Author: Sandra Spiro–Executive Vice President/Partner

It’s October…Are you about to plan your 2011 foodservice sales organization too safely? Now is as good a time as any to make a change and KirkwoodSpiro proposes that you break the all-too-safe “task management” paradigm this year.  Instead, we challenge you to think in terms of “channel vision” for your sales organization. There are at least 20 distinct industry segments and they are all worth going after in one fashion or another.

Through KirkwoodSpiro, we have helped our clients navigate through and prosper from many of the channels successfully and we welcome the chance to help intimately align your sales force with the top producing foodservice channels. Through a series of blogs posted on this site, we’ll further define the opportunities and scope of each channel in an effort to aid you in building a full-bodied sales engine. Let our insight be the start of a new approach to “mining” the channels. Now, let’s go “channel surfing” together…

OCS Insight

First up, let’s do more of a deep-dive into the world of Office Coffee Service (OCS).  This is a channel that is typically made up of OCS and Vending, but for our purposes, we are going to focus on the OCS network and opportunity.  First, we need to get better-acquainted with the channel’s internal players, of which there are three: the OCS operator, the OCS operator’s customer and the distributor.  In this triangle, the distributor is the wholesaler, and for the most part, sells the OCS operator product.  Next, the OCS operator services the individual outlets, which are also known as the OCS operator’s customers.   Examples of these OCS operator customers include big corporate offices, hospital offices and small business offices like a mortgage company or bank.

Most often, a manufacturer who targets the OCS channel, will support the channel by focusing primarily on the distributor.  While this is a part of the sales coverage, it alone is not the formula for growth and success in this channel. Successful “penetration” has to include the OCS operator.  Think about it this way: the OCS operator is the closest point of contact to the actual outlet and it is the OCS operator route drivers and/or their sales experts that advise/recommend products.  It is safe to say that most manufacturers’ products are no more than 20% penetrated at the outlet level in a given market. And, therein lays the “precious nugget.”  By increasing your sales penetration to include the OCS operator, you will gain increased sales opportunities and drive sales in the OCS channel.

The OCS operator is starving for programs and services to help them sell-in more at the customer level. And manufacturers who are willing to invest at this level, with either national turnkey programs or specific channel marketing programs for large OCS operators, will win. This takes an investment in becoming active in the channel and building trust with the key decision-makers.  From our experience, you can start out small and be focused.  Your go-to-market approach can either be a few regions with a local OCS expert, or you can put a national manager in place. In either case, it is best to work in tandem with a specialized OCS broker network.  And to be truly active in this channel, there are a couple of key steps to take before you start.  For one, become a participant in the National Automatic Merchandiser Association; this will provide you with current channel research. Also, by participating in their annual national trade show and their highly recognized Coffee Summit, you can form great business relationships. 

Packing & Pricing–OCS Style

Another very important area of focus is to review your packaging and pricing.  The OCS customers have unique product needs that are different from most channels; size and packing are very important to their operation.  An incorrect size could potentially lock you out all together. Also know that these customers tend to shop at warehouse clubs, so a pricing exercise across your existing channels is recommended.  This is not to say they won’t be willing to pay more for service, however, it needs to be consistent and logical in the eyes of the customer.  Sometimes it is as simple as a packaging change or a price adjustment that could make the difference in being successful in this channel.

As a consultant to this channel, we learned firsthand that customer sales come directly from marketing to the OCS operator. From a modest tweak in the budget to something more extensive, any attention and spending must be at the OCS operator and customer levels to have an effect.  This, in turn, will give back to all who are invested in the OCS supply chain.

Stay tuned for the next edition of “Channel Vision”.

Author: Mike Kirkwood–President

From a marketing perspective, primary data is the most important form of research to better understand markets, trends, products and customers.  But what if a company is still in its infancy stage and can’t afford it? Or, suppose a new market has been identified, but the marketing team is unsure about its potential and needs a quick read before further investing.  Secondary data can be the answer to gain a broader understanding.

