Stop Forcing Product Into Retail!

The single biggest factor to the growth of Pinnacle Brand Management in the last 3 years has been the fact that brands are waking up.  Owners, Presidents and Sales Managers have grown over exhausted with attempting to use the same tactics of selling with decreasing sales results.  Where Pinnacle has grown the most is on the naturals side of the business. This is because there are more brands but also for the simple fact that selling into grocery, specialty and nutrition stores has completely changed over the last five years and naturals, from our research, is slightly behind in the direct to consumer approach.

I was talking with a Sports brand owner yesterday and he was telling me that he got so frustrated trying to sell into retail that he started fresh with a new brand planning to be direct to consumer only.  With only six months of dedicated direct to consumer marketing, and really just a few direct to consumer sales, his phone was ringing off the hook with retail buyers. I said sarcastically, “you mean, you didn’t call them incessantly, begging them to bring your product in and sell them product below cost to get it on the shelf?!?!”   He laughed because he knew Pinnacle took a similar approach with one of our brands and got the exact same results.

Product innovation aside, retail buyers could care less about your product or the pricing you give them.  What they care about the most is if it will sell. Price, especially for retail, isn’t the most important factor since consumers can most likely buy online for less.  What is the most important is if there is a demand for the brand/product. Stores no longer create demand…..and to be honest, I don’t think they ever did! Brands are solely responsible for creating demand and stores are just a place where people can purchase. 

If you want to increase retail sales, dedicate your time to increase demand.  Leverage social media, digital marketing and content creation to make your product and brand very desirable and retailers will come to you, you won’t have to go out and get them.

Find Your Niche

I think we are all sick of everyone talking about how oversaturated the market is.  In our current landscape brands can be launched with very little investment and the pot of consumers are being spread entirely too thin.  You can either give up or you can narrow your focus to a niche that has potential.

There are a few keys to making a run in this market

  1. Identify with your consumer with your branding and content.
  2. Create innovative products that solve a problem that no one else is solving.
  3. Find your audience first, then create your product.

Identify With Your Customer

I recently spoke with some very large brands that felt like things were a bit stagnant and they were losing sales to much smaller companies. They were in the midst of developing new products but weren’t sure what to do in the meantime. It was clear that the best thing they could do is start producing some high level, educational, entertaining and motivational content.  Not only with this help serve their short-term goals but it will also benefit them immensely when their new products come out. 

Create Innovative Products

Brainstorming problems of your current customer and developing solutions is the way innovation is done.  Nowadays it seems that brands only wait for new ingredients to come out before they launch new products. By this time, every brand has the same solution available. Be trend setters and get to these ideas before the ingredient manufacturers do.

Find Your Audience First

For start up brands or launching new product innovation, it’s critical to know your audience in advance. This will fast track any launch strategies by knowing what content to produce, where to distribute it and how to get customers involved early or on a presale.  If you don’t have access to a specific audience, you may want to attempt to build your database first to see if your innovation makes sense for who you can reach. 

Sales Funnel 101

Sales funnels are all the rage.  We have brand owners and CEOs asking us about eCommerce sales funnels not knowing what they are or how they work, but they know it’s something that is crucial to their direct to consumer success…..and they’re right.  

Identify the Audience

Everyone seems to understand the funnel concept.  The top having a large number of potential customers, many of which won’t buy our product and the bottom of the funnel being the closest to our exact customer ready to purchase.

The key with funnels is producing the most appropriate message or offer for each group to lead them down the path to purchase.

Top of the Funnel

For us the Top of the Funnel is an ongoing discovery process.  We produce low barrier content like an educational video, an entertaining video or a blog post.  From there we can determine how many people engage with the content. We are to assume that people engaging with the content are more likely to be a customer than those that don’t engage.  We capture the data from each content piece as to which worked best and we keep testing.

Middle of the Funnel

Middle of the Funnel people have either already engaged in our content or we have a high level of confidence in their demographics that we serve content that requires some kind of committing step.  For instance, offering a free download in exchange for an email address is good for a middle of the funnel group. Again, we are to assume that if they are willing to give us an email address that they are more closely related to a person that would actually buy our product.

