it. As I eliminated one ineffective promotion at 12 different retailers. And remember, this is how you make your brand more attractive to potential investors. Now, let's say that after you start beginning really efficient at this, you're able to reduce your overall trade spending. Let's take it down to 20%. Okay. But wait a minute. Remember we said that we saved $60,000 on promotions. So we'll go back to the $60,000. You just reduced your overall trade spending from 25% to 20%, from $300,000 to $240,000. And in the process, you're able to increase your efficiency from 20% to 25% for the $60,000. Now, as a percentage of your total, total sales, we're still saving a ton of money, $60,000 in this example. But the reality is if you're saving 20% on your overall trade spending, you're most likely spending, saving a lot more in terms of your efficiency, maybe 30%.

Dan: And that's because you're more efficient because you're using your knowledge to be able to choose which promotions are more effective. You're choosing the promotions. They're going to do more to elevate your brand. My point is this, play around with this and see how these numbers impact your sales. Use your best guests to define how much you think you're spending in trade spending. And then use this as a benchmark, as a goal set reasonable goals. Again, how much did you spend on a particular trade promotion back that out? Well, what percentages that, okay. Now, if you back out two of them, what if, for example, aren't a trade promotion. You spend $5,000, but now with your new skills, you're able to get more out of that. You're still spending the same amount of money, but now you're able to grow even more sales, and I'll play with this.

Dan: It's free. It's my free gift to you. This is how I give back, leverage this tool to help you set appropriate goals, to maximize each and every dollar of your trade spending. Okay? So now let's scroll down, look at the promotion analysis tool light. So here, you're going to see a lot of the things that you're going to see in a typical promotion sheet. So do your very best to complete this. Put in the name of the event, the event date, how many weeks long, the events going to last, the fixed cost, anything and everything you possibly can. Now, if you don't have access to the data to actual sales data, then you can go into a store for example, and ask a store, how many cases of product they sell on an average week, a regular week without the promotion. And then how many cases do they sell?

Dan: Aren't a week where the product is promoted. Now I acknowledge that that's not a perfect solution, but it gave you a good feel. It'll help you understand the dynamics of how all this works. So you've got your base units. Your base units are your sales in the absence of a promotion. Your incremental units are the extra units that you sell during those weeks that you promote input. All of that in terms of the dollars, simply multiply how many units, times the average retail price, when it's promoted, or how many units, times or retail price, the average everyday price. That's how you get to some of this information. This is something I'm going to go much deeper in, in my trade marketing Central's course. But just to give you an idea of how this works to start to get you to think about what are the things that impact your promotions, where can you save money?

Dan: Where can you get a bigger bang for your buck? That's what this is all about. Well, after you put in all your calculations and you scroll down a little bit further, you're going to start seeing what those numbers may add up to. In other words, what is the price discount? How many base cases, again, base cases, cases in the absence of a sale. And I know he didn't show you this before, but if you hover over the question, Mark, you're going to see exactly what every single item is. What's involved in it. And what's important about it. So as you're beginning to play with this pay close attention to how everything can impact your promotion. For example, if you go up here again and let's say for in-store demo costs, we're going to say that costs a thousand dollars, or let's say that we're going to pay more to scan the price down.

Dan: So instead we're going to spend 10 cents. So then go down and take a look at how that impacts your overall performance. This is what you need to be paying attention to. This is your opportunity to become an expert in your trade promotions. Now, the best part about, this is the part I'm most excited about after you do this and you play around with it for a bit, and you're really getting it to be comfortable with it. Well, then you can actually email this to yourself, putting your email address and your name and hit the scenario. Now I'll tell you it doesn't show up in your mailbox immediately, but it does come. And once you get this, hang onto it, then you've got your, your Seminario that you're planning. In other words, what are you forecasting in terms of this promotion, you want to be able to help the retailer understand what their expectations are, how many additional cases they need to have, et cetera.

