MISTAKE #17: You have a short fuse
In my prior article, I might have taken the wind out of your sales related to how long it can take to get items in distribution at retailers.
Because it can take so long to build distribution, you need to make reasonable sales growth projections and you need to design a marketing program with longevity to deliver that growth over time.
Too often, companies make assumptions about explosive growth that never materialize. They have marketing plans intended to make a big splash for just a few months before disappearing. This comes from the misguided perception that getting products onto store shelves is the secret to sales.
In reality, gaining distribution is nothing more than an enabler to sales. Seeing a product on a store shelf does not make someone want that product anymore. Retailers expect vendors to be the ones creating demand for the product.
Gaining retail distribution should be the result of demand for your product, not the source of it.
More products grow sales at a rate that could best be described as a slow burn. And their marketing plans rarely make more than a few ripples.
The perception that so many products are overnight successes is, unfortunately, the result of the greater airplay given to the rare product that does experience explosive growth. And that explosive growth…well, that probably was actually the result of years of effort that looked a lot more like a slow burn.
LIGHT YOUR FIRE
Does your volume forecast assume that distribution drives demand? Do you think marketing programs in Q1 will still be driving sustained volume in Q3?
Consider the following imperatives as you plan to support new distribution:
Demand needs to exist before your items are in distribution: Don’t wait too late to start building demand. A retailer might give you 8 weeks to demonstrate sufficient sales before they start considering deletions to make room for other items during the next line review. That’s right, buyers frequently have less than two months of sales data to measure the success of your product. You can’t rely on shoppers that just stumble upon your product on the shelf to deliver the sales you need to remain in distribution.
Few products have the marketing assets or buzz to produce explosive growth the day they enter distribution: We have a name for these rare products. We call them iPhones. While you probably have a few raving fans on Facebook or glowing 5-star customer reviews, you should assume it will take time to reach and convince most shoppers to buy your product. If you can elevate awareness or trial beyond the low single digits, you’re a pretty big deal.
Don’t ignore possible competitive reactions: Big companies don’t give up market share willingly. And if they feel threatened, they can afford to buy sales away from your new product through simple tactics like high-value coupons. They can suffocate your product the moment it is starting to show signs of life. Realize that the more sales potential your product appears to have, the more you should anticipate other companies trying to throw water on the flame.
DON’T FEEL THE NEED FOR SPEED
So many good products fail because they are put on too short of a timeline to prove their success. They aren’t given the right amount of time and right resources to really take off.
Have you put your product on the fast track to failure by putting it on an unrealistic timeline? If you answer ‘no’ to any of the following questions, you probably are:
Do you plan to turn on your demand-creation program before your product new distribution gets fully rolled out to stores?
Are you committed to having a 12-month plan for steadily growing demand?
Do you have a plan to adjust your volume projections as competitors respond? Or do you have reserve funds to fight back?