Bottom of the Funnel

Someone at the bottom of the funnel is someone that is ready to buy.  Anyone that has engaged in the top or middle of the funnel can be put into this group, but we also lump abandon cart people into this group.  With this audience we serve a strong call to action like a promotion or free shipping offer that motivates them to act.

Lastly, it is crucial to work backwards with your audiences.  People that make it through the funnel need to be leveraged in look-alike audiences to refine each part of your sales funnel.  If this refinement is done properly and enough times, your funnels will run smoothly. By no means does this have a “set it and forget it” type scalability, however, by constant refinement and testing you can have a very powerful sales engine. 

International Products and The USA

A large portion of our business is dealing with and representing international brands in the USA.  The largest untapped market for most international brands is the USA with plenty of opportunity still available.  Breaking into the US market comes with its own share of challenges including “Americanizing” your marketing and refining your sales strategy to compete with the top global brands that originated from America.  

The first thing in being able to compete is to control your costs. Being smart about establishing your business and marketing is crucial and could end up costly if you don’t have a strong grip on the market. That was essentially the seed of our business to create a very cost-effective way to grow in the US without breaking the bank.

One cost saving strategy that we’ll focus on today is freight and manufacturing.  European brands, in particular, are in love with their local manufacturers. The relationship bonds are very tight, probably because of excellent terms, communications and satisfaction.  This, however, can significantly impact your ability to do business in the USA. Here are the hurdles you must contest with.

  1. Expensive shipping of product to the USA.
  2. Tariffs and other regulatory taxes for importation. 
  3. Timing – product being delayed on the water/air and quarantined by FDA for weeks or months.
  4. Thousands of dollars spent in initial regulatory and customs broker fees.

At Pinnacle we have relationships with the best manufacturers in the USA.  With these relationships you avoid all the extra costs above and it allows you to price competitively with the USA brands.  Contrary to belief, ingredients used in manufacturing in the US are held to a very high level of quality checks to insure purity.  In addition, now that brands have moved away from proprietary formulas, there is no need to keep your formula a secret. 

Regardless, we always encourage brands to do whatever they feel most comfortable with however, if regulating your costs is important (and it should always be important), consider a US manufacturer to make your product as you get established in the market.  Pinnacle can source ingredients and work with the best manufacturers to insure the same quality of product, best pricing and comfortable runs to put your brand in the best possible position for success. 

Is Facebook Messenger Better Than Email?

Email marketing has been the life blood of business sales for over a decade.  Getting creative with emails, using quality, educational and entertaining content along with attractive deals have been the strategy to increase the amount of opens, clicks and conversions. A times it can be a mystery as to why people react to an email and why they don’t but typically you can attribute it to how you’ve conditioned your customer.

As of recently we’ve been experimenting with Facebook Messenger.  With promise of ultra-high open rates and click rates, it was worth a shot.  Over the course of 3 months, we noticed a 75% open rate and a 23% click rate on our messages (email average is 20% open and 7% click)…..but it gets even better.  We have been using Messenger to engage one on one with customers to help them find the right product or learn more about the health and fitness world we serve. We are very willing to share our expertise with potential customers and ultimately get them to be associated with our brand.

Facebook cautions broadcasters to limit promotional type messages, although as any good marketer knows, if you are engaging your customers regularly with “free content” the law of reciprocity typically provides. 

Will messenger replace email?  Probably not, but we can say that it’s a great add on and a very strong way to stay in front of your customers.  

Want to run some Messenger campaigns?  

Reach out to us to discuss tim@pinnacle-brandmanagement.com

Find Your Target Customer

I believe we always need to be targeting the end consumer.  Whether you are a retail specific brand or direct to consumer, your marketing needs to be focused on the person that will be using your product.  

That being said, how do you find out exactly who your customer is so you can run your targeted campaigns?  For established brands with years’ worth of online sales data, it’s easy. Simply export the list of email address from your sales segment and upload it into Facebook.  Facebook can then identify your customer.

