Question from client:
$3mm confection company wants to go national; capacity to rapidly grow. Need high end retail customers for this premium brand.

What direction is best to build sales? Direct sales force calling on targeted accounts, or indirect via distribution or food brokers? Is there a way to assess situation before choosing one or more directions?

Great Question!

In short, an interesting strategy would be to blend both approaches. Specifically (1) in a market with a strong retail presence (high end…e.g. Norstrom) go with a direct sales model…the business volume will more than pay for the resources required; (2) in other “attractive markets” (…would need more info on your products and company to define) use a distribution channel model where you can be cost efficient by “piggy-backing” on an existing sales network….

Craig Lewis, Regional Managing Principal, Phoenix.
408.394.4514
craig.lewis(at)oneaccordpartners.com

Numerous scenarios are possible from this high level view and vary dramatically based on the type of confection. Here are a couple possible scenarios.

1. Both Direct and In-Direct via brokers have merit but require much more depth of information to recommend direction in this case. The primary issue will be the current cash position (or capital access) of the company. Direct sales organizations (especially when you have access to the talent) are my personal preference but require an up front capital investment. The key to success in such a venue is to hire people that have previous success and relationships with the target prospects. In-Direct is less expensive short term and can provide the instant relationship. The down side is you lose control of your brand and message.

2. Depending on geographic distribution, it is plausible that an in tandem Direct and In-Direct strategy are viable depending on distribution patterns and product make-up.

3. The key is relationships and finding a connection into the first, targeted account. The first one is gateway into the others.

4. Direct Response TV is an unconventional option if the product supports such an initiative. Building the brand first via alternative outlets is a prescribed plan by some buyers. They may desire customer demand before viewing the product seriously.

5. Overall an assessment would be the most prudent move and the depth would vary again based on organizational complexity, current distribution, competitive make-up, and product to name a few.

Darin Leonard, Regional Managing Principal, Seattle.
206.229.1187
seattle(at)oneaccordpartners.com

What’s the competition doing today? As noted above, there are numerous scenarios possible for this company. Without assuming too much, and depending on “what going national” really means to this $3M company, it all depends. It depends on how much capital the company is willing to invest and/or, how strategic they want to be with the right partners and/or distribution channels.

Regardless of the distribution channel(s), whether its high end retail direct or partnering with established high end distributors, consideration of how the product will be promoted to/through these channels will be key. Technology solutions also apply, along with an effective web strategy also.

Dave Swartzendruber, Principal, Chicago.
312.265.5843
chicago(at)oneaccordpartners.com

You are right to ask the question as the answers will be pivotal to both your short term and long term growth. The right answer will, of course, come from asking yourself not only the right questions but also asking them frequently.

A lot of your answers will stem from “How is the item positioned?” Upscale? Downscale? Superior quality? Great value? The reason your next steps might determine your short and long term growth potential is because how you position yourself now will carry you forward — or hinder your longer term success. In other words, how do you see your brand’s key benefits and exactly who will be your toughest competitors?
Also, try to understand what your “brand” is all about. What is the emotional connection your customers have with the product? What competitive attributes or factors are driving it? Where’s the real customer perceived value?

You are right to asses the situation before moving forward forcefully. Your direction hinges on the factors mentioned above, and you have ample time to test your alternatives now — much more so than you will later. Without knowing the details of your situation, I suggest you see if there are ways to test alternative distribution methods. Think of your current market and distribution as the center of the bulls eye and your expansion efforts will test each concentric ring as you grow from the center. It’s better to test a few smaller steps before you shoot for the national goal. Your core customer base may change as you expand.
Finally, the right development of your web site and effective “search engine optimization” and “search engine marketing” efforts will give you public visibility at a very low cost — at least until you ready for even bigger efforts.

At the end of the day, remember to look at the factors involved, analyze your options, create a profitable direction, and execute.

Effective execution and ineffective branding leads to many business failures.

Feel confident that you seem to be asking the right questions.

Jim Fisher, Principal, Boston
781.449.4333
boston(at)oneaccordpartners.com

Believe it’s essential for a small company to understand its mission & purpose in laying the foundation for how it wishes to approach accelerated revenue growth that will sustain over time. This informs the essence of the product and the organization to define the brand and how that brand will be perceived in the marketplace and with myriad stakeholders.

The sales development organization strategy will be guided by how the brand and company’s value proposition is to be presented to direct customer and channel partners. Whether through direct, indirect or multichannel strategies there are a lot of options today. But a strategic focus to sales execution will further organize the pathways to how the company wants to be merchandised and who the right retail customers and channel (indirect or food brokers) players/partners are to promote the premium value associated with the product.

Peter Klinge, Jr.
Regional Managing Principal, Salt Lake City
peter.klinge(at)oneaccordpartners.com

The key is the last statement “Is there a way to assess situation before choosing 1 or more directions?” The answer is “yes” and independent assessment must be your first step. An Interim Sales Executive solution, provides the experience to fully assess the situation, has the expertise to develop a comprehensive strategy and understands what skills are needed to best implement the designed tactics.

The “interim” position efficiently provides the executive level performance needed at this critical time, but does not lock the company into a long-term high fixed cost solution. The flexibility of the “interim” solution facilitates quick improvements to take advantage of market dynamics and insights that are learned sales call by sales call. Before you choose a direct sales or indirect sales path use an Interim Sales Executive to further clarify and assess all the factors involved in your opportunity.

Dale Hintz, Principal, Dallas
972.824.6923
dallas(at)oneaccordpartners.com

My experience in the food industry, especially given an organization that is trying to establish itself, is that you’ll both need and want a solid well recognized food broker. A smaller firm will rarely be in a position to grow fast enough nor even have the funding to grow organically at a pace that the market will require. This is a well established industry, and the historically successful food broker’s have the necessary existing relationships that will dramatically reduce the sales cycle, while additionally offering your firm a variable cost model, both critical to early growth.

Michael Pearce, Principal, Los Angeles
425.830.4156
michael.pearce@oneaccordpartners.com

Choosing the right channel for your product will make a significant impact on your revenues and success, so you are right to think it through. Start by looking at the universe of channels.

There are three channel categories and here is the purpose of each: 1. Direct (Field Sales Force) – Good for complex sales, when control over the sale is required, or high-touch service is needed. 2. Indirect (Partners) – Good for lower cost sales, complete solutions, when local customer care is required, or you want to increase your reach in a given market. 3. Direct-to-customer (i.e. telephone, mail and Internet) – Lowest cost channels, maximum reach, efficient for simple items.

Create a coverage model by thinking of a grid with customers’ needs on the left and channel options across the top. Rank the channel options based on customer needs and you have your first stab at a coverage model.

Remember to keep testing and refining. That’s how successful marketers stay successful. Good luck.

George Reinhart, Principal
george.reinhart(at)oneaccordpartners.com

For me knowing the target channel or account base desired to penetrate will help formulate the correct strategy. Typically higher end retail customers like dealing directly with the company they are buying from to establish a closer partnership and relationship. If this is the case then going direct might make the most sense. Assessing the situation first is dependent on a number of variables, i.e., company cash position and ability to invest into sales before results, short and long term goals, etc. Again depending on the short and long term goals it might make sense to look at a hybrid approach whereby direct sales is targeted to the channels that need the relationship, i.e., Nordstrom for direct sales. Use in-direct sales (brokers) to establish distribution to larger mass retailers such as Kroger or Safeway.

Richard Brune, Principal
richard.brune(at)oneaccordpartners.com