By definition, secondary data is basically information that is collected by someone else, not first-hand.  Secondary data, in the majority of cases, has a unique advantage over primary data – it may be on a much larger scale than primary research could hope to collect and could contribute to overall findings in a more considerable manner.

As secondary data has been collected for a different purpose than what you would request, it should be treated carefully.  Some guidelines to follow:
A. What is the source of the data?
B. Is the data current?  (2 years is the maximum we follow)
C. If the data is to be combined with other data, does it relate?
D. Does the data cover the right markets, regions, product categories, etc.?

When looking for secondary data, the internet has become first-choice.  But which sources seem to be the most reliable?  In foodservice and alternate channels, a sound source to start with is industry publications.  Most articles and published research reports inherently are fact-checked and have a large enough sample size to be permitted to use.  Trade associations can be an effective and accurate source of secondary data.  Their job is to provide resources to the members, and they generally have staffing to produce and output solid research data.  Also, official government statistics are a very good source of official information.  We recommend staying away from blogs, interest-group websites, company-specific websites and literature, as that data is sometimes skewed and always challenged as reliable and accurate.

There are some disadvantages to utilizing secondary data, especially in guiding strategies and tactics, as we’ve outlined below:
1. The data can be overwhelming.  Some secondary data is so large that a user cannot retrieve the information they are looking for, often resulting in inaccurate reporting.
2. Secondary data cannot reveal specific insights.  This will be left up to the individual or team that is reporting on the secondary data.
3.  Secondary data is closed.  The user of secondary data has no idea of what was included, probed or omitted.
4.  Sometimes, there is a question in the quality of the data.

Review and analysis of secondary data can provide a cost-effective solution in addressing trends and describing current situations from a broad point of view.  Secondary data complements, but does not replace, primary data collection.

We are KirkwoodSpiro.
And we want to get straight to the point: We are not an “advertising agency.” We are BUSINESS ACTIVATORS. 

That means our single-most important objective is to PARTNER with you as our client to profitably maintain and grow your business.  Our experienced blend of SALES and MARKETING professionals will help you make just the right connection to sales success.  Together, we will be proactive, not reactive.

As B2B experts, we have full knowledge of sales and distribution channels in multiple industries—including yours.  We specifically design strategies and tactical executions to get things moving—particularly—cases of your product.

http://www.kirkwoodcom.com/

Author: Kristen Minnis–Senior Account Executive (Phillies Fan!)

Roy Halladay, of the Philadelphia Phillies took the mound for the final inning of his epic no-hit, one-walk performance against the Reds in Game 1 of the 2010 National League Division Series. It was the first time anyone has tossed a no-hitter in a postseason game since 1956 when Don Larsen of the New York Yankees threw a perfect game to beat the Brooklyn Dodgers. In the Foodservice B2B world we practice in, how do we ‘pitch’ a ‘perfect game’ with our email marketing campaigns?

Foodservice B2B manufacturers pitch email marketing campaigns to their customers and prospective customers to generate an immediate action, build awareness, contribute to branding, and strengthen and encourage relationships—all with the primary objective to strike a return on their investment. And there are a number of ‘pitches’ that can be thrown: a promotional pitch, a new-product-introduction pitch, a company or brand-update pitch, a pre-trade-show message pitch, an invitation pitch.

Today, most of these pitches are connected to websites, micro sites, facebook, blogs etc., which bring speed to every pitch. The speed to connect target customers to information beyond your email is a sleek shortcut—they don’t have to ‘run the bases’ to gather all the facts about your new product or promotion—all they have to do is click. Of course, having the best pitch, an award-winning campaign, a clear message, flawless connectivity, and mailing consistency is still not the perfect game if you are not seeing an ROI(return on investment).

Spending on email marketing will reach $1.1 billion in 2010, growing at a compound annual growth rate (CARG) of 4.5 percent from $855 million in 2005, according to Jupiter Research forecast. B2B email spending is expected to grow at a CARG of 2.4 percent, reaching $206 million in 2010, according to MediaBuyerPlanner. 

Email marketing is proven to work—and work well—when there is the equivalent of pre-game warm-ups and post-game evaluations.