For new brands or brands without online sales history you need to start the process of collecting data through content marketing.  Now you should already have a general sense of who your customer is by the product you offer. For example, if you have a women’s line, you already know you’ll be targeting women but with something more general you’ll want to establish some basic parameters. 

  • Age
  • Sex
  • Interests
  • Location

If you can identify these four items, you will be ahead of the curve.  

Next, create some brand specific content, blog articles that associate what your brand offers with an educational piece that will interest someone as a reader and as a potential customer.  An example like “4 Ways to Gain Weight for Your Sport” would be a great idea for a blog post for a brand that offers sports performance products.

What we do next is post this article on our site and create campaigns on Facebook specific to our target market group.  To better understand our target market, we create duplicate campaigns with slight variations (A/B testing) to see which gets more activity.  

The most important piece of data we collect is not the type of person that clicks to read the article (although that is good information) but it’s the person that clicks the article that also ends up buying your product.  Through retargeting and tracking we can specifically follow up with the person that reads the article with some sort of promotional ad and if they end up buying, we have another clue as to who our target is.

The end goal is to be able to export a list of email addresses from people that purchased so we can create look alike audiences to serve our ads to.  For best results having a list of at least 500 people can optimize Facebooks function to identify who your customer truly is. As you can tell, for startups, this could take some time.  Trust the process and don’t start this unless you are committed to it. 

Eliminate Chargebacks with a Net Pricing Model

Want to know exactly how profitable your sports nutrition company is at any time?  Switch to a new pricing model with your retailers.

Avoid chargebacks which are nearly impossible to audit.

Control supply.  If you build up enough demand for your product, you can control the supply.  When you do this, you force resellers to abide by your MAP policy. If everyone can play by the rules, the net pricing model will work.

If they cannot play by the rule then you simply cut off the retailer and allow the system to drain their inventory.

Theories on Goal Setting

I’ve been asking myself lately “why is it so difficult for people to lose weight?”

Weight loss is a billion-dollar industry, one that I profit from, yet a large percentage of people including customers of mine try and fail all of the time.  Not only is it frustrating, but it can be downright head scratching when you feel like you put in the effort and see little to no results.  On top of that, the process is inconvenient, uncomfortable and there seems to be every obstacle in your way of reaching your goal of weight loss. Sure, we’ve seen some success stories.  We’ve also seen many success stories where people end up gaining all the weight back and then some!  Unbelievable!

After pondering this question for a few days, I came to the realization that we are creatures of desire.  We are wired to want more, gain more and ultimately live in abundance.  This being said, we are literally going against the grain of our current operating system which is gaining more and attempting to restrict or eliminate with a goal of “weight loss.”

Subconsciously, losing is not something we like. We don’t like losing games, we don’t like losing loved ones, we don’t like losing, period.  So why would losing weight be any different?  Sure, in the scenario of losing weight we would technically be winning, but does our subconscious mind know the difference?

Try repackaging the goal of “I WANT TO LOSE WEIGHT” to;

1) I want to GAIN muscle

2) I want MORE energy

3) I want to INCREASE my cardiovascular capabilities

This slight shift allows you to work within your current operating system for the desired outcome.  We know that by gaining muscle we will burn more calories.  The goal in the mind is gaining muscle, not burning calories but burning calories will be a bi-product thus you will achieve the desired result.

If you’ve been struggling, try this system hack.  Convince your subconscious mind that you are positioned to add more instead of taking away and let us know what happens.

Where did your BIG POs go?

It’s not too late!  The show isn’t over!  You can still get those massive PO’s you were use to from the big specialty stores and websites, but where?  Certainly not distribution, right? I mean, your big POs from distribution stopped 5 years ago at the same time it did in specialty stores and it wasn’t until maybe mid 2016 that the POs started to dwindle from the large specialty websites.

Well, first, before we talk about chasing accounts for POs, you should adopt a direct to consumer model.  No one cares about your brand more than you do, so having a perfectly funneled ecommerce site that features content is crucial.