Dan: Now, after the promotions complete, then go back in and put in the actual numbers at this point. Now you've got another scenario. You print that off and you can compare the two and then you can start identifying what are the unique opportunities to drive more sales, this tool. So very, very powerful. And yet this is something that every brand doesn't have access to leverages use this as you're beginning to grow and scale your brand, use this tool so that you can take it into the retailer and say, look, this is what I'm going to do to help drive sales in your store. This is how much incremental profit or how much money incremental dollars I need. By the way, another thing you can do as you start getting a hold of data is once you start providing more insights, better insights to the retailer, savvy retailers might even reward you by giving you access to your actual sales data.

Dan: In other words, they'll tell you how many units you saw on an average week. And then they'll tell you how many incremental units you sold during the week of the sale. That makes us a lot more accurate. So any other, a lot of different ways to use this, but uses do me a favor and help me raise the bar in the industry, share this with any of the brands that you have a relationship with. If you're in a situation where you're able to co-promote with another brand, and then you've got your scenario, and then they've got their scenario and you put the two together and you take that into the retail. That's powerful. These are the things that retailers really want retailers to want to answer. So anyhow, thank you for indulging me. So I'm really excited about that tool. And as Michael was saying, this is a game-changer.

Dan: So when we're talking about how to help the retailer, retailers want insights, actionable insights, they don't want to canned report the same canned report that every other brand shares with them. When you understand your business plan, and you understand the important factors that go into your business plan, the consumer, the market basket, what's your consumer looks like specifically all that other stuff. And you get down to that granular level. And then you input that into that tool. Now we're able to really help the retailer. And more importantly, we're able to help you grow and scale your brand. Get more bandwidth for growth, more for innovation, et cetera, or helping you avoid some, the wasteful spending that other brands are plagued with Michael, your thoughts.

Michael: Yes. Uh, one of the things about this tool reminds me of a great line by the greatest philosopher of our time. Yogi Berra, if you don't know where you're going, you're going to wind up somewhere else. And that's, that's the whole thing with your tool. And one of the other things I want to add onto that, that Dan brought up when you're in the stores and you meet some district managers of these chains may be a ShopRite of whoever and you give them your business card, you offer them free samples and all, you'll be very surprised with followup calls and I've done this because Dan, you and I grew up in DSD. Hey Dan. Yeah, I remember Mike. I remember you. They're more willing to give you information. What do you need? Well, what zone stores the app? Well, I can only get these 45 or 50, and we'll tell you if I can get 50 out of 400, I have a pretty good idea of what I'm doing in the entire chain.

Michael: The last thing with this tool, one of the things that are going on today, folks, you can read all you want, but the retailers have been doing their own shelf set analysis. While this virus has gone on with this type of tool, you could go into a retailer saying, take a look at what we did promotional wise, and they'll look at their information by the way we didn't do well here. Here are some of the areas we missed. Here's a, here's our idea for another promotion in another timeline to help you build the customer. If you have an answer to a problem that they know about, but you've already come pretty much prepared with this type of tool, that type of information, to get them to where they need to be. They're going to be more than willing to listen to you. One of the things that, uh, Dan, and I always talk about is you can't go in with the same promotional schedule every year, drop it on the table and say, here you go, what are we doing?

Michael: Where can we cross merchandise? How do we cross merchandise? And Dan always talks about the other thing, like market basket, what's in the basket, besides my items. What other departments can we put up-secondary displays? Okay. And I always hear this to Mike. You know, that's a lot of work. Well, if it was easy, everybody would do it. And they don't. That's the biggest thing. So that's the other part where you can work with a, you know, the category manager of that particular item you have. And I've been able to cross merchandise with other items as well, going into production, coming out of production and going into other areas of the store where it would be another quote, incremental sale. Look, the one thing I'm going to say, and then we'll get into the rest of the business plan. Folks e-commerce is going to grow. It's going to finish at 21 billion. It was only predicted to do nine to 11. So now we know it's doubled because of this pandemic. So people are getting used to ease of this. So the retail is going to look at their real estate. As Dan likes to say, all they're doing is renting your real estate. Well, here's the investment that we can do to help you make sure your real estate gives you back what you deserve. That's the other part of that.