KirkwoodSpiro’s Point of View on Pre-Game Warm-Ups: Prior to pressing the “send” button to your email marketing campaign, ask yourself/the team some questions regarding your database: When was the last time we updated our email lists? Did we import all new trade-show lists? Are new customers included from website leads? Is all the contact information included so we can sort through open-and-clicks with different queries (for example: by state, by city, etc.)? How are we recruiting new emails for our distribution list? Are all lists organized, so that we can do specific mailings for promotions? Have we looked at “unsubscribe” or “bounce-back” problems recently for analysis? Are we proactive in informing customers who are on our bounce-back list to “white-list” us so that they get our updates?

Keeping your lists in shape this way will facilitate timely execution and produce higher results with each email execution. This is a team effort that needs to be done manually and consciously.

KirkwoodSpiro’s Point of View on Post-Game Evaluations: Batter up and know your stats and standings after each email campaign, so you can evaluate your errors and capitalize on strengths and weaknesses. These email reports are very sophisticated with measurements on clicks, opens, forwards, unsubscribes, bounce-backs, and content popularity. It is important your sales and marketing teams get a report, so they can follow-up with the high clickers/repeat openers and address questions they may have in regards to your marketing campaign. Measuring campaign reports against monthly/quarterly sales is an important evaluation to practice, too, because practice makes perfect. And perfect, in this case, is showing and increasing your ROI, which will happen as you learn and grow from each email marketing campaign, enhancing the opens and clicks, and ultimately leading to more sales. Play ball!

It’s incredible.  There are so many opportunities for brands to partner with other brands to make some noise and increase sales volume.

On paper, the idea looks terrific.  First, the products complement each other and make perfect sense to the operator.  Not only can the promotion offer a price reduction (rebate), but also recipes, merchandising, and a whole treasure chest of tools.  Both manufacturers can agree on a set of targets—this could be a select group of segments or regions.  And both manufacturers can financially support a communications program, which could include a few ads, some collateral and an online presence to get the word out.

So what’s the problem?

Well…
1. Street Support.  In most cases, these types of promotions are meant for the street, not national accounts.  Promotions like these can drive market penetration within a particular distributor or geographic area.  Therein lies the challenge.  Success requires distributor acceptance and participation.  Not everyone will be as enthusiastic as you about a dual brand promotion. Particularly the DSR who has spent months working accounts on a specific branded solution for the very same product that you are trying to push.  The incentive must be great.

2. Broker Support.  We would bet that finding broker partners that represent both manufacturer partners for a branded promotion is almost impossible.  We would also bet that the majority of brokers would represent one of the products for the promotion and a COMPETITOR to the second product of the promotion.   The other possible tangle is that Broker “A” represents one product, and Broker “B” (in the same market) represents the other product.  Broker “A” has no conflict, but Broker “B” also happens to represent a product directly competitive with the Broker “A” product.  There is no solution; no one will work the promotion.

3. Manufacturer Agreement.  One of the two partners is always stronger.  An example might be that one product has awesome branding and distribution and the second partner could enhance their presence in the market by promoting with them.   There is nothing to be gained for the stronger partner – unless the other partner bankrolls the whole promotion!

There are other conflicts, but those are the top three. And they prove the point that  in foodservice, a great idea can be easily communicated–but if there is no sales support to drive the promotion, and we mean enthusiastic sales support, then it will, as they say, die on the vine.

Don’t get us wrong.  Great ideas are always worth pursuing to the end.  If two national brands want to get together to drive sales in a region or market, it might make the most sense to coordinate with a participating distributor first.   Partners can locate targets that neither currently sell to–and drive volume that way.  In that case, everyone wins.

Everybody talks about training:  Training the direct sales team, training the broker reps, training the distributor sales rep (DSR), training the trainer.

We all know the statistics: DSRs only sell 10% of what is carried in the warehouse. So if Broadline Distributor “A” has 8,000 items in stock, the DSR theoretically sells only 800.  Nevertheless, DSRs remain the critical link to the operator customer and it is vitally important that you get these professionals on your side–carrying your products with enthusiasm and eagerly relaying their features and benefits.  Moreover, when a potential product problem or dissatisfaction arises with an operator, the DSR needs to be ready with an answer or an option.  This is where training is most important; your product or service HAS to be top-of-mind.