So where do you find the big POs?  3rd Party Amazon Resellers.  There are companies generating hundreds of millions of dollars selling products like yours on Amazon.  These are the guys you need to find, wine and dine, and link up with their systems of success. They have created systems and programs to truly develop your brand as oppose to trying to work to figure out systems with other retailers.

That begs the question, where do you find these guys so you can present your brand?  Well, you can use a service like Pinnacle that provides account management to these 3rd party resellers.  Where else? Try your distributor.  The big companies like Europa have adapted to the Amazon model quite nicely.  Top sales reps should be managing your brand for you, but again out of site out of mind, as they have thousands of brands they have to represent.

Steps to get your homeruns back;

  1. Adopt Direct to Consumer Mindset and Website
  2. Design a mutually beneficial system for Amazon 3rd Party Seller (See blog on Amazon)
  3. Work with a company that has contacts with these 3rd Party Powerhouses
  4. Talk with your distributor for help

Also, be patient with this process.  If you aren’t moving tons of volume even a 3rd Party Amazon isn’t going to give you a $100k PO out of the gate.  Allow them to use their systems to develop your brand.

Just like anything else, don’t put all of your eggs in one basket.  A direct to consumer marketing platform will open things up. If your brand is popular with the customers it will be popular with the retailers.   

One last thing.  Having multiple Amazon resellers only clogs the funnel.  Find 1 or 2 that are committed to investing in your brand and will give you KPIs to maintain the exclusive right to sell your product.

How to Sell on Amazon

The formula constantly changes.  By the time you read this, our philosophy for sales success on one of the largest market place sites may be obsolete, however, simply put, basic economics can help you master this important channel.

Just like any other retail shop or web store, product doesn’t just sell itself.  By being listed on Amazon, you are providing it as a convenience for any customer interested in your product. Do your marketing, get your customers, then give them the option to get it on Amazon since you know they are shopping there anyway.

One of the biggest keys to success is understanding Amazon’s algorithm.  Now, I don’t claim to fully understand the ins and outs, however, from a basic point of view, the more clicks, views, orders and reviews your product or store gets, the more sales you’ll have on Amazon.  The rich get richer.

So, how do you work within these systems?

Don’t try to do it yourself.  You’ll spend thousands of dollars and won’t see an ROI for a while.  Ride the coattails of the fellas that have been tripping the algorithm for years.  Amazon 3rd party resellers are certified experts. Most have their own proprietary software to increase sales and internal teams to build pages for optimization.   WARNING! Not every Amazon 3rd party reseller is good.  Check their reviews, ratings and store page catalog.  Also, don’t try to load yourself up with a ton of 3rd party resellers.  Amazon can only sell a certain amount of units, so if your product is moving along at 100 units per day, you will only move 100 whether you have 1 or 10 resellers.  Get commitments from trusted resellers to grow your brand. At Pinnacle, we have our own qualifying items on which Amazon resellers we will use.

Next, you have to prevent product from falling into the hands of the wrong reseller.  Jimmy has been buying preworkout from topsups.com on promo and turns around and hocks it on Amazon below MAP.  He’s satisfied with making 30 cents a bottle because he has no overhead working from his mom’s basement. Use the Amazon revenue calculator to figure out where you need to price items to prevent a MAP violator from popping up.  FBA Revenue Calculator https://sellercentral.amazon.com/hz/fba/profitabilitycalculator/index?lang=en_US

Assume everyone (distributors, retailers, webstores, international customers, direct consumers) and I mean everyone is selling on Amazon. Monitor your deals and your sales people.  If there is price integrity on Amazon, Ebay, etc, odds are even the most basic deal to your brick and mortar partner will be enough for them to buy, unless they plan to sell it on Amazon.

Lastly, control your inventory.  Sure, popping a massive PO for a ton of units always makes us happy….but is it to a trusted reseller?  Good resellers only order a responsible amount of inventory (maybe 6-8 weeks worth). If someone goes crazy on inventory, the likelihood of them marking it below MAP and blowing it out is much greater.  Learn how to read product velocity reports and only plug slightly above the working product demand to keep pricing stable.

These are just a few tips.  Having a great amazon store with quality content is the basics, but if you follow the guide above, you can have continued success with Amazon.