Dan: Thank you for sharing that. And on that note, one of the things that I believe is true about category management, the way this is supposed to work, which is not really the way a lot of brands practice it, unfortunately, is you are as a category management expert. I was an independent consultant working on behalf of the retailer, even though I was getting paid by Kimberly Clark, Unilever, et cetera. The point being is that our job is to help them succeed. And by helping them succeed, the retailers, they gave me incremental opportunities that they didn't give to other brands. Oh, and I didn't have to pay for it. Oh. And also they gave me free data. So there are a lot of other advantages to doing this as Michael said, and this is where, even though it may seem like it is a lot more work in the beginning, these relationships, these add up over time.

Dan: And when you can do something so impactful in one market with one retailer, well word gets out and then other retailers start working with you. It's that know like, and trust factor. So thank you for sharing that this is why this matters. This is why we're having all these conversations in the free webinars series. And this is why I brought Michael in today. Again, the expert in it and talking about this. So Michael, with that in mind, you want to, I know we're kind of getting close on time. If anyone's got a question, throw it up there in the chatbox or Q and a, but uh, anyhow, Michael, let's get back to the, to, uh, the plan.

Michael: Okay. The financials are pretty, it's going to be a balance sheet. It's going to be P P and L profit and loss statement and cash flow. Now here's the other thing about, and we'll talk about this. It's really behind it. And logistics, cashflow folks are managing your inventory to the best possible abilities that you understand working with your broker or a sales team. Now, the bell mullet food-beverage group, we build business plans. Dan knows this, but we make the national account calls. And Dan brings it up all the time. And I'm a proponent of as well. We walk in to help our financial situation. Here are the stores. Here's the amount of inventory that you're going to need for this promotion. And if you do it reasonably well, the retail you've taken the buying time out of them and they can pass it along to their other up people as well.

Michael: And that to me is a big, big hallmark. It really is. And over the years, you know what, you've taken one more thing off their plate. So all they do is they send out in their Excel spreadsheet. You need to take this, this and that they had done, which is great for you. And then also you could talk about your display activities, where it has to be positioned in all. And again, you've got to tell your broker, we're going to be in aisle 14 all the way in the back of the end cap. And that's where our display is. Folks, if you don't get it granular, Dan and I use that word a lot. You're going to miss out. It's the small steps that lead to the big four. I've said it that a thousand times. And both of us coming out at DSD know most of the time, working with the store managers, working with those district managers and regional managers, they become your biggest ally more than anybody in the corporate office.

Michael: Cause they'll say, geez, I saw Dan out there the other day. I saw him working with his broker. He's really trying to keep an eye on his product and my profitability. You know, folks, it's not a hundred percent, but you know what I always say, if I get nine and a 10 on my team, I'm doing better than I was zero for 10. So that's how I look at it. And that's how you should do it. So the financials make sure that you have somebody, hopefully, it's us building your plan to make sure that these things line up accordingly. So again, when you have that plan and Dan always says this too, about business plans, if you're sick for two weeks, God forbid somebody could just look at the business plan and know exactly where you're going. They can take the steering wheel because you gave them the directions to drive the car down the block, logistics.

Michael: How do you get to the market? Are you going to use distributors? Are you going to use DSD or are you going to use hybrids? Which is something different? How do you get there? These are the things you need to think about. These are the touchpoints, the cost points, anything you touch. Remember it has a cost to it. So please remember that at all times. What type of warehousing are you gonna own? It? You gonna rent it? You're gonna share it. Okay. Uh, inventory, please look at it. Weekly, biweekly, monthly, quarterly, yearly. And to Dan's point, then you could say after your promotions, how your inventory has been depleted, what's the build after it. So now you're pretty good on your cash flow, knowing what's coming in and out and you know exactly what's been sent out and what your expenditures are now measuring success.

Michael: Here it is. You have to have a scorecard for your broker working with the retailer. And we do it by the distribution of how many stores if it's 3000, how many stores we targeting 1500, 50%. And every month you make sure that your broker is getting it from the retail at how many stores sold your product. It's gotten. So, uh, detailed. Dan will tell you, they'll actually tell you the stories that are out of stock. Now you go back to your broker saying, look, store content store to two 50. Those 40 stores are out of stock. What happened? Was it merchandised? Was it taken off the shelf? What happened? Be a detective and ask good questions. Uh, the other thing in scorecards, do you have one skew, multiple skews. You put that in your scorecard, single skew folks, we call just single multiple, anything over one package has multiple distributions.

