SALES SUSTAINMENT: Turning initial sales momentum into long-term success
Which of these three scenarios best describe your situation?
- You are still fighting for distribution, feeling like will be your biggest barrier to success.
- You’ve just earned distribution, and are scrambling to get items set up in retailer systems, getting electronic ordering to work, and making sure production is ready to fulfill the first wave of purchase orders for initial inventory. You’re not spending much time on planning year two.
- You’re a few months into new distribution for the year, and are trying to reconcile why your volume forecast is so off. Most likely, you’re moving product at a faction of the velocity you anticipated and are desperate for cost-effective ways to spur more sales. Or you could be among the lucky very few (in a sense) that struggle to keep items in-stock as they actually outperform initial expectations.
In truth, year-one of distribution is perhaps the most vulnerable and dynamic state for any company. It is a time when huge losses or huge profits could be realized. It is a time when decisions to maximize short-term profit can destroy long-term sustainable sales.
Unfortunately, year-one never ends…it is a cycle that restarts every time new item distribution is gained.
While it is a scary time, it is also a great opportunity to learn and adapt. It is a time when compassionate buyers may be a little more lenient. And it is the time to establish the momentum that will keep you moving forward.
THE NO-LONGER-NEW SALES DIP
Few companies realize that many new products need to be carefully considering how decisions today will impact sales momentum in the future. A variety of factors cause this momentum to be lost, which ultimately leads to the same end: Lost distribution and becoming another statistic (one of the 95% of new products that fail).
Many failed products enjoyed a time when they had reasonably good distribution and initial sales that suggested a bright future before they came to this fate.
The good news is that all three of the initial states mentioned above converge at a point called year-two. This is the time when new products need to protect their distribution and have plans to anniversary past 52-week sales. It is the time when those that actually know what they are doing start to demonstrate that competitive advantage.
Managing year-two business is not unlike managing the unpredictable temperaments of an infant entering their terrible twos.
Your product is no longer the new shiny object on the store shelf that everyone adores.
The buyer now has sales data to judge the true strength and importance of your product and holds you accountable to that performance.
That buyer is once again looking for other ideas and opportunities to grow sales that could threaten your distribution.
The competition has had time to notice any success your product achieved and is looking to steal that market share or shelf space.
You’ve probably had a number of missteps from the prior year, which you will need to answer for and prove that you will not repeat again this year.
Based on your year-one learning, you might be asking for distribution in new stores, with additional variants or new products that are needed to accelerate your sales momentum into year-two.
While year-one provided a lot of educational moments related to getting the operational aspects running smoothly, year-two will likely be even more challenging as you need to develop strategies that deliver sustainable sales.
In year one, everything was blue sky. In year two, a more disciplined approach to growth is needed. Optimistic projections based on aggressive assumptions aren’t acceptable.
THE BUILDING BLOCKS OF GROWTH
Our solution to this problem is based on building blocks. These are an assortment of coordinated, tactical actions that combine to deliver sustainable sales by addressed the issues and opportunities unique to your situation.
But developing a building block strategy is easier said than done. It is possible to miss the biggest building blocks, pick the wrong building blocks or pick an assortment of building blocks that don’t even sum up to the sales number you need:
Your product may need to address weak underlying metrics like low awareness or low trial.
Your pricing strategy may need to be modified to accommodate how pricing (or value perceptions) have changed on competitive items.
You package or label design may already need to be updated.
New variants may need to be offered to address changes to product preferences.
Greater investment in marketing or content creation may be needed to address competitive responses.
Poorly performing skus may need to be sacrificed.
Are you somewhere in year-one, with little or no plan for year-two?
Or are you actually a few years into existing distribution, and have been reliving year-two challenges like it was Ground Hogs Day?
Are you stuck relearning the same lessons as you fail to gain new distribution or fail to maintain distribution on existing skus or make those skus more productive?
Contact us to identify the building blocks that will help you either avoid or get out of this cycle and make next year even better than this year.