When we get a new client, one of the first things we help them with is finalizing a store list. Which stores will receive product sampling demos and how often? This may sound like a simple task but it’s actually quite nuanced.
Usually, our clients start off with a wish list – a list of almost every point of distribution. Then we help whittle it down. Here are some of the questions we ask
1. What are your must-win markets?
If you had to select 5-10 cities that are key to your company’s growth this year, which would you select? It’s important to be as specific as possible here.
2. Which retailers are the highest priority?
If you just got new distribution at Whole Foods, that might be the highest on your list. If you know a key competitor just got more shelf space at Sprouts, you might prioritize that chain for a time.
3. What is your budget?
This will help us determine how many demos you can execute/month/quarter and how many target markets and retailers you should focus on.
After answering these questions, we apply to the 80/20 rule to further narrow the list. If you’re not familiar with this rule, most companies make 80% of their revenue from the top 20% of their customers. So, we take the top 20% of stores and compare them with the target markets and priority retailers. Stores that are in must-win markets, a priority retailer, and in the top 20% are a triple win and these go on to the next round.
If there are too many stores that fall into the triple win category, we look at a couple of options for cutting down the list further. We can remove stores that are lower in revenue or we can remove stores that are a little outside of the target markets. The revenue reason should be self-explanatory. The location criteria might be a little hazy, so let’s dig deeper here. It’s difficult to find amazing reps who are willing to cover a geographically large market, so you usually have to hire reps specifically assigned to the outlier stores. And usually, reps who work just one or two shifts per month are not your best performing. By removing the outlying stores and creating a more compact region, you will likely have reps who are more consistent, and this consistency will help them gain the skills they need to sell more units per demo.
If you don’t have enough stores after adding your triple win stores, you have some choices to make. You can increase frequency at your highest volume stores. Or you can look at adding in stores that fall in the top 20-30% of revenue to see if your demo program can increase the stores’ velocity.
Spending time ensuring you’ve selected the best store list is time well-spent. Product samplings in low-traffic stores, or in non-target retailers usually don’t produce the ROI you’re hoping for. By selecting stores that fit your overall growth strategy, you will be able to leverage the product samplings to achieve your sales or distribution goals.