Michael: Dan knows that and that as well, no, your budget or your budget is going to run you. Lot of times people say, Oh, I didn't know about the budget. I didn't see this. Well, then you weren't paying attention to it. That's why when I go back to your financials from my financials and six logistic seven, you have a deployment process of what you're doing, measuring the success, your budget numbers should be just like that. You know exactly what was sent out. You know, exactly the sales to the stores, you know exactly your inventory, that's on the floor. And the last thing, what's your short and longterm goals. What have you done well? And by the way, I suggest very strongly business planning should be done monthly. And I'm also a fan of doing a rolling business plan. I love these guys, all of Mike, I've got a five-year plan.

Michael: Well good. Give me the six numbers for the lottery today. And then we can predict those numbers though. You can't do that. I think you have to have a rolling business plan to be successful as you start to grow. The most I'd like to see is two years, maybe three, but that's a little bit of a stretch. And then you show you longterm. So that's basically that. And the last thing I want to say to people is at the bell mullet food-beverage group, we just don't build your business plan. Dan knows this. We have relationships with DSD partners across the country, in food and beverage, and the national distributors as well. We also work with Safeway. Albertson's HEB, Kroger, Publix, Wakefern, you name it. We know them. And after 42 years is somebody who once said to me, Mike, you seem to know everybody will have the 42 years.

Michael: I hope I bumped into somebody and that's, and that's part of what we do. And, uh, again, I'm a big fan of, uh, Daniel Lohman's courses. I think it really behooves you to take maybe an hour or two a day to take his courses. And I think you're going to learn a lot of the basic fundamentals of how your business should operate to be profitable and then to be successful. And it just doesn't come overnight. Yeah, I do a lot of reading. Uh, I read about 22 to 23 books. I don't, I do not sleep on planes. I'm still a wreck after all these years. So I read a lot on the plane books and all to see what's going on to see why the industry is changing and how I gotta get out in front of it. You know, somebody said, well, this is happening then. Okay. Well, how do I get out in front of it? And this e-commerce that Dan and I have talked about it is growing. So now you have to have a more detailed plan of your eat-in my four-legged stool of exactly how that's going to work.

Dan: Thank you for sharing that. And on that note, Michael is just a set of voracious readers, but he's on top of things. He knows things. And, and one of the points I wanted to make out, thank you for sharing all that, Michael, is that this is where hiring an expert to help fill in those gaps. Make sense. If a brand has people that they've brought into the VP role, the VP sales, we see that a lot of people that don't have a lot of experience, you know, they're going to do a good job in smaller accounts, but when you go in front of a Kroger, 2,900 stores or something like that, you need to play at a much higher level and don't feel bad about realizing, acknowledging that you could use some help in this is where someone like Michael comes into play because he's going to help you knock the ball out of the park.

Dan: He's got the relationships, he knows what they're looking for. He knows how to talk to them. And he's proven himself time and time and time again, one of the reasons people hire a broker is for that relationship by remembering brokers are using sometimes cookie-cutter strategies because they've got to be all things to every brand that they work with. This is targeted based upon what your needs are. So a couple of quick questions, first of all, Deb says beautiful point of a rolling business plan, Michael. I agree completely. I cannot stress that enough. You've got to have a business plan that you review all the time. Doesn't mean that you, you build it. You set it in the, in the, in the shelf. Dev also says, does Michael have data on the drop in average trips to the grocery store per household. I heard that on that webinar that you asked me to listen to last night. So please go ahead.