KirkwoodSpiro recommends simple training platforms.  We also recommend the use of technology to deliver and reinforce training.  In a recent distribution study by Technomics, 89% of those distributors surveyed indicated that they would like to receive and execute training materials in an electronic/digital format.  Be it as simple as a piece of collateral or a product training video, it is access through the laptop that is critical.  DSRs are mobile–and as manufacturers, you need mobile solutions. 

KirkwoodSpiro successfully provides our manufacturer clients with simple, digital training tools that work well within the time constraints of a typical DSR day. Simple training platforms like video are excellent for new-product introductions.  Through the engagement of video, DSRs can learn about new products and new uses on their own time and at their own pace.  They can also copy the videos and present them to operators to further promote the product and help close the sale.

To learn more about KirkwoodSpiro’s digital training tools for brokers and DSRs, send us a quick note or contact Mike Kirkwood directly at: mk@kirkwoodcom.com.  You can also see some of the videos we have produced by logging on to: www.reelinfo.net.

Foodservice B2B manufacturers and distributors are incorporating social media into their marketing mix at increasing rates

Participating in social media activities like Facebook, Twitter, Blogs, YouTube, Micro Sites etc. are more geared towards PR marketing efforts. These media venues help to enhance branding and build credibility. They also help to establish relationships with foodservice leaders and potential/existing customers. But you should be mindful that these tools are not meant to be marketing brochures. Your fans and followers do not want infomercial updates in their news feed every day—that is equivalent to email spam messaging. It is important to find other means of relating to your customers and fans. Provide value to your product or brand through the content you share on your social media sites. Content and transparency are key—for example: provide updated foodservice news links; show them who your team is through fun videos; have contests; ask open-ended questions; hire a team of bloggers to write about topics for your readers; show pictures of products in real-life settings and not just in catalog shots; highlight customers in status updates; send out event invites through Facebook, and post all PR. The content possibilities are limitless. By relating your content to your audience, you open the doors for engagement such as comments, likes and questions etc. The engagement can become viral, if one chef comments on your latest facebook post , all his/her chef friends can view that they commented on your page and become curious to either write something too, or if they are not a fan they might become one! These social media sites are free for participation, but creating content is a daily creative process. We see more and more foodservice manufacturers outsourcing these social efforts to their marketing agency.

At KirkwoodSpiro, our point of view is that if a company is going to decide to get involved in new web 2.0 communication tools (facebook, twitter, blogs, etc.) they should not be an afterthought to their overall business plan, but should be integrated into the marketing plan with a clear objective and strategy set in place. Setting a clear objective and strategy can help with your efforts in measuring ROI. If you are looking for more ways to qualify and measure your companies web 2.0 ROI, here are a few suggestions for measuring:

• Create a micro-site page to collect leads, bundled with a fun promotion to attract potential customers there.
• Measure the sales inquires that are coming from your company website—ask these sales leads if they have been to any of your social media sites.
• Create a full-bodied campaign using select social media tools and integrate campaign with online/print advertisements, trade shows and events, PR material and company website. The more impressions you create, the higher your chances of influencing a buyer to purchase.
• Determine the total revenue from any sales resulting from the leads you collect.
• Facebook is an open-book. Keep track of what your competitors are getting involved in and take notes of new products they are introducing to assist with your product development research. Knowing what your competitors are doing in real-time is priceless!

Recent studies have shown that companies active in social media generate more revenue than their less-social counterparts. Prospective customers are increasingly comfortable interacting with brands on social media sites; the risks of not engaging are too significant to ignore.

If your company is looking for some social media help, give KirkwoodSpiro a call at: 973-335-4400.

Our point of view is that social media tools should not be used as an afterthought to your marketing plan. A clear social media strategy should be put in place that meets your company’s objectives. If you need help with your B2B social media strategy, please call us @ 973-335-4400.