Moving from Short-Term Thinking to Long-Term Value
In the beer industry, it is common for suppliers to offer incentive payouts to distributors’ sales teams based on a list of priorities that align with the supplier’s goals. These goals include increasing the volume of beer sold or promoting new product launches.
However, this approach to sales incentives can sometimes lead to a focus on short-term gains and a need for more consideration of the needs and goals of the distributor’s retailers. As a result, sales teams may focus more on meeting the supplier’s priorities than doing what is right for their business and the retailers they serve.
To address this issue, distributors can adopt a different approach to sales incentives that encourages their sales teams to think more creatively about adding value to their retailer’s businesses. This could involve offering incentives for salespeople who develop innovative solutions to meet the needs of their retailers, rather than just meeting certain placement, volume, or promotion targets.
Beverage distributors are often legacy businesses serving their communities and customers for decades. Now is the time for distributors to adapt and transform their sales teams’ thinking to align with their long-term view.
Distributors can foster a more sustainable and successful sales approach by teaching salespeople in the beer industry to think differently about their role and how they can add value to their client’s businesses.
Short-term thinking played out
Unfortunately, in the beverage industry, it is common for sales teams to take a short-term thinking approach to retailers’ businesses.
It can be a perverse incentive for a sales rep to be paid to make a placement on a product that they know will not sell well in a retailer’s store. In this situation, the sales rep may be motivated to focus on meeting the supplier’s priorities and earning a commission, rather than considering the needs and goals of their customer.
While making the placement may help the sales rep meet their quota and earn a commission in the short term, it can harm the long-term relationship between the distributor and the retailer. The retailer may become frustrated if they feel that the sales team needs to consider their needs and push products that are not suitable for their store. This can lead to a breakdown in trust and a decline in sales for the distributor.
Furthermore, making placements on products unsuitable for a retailer’s store can waste time and resources for both the distributor and the retailer. Sales reps need to consider the long-term impact of their actions and ensure that they are adding value to retailers’ businesses, rather than just focusing on meeting short-term goals.
Out of date product, anyone?
When sales reps make placements on products that sell poorly in a retailer’s store, it can lead to a buildup of excess inventory that is difficult to move. This can be a costly and time-consuming problem for the distributor, as they may need to devote resources to storing and disposing of the excess product.
In some cases, the excess inventory may consist of outdated or seasonal products that are no longer in demand. In these situations, the distributor may be forced to dispose of the product, incurring additional costs.
In addition to the financial costs, the buildup of excess inventory can also hurt the distributor’s relationship with the retailer. The retailer may become frustrated if they feel that the sales team needs to consider their needs and push products that sell well in their store. This can lead to a breakdown in the relationship between the two parties.
The costs and problems associated with excess inventory and outdated products can be avoided by implementing solid sales transformation processes. These processes can help sales teams think differently about their role and how they can add value to retailers’ businesses, rather than just focusing on meeting short-term goals.
Focus on long term success and keep my suppliers happy?
As a distributor owner, it can be challenging to navigate and manage the many objectives that your suppliers have for their sales. Often, suppliers will push incentives in their efforts to drive revenue and growth. However, this can sometimes lead to a focus on short-term gains rather than long-term value for your business and your retailers.
Here are some specific examples of how distributors can transform their sales team into a growth mindset with a focus on long-term value, while also benefiting the partnership between suppliers and distributors:
- Train sales reps to think creatively: By training sales reps to think creatively about how to add value to retailers’ businesses, distributors can help their sales team develop innovative solutions that meet the needs of their clients. This can benefit both distributors and suppliers by enabling the sales team to create more value for retailers and drive sales.
- Consult with retailers: By consulting with retailers and seeking their input and feedback, distributors can build stronger, more sustainable relationships with their clients. This can help them to identify opportunities for growth and innovation and develop solutions that meet the needs of their retailers, while also benefiting their suppliers by ensuring that their products are being effectively marketed and sold.
By implementing these strategies, distributors can transform their sales team into a growth mindset, focusing on long-term value while benefiting the partnership between suppliers and distributors.
Game plan: What to do first
If you are a distributor owner looking to transform your sales team and shift their focus from short-term gains to long-term value, it is important to focus on the right steps and priorities. Here are some key considerations for making this transformation:
- Identify your goals: Before you can begin to transform your sales team, it is important to identify your goals and what you hope to achieve clearly. This may include increasing sales and profits, building stronger relationships with retailers, or expanding into new markets. By identifying your goals, you can create a roadmap for success and ensure that you focus on the right priorities.
- Analyze your current sales approach: To identify areas for improvement, it is important to closely examine your current sales approach and analyze what is working and what is not. This may involve gathering and analyzing sales data, consulting with retailers, and soliciting feedback from your sales reps.
- Develop a long-term mindset: To shift your focus from short-term gains to long-term value, adopting a long-term mindset and building sustainable, long-term relationships with retailers is important.
- Train and empower your sales reps: To successfully transform your sales team, it is important to invest in training and empowering your sales reps. This may involve providing them with the tools and resources they need to succeed and teaching them how to think creatively and develop innovative solutions.
- Measure and track your progress: As you implement your transformation plan, it is important to measure and track your progress to ensure that you are on track to achieve your goals. This may involve gathering and analyzing sales data, soliciting retailer feedback, and conducting regular reviews with your sales reps.
By focusing on the right steps and priorities and adopting a long-term mindset, you can successfully transform your sales team and shift their focus from short-term gains to long-term value.
Want to fast track this change in 60 days?
The VXP team and system can help you fast track your transformation in just 60 days if you are a distributor owner looking to shift your sales team’s focus from short-term gains to long-term value.
Specializing in working with distributors to implement growth mindset plans that benefit all parties involved, including suppliers, distributors, and retailers, VXP can help you analyze your current sales approach, develop a long-term mindset, train and empower your sales reps, and measure and track your progress.
VXP will work to reshape how your suppliers set their objectives and repack their game plan into a sustainable growth mindset, leading to long-term, sustainable growth for all parties involved and creating a win-win-win situation.
You will see how the VXP system allows your sales team to develop customized solutions that meet each retailer’s specific needs and goals while also considering your suppliers’ short-term priorities. VXP will work with you to communicate with your suppliers and find ways to align their goals with yours and your retailers’. This includes conducting sales data research and company sales culture transformation training to identify opportunities for growth and innovation.
By working with VXP and being open to reshaping your view, you can develop a sales incentive structure that benefits your suppliers, your business, and your customers too. Contact us today for a discovery call.