Michael: Well, the average we're seeing and it's actually gone down, it was averaging here in the Northeast 2.75. It's actually down one trip. Now you'd say, Oh, it's a competitor. No, it's not. It's e-commerce that picked it up. Uh, some of the zone drops I've seen and Dan knows I have a, I'm fortunate to have somebody in the industry that has this data. It was really picked up in the zip codes of an Amazon. So that's where it's going, Deb. And I think one of the things that you have to realize is that has to be part of your plan. But the other thing too is the real. So now they're getting back into healthy and organic products that are helped. The wellness is, is, is now come back strong. Cause people have either put on weight or they don't feel good about themselves. They were depressed about being locked up and all that.

Michael: So with all that being said and done a good natural product is still being really sought out by the retailer. And Dan will tell you if you're going into that retail for the first time, you better be spot on. This is your Broadway show. This is when they write the review. And that review is the category manager. And one other thing, Dan, and I will tell you over the years working DST and all the guy that you meet in the store may wind up being that category manager. And he'll remember you all the time. You came into the store and you, you were so helpful that relationship stays there. So remember who you treat beer today, maybe the guy who's going to treat you or the lady shoot your bad tomorrow. So always try to be very friendly to everybody. I've been fortunate because the Kroger buyer, one of them in the, uh, the dairy side was a store manager. And I used to sell them Budweiser years ago, working out there and we developed a friendship. And now he's, he's the category leader running the entire dairy. And anytime I have a dairy pro, Hey, Mike, come on in a says, just send me samples. And now we're we were doing zoom before zoom was big. He goes, I know how you know my stores. Tell me why, why do I need this? Why is that consumer here? Those are the things to that workout. So

Dan: Thank you for sharing that. And, oh, I forgot to say that the scorecard, thank you for bringing that up too. Michael, I've got a robust module. That's in the trade-marketing central source. So keep that in mind. If you want to go through it, it's going to help you take what we've talked about and distill it down into actionable steps so you can execute flawlessly. But back to what Michael said about re relationships at the end of the day,, this business is highly built on relationships. And while the category managers at know that termite actually is a retail buyer that takes care of the product at the store. You know, they may not have the wealth of experience, but it's how do you help educate them? And this is how you do it by leveraging these strategies is insights. I know we're over the time, Michael, any parting thoughts?

Michael: Uh, the one thing is, is that, uh, Dan is one of these industry leaders. And I want people to really look at his courses. And I'll say this again. When you look at the cost of certain other, uh, learning courses that I've seen over the years, they're quite expensive. But the one thing that Dan brings to it is the reality of it because he's lived it. And sometimes I think some of the courses that I've seen, they meant well, but they didn't provide what is really happening. Why is this happening? And one other thing to get back to Dan's courses, if you saw his promotional calendar, there was certain things that he had me think about and Dan will love the old line surged zones. And when Dan had that, Oh, I could put that in that surge zone there, and people would go, what do you mean by a Sergeant? There are certain spots. Dan will tell you in the store that a retailer knows that there's a heavy amount of traffic, but if you can put your product in there during a promotion to help build the basket and to then, you know, bring it back onto the shelf and all that, they'll say, chiefs, you really done your homework. You had to be thinking about that. Then certain zones I haven't thought about that

Dan: Well is, well, I appreciate your saying that. Thanks. Yeah, I'm trying to, you know, I would like in it to boot smarts versus street smarts, I mean, I'm sorry. I retire smarts versus boot smarts and as boots on the ground, you know, street smarts. And the point being is that there are a lot of people out there. That'll say, this is how it should work. And theoretically, it should be correct. However, the funny thing is that consumers do what they want. They buy what they want when they want, how they want. And that's not predictive to the degree that a lot of people like to believe it is. So, Michael, thank you so much for your time. Thanks for coming on today. Thank you, everyone, for joining us, give me a couple of hours. I will get this up on YouTube. And then, of course, this will be out in the podcast later.

Dan: Don't forget that next week. We're going to talk about the four points in terms of getting your product on the shelf, working with a co-packer et cetera. The week after that is a big one. I'm going to be talking about how do you maximize your CA how do you remake sure you don't lose cash flow or how do you maximize straight spending? So you don't lose cash flow and we're going to focus more on deductions. So, um, any, thank you everyone for being here and look forward to seeing you next week. Same time. Thank you. Thank you.

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