<#018> How outlet segmentation can help you prioritize whom to sell (5 simple steps)

<#018> How outlet segmentation can help you prioritize whom to sell (5 simple steps)
Photo by Kelly Sikkema / Unsplash

In today’s issue, I’ll talk about why it's important to use outlet segmentation and why it's crucial for hunting new bars. You will learn to prioritize the outlets based on a very simple matrix.

Unfortunately, most drinks brand builders use segmentations just as a monodimensional pyramid to segment bars based on how cool they are and not on how easy it is to gain them as a customer. Whether you call your segmentation A, B, C, or Gold, Silver, or Bronze, you will realize that not all A and Gold outlets are the same for your brand.

I've spent thousands of hours in the field, in many countries and I did many mistakes, using my time ineffectively. I then decided to change my approach and dig into what I was doing wrong. Here’s what I’ve learned.

It's not only about how cool an outlet is. It's about 1) how your brand fits its range and 2) how able you are to sell them a bottle.

When I ask salespeople what are the best bars for their brand in a city I usually get the same answer: a list of the coolest venues. I could have basically googled it and I would get the same result. Some more sophisticated salespeople, give me a list of "less known" outlets, where industry people hang out but I hardly get a detailed description of a bar or restaurant that perfectly embodies their brand's positioning. They only refer to the cool factor, not at all about how their brand's commercial proposition and target occasion fit that venue.

By targeting "cool outlets" tout-court, you end up hunting where all the other hunters are. If your brand doesn't resonate with the identity of the bar you are going for, your brand ends up becoming a commodity "a gin", "a tequila", "a vermouth", or "an IPA". For a bar owner, if there's no clear fit, it becomes just like choosing from an IKEA catalog.

I remember when I started as an On-trade sales guy. I did that mistake all the time. I identified the best places in town and I kept going after them, getting all sorts of replies: "the owner is not there", "come back in 2 weeks", and "I need to speak to my partner". Very few people are honest and tell you a loud and clear "Fuhgeddaboudit" (forget about it), so you must learn to read that between the lines.

If you don't, you end up keeping "dormant leads" in your pipeline forever, hoping to get a listing that will never come. It takes guts to remove a lead from the pipeline and acknowledge that's not for now. Maybe in a few years' time, they'll come to you but not this month, or this year.

How to understand the right bar for your brand:

Target Occasion: how does your core occasion fit with theirs? If your occasion is a "shot", a fine dining venue won't be right for you, even if it's on all the guides as the best place in town.

Commercial Proposition: what's your purpose, what values does your brand represent? How would you translate your brand positioning into 3 types of outlets? Those are the outlets where your brand would perfectly fit their drinks range.

So how can you prioritize your hunting list? I like to create a checklist to rank my target outlets so that I focus on those in which I have more chances to succeed. I give them a score based on 5 criteria:

#1. Your core occasion and proposition fit with the venue

The first thing to do is to create a list of outlets that are in line with the target occasion and commercial proposition. That creates the emotional connection that is the base of the conversation. Without that chemistry, there's no chance.

#2. Your relationship with the owner/manager

If the first point is ok, you move to the next question: What's your relationship with that place? Do you know the owner, the manager, or anyone working there? It's important to have created a demand for your brand so that there is some awareness and you don't walk in cold. That is often not enough but it helps you to put your foot in the door and maybe get the first bottle in. From that, it will be your job to make that 1 bottle turn into 1 case.

#3. Your distributor's relationship with the owner/manager

Sometimes you may not know anyone there but your distributor or wholesaler may already sell their products there. That is a great starting point. If you convince their salesperson that their customer and your brand are a great fit, you may succeed.

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