<#027> A dead-simple system to know what to do after a bar orders its first bottle

<#027> A dead-simple system to know what to do after a bar orders its first bottle
Photo by Zac Edmonds / Unsplash

You've been there, done that. You see it every day when a bar makes its first order. They buy their first bottle from you. You are probably the only person selling your brand in your city, and you focus on moving on to the next bar, forgetting about the previous one.

You have your way of working. You know whom and when to follow up with, but you lack a system that will give you consistency.

In recent years, I've analyzed On-trade sales of premium drink brands across 30+ markets. I've dug into what happens after a bar makes the first order. I will give you a list of things to check to focus on the right things and improve your productivity.

The first order is the most exciting moment for a salesperson. I still remember my first sale ever in the On-trade in Rome 20 years ago. The owner, Jamie, was a British guy, owner of a Cuban Restaurant and Bar, and I had to do everything in English. Walking out of the room, I thought: wow, and what is happening now?

I consider the first sale just like a first date. Will there be more, or will I never see that person again? How much is that bar going to sell? Will it be a significant customer of mine, or will this be the first and last order?

When a brand starts to get traction in a city, it is crucial to prioritize outlets, so you don't waste time on those selling too little. But when you start in the market, when they place their first order, how do you know if you should put in the effort with them?

Analyze your sell-out per outlet

When starting to get the first sales in a city, the most crucial thing to do is to understand where the sales velocity comes from.

Most brands I talk to speak about "average sales velocity" per outlet. They take all their sales and divide them by all their bars. That gives them the most useless metrics there could be. Everyone knows it is, but everyone uses it.

Why? Because it makes your numbers look better than they are when reporting to management.

In the beginning, bars will not order cases but bottles. Very few bars have the gut to say, "let's try a case."

To understand your potential in a city, analyze who sells very little and understand the patterns in those bars.

That's the only way to understand how to react to objections, divert from the outlets that are a waste of time, and understand where your real potential is. I am not talking about market share but essential monthly sales in bottles or cases per outlet.

Analyze your first orders every month

After gaining your first 20 buying outlets, understand who sells what. Some outlets will sell very little, but there are a few reasons why that could be. Most brands get discouraged about analysis because they think they lack sell-out data. It's a big mistake. Why?

1) most bars are small, and their sell-in is very close to their sell-out. Nobody wants to lock their cash in stock, so they buy the minimum needed to run the show.

2) especially at the beginning, your orders will be so small that you can track them with a simple excel (if you don't want to invest in a CRM system)

Tip: It is good to start the analysis when you use a sizeable number of outlets as a sample. Most outlets will give you low sales velocity if you start too early. I recommend doing this after the first three months in the market. This way, you have the chance to also factor in reordering.

Imagine you want to straighten the trunk of a growing tree. If you start too early, there is no trunk. You start too late; it's already hard and woody. You must catch the right moment.

Understand their sales velocity in the period

Whether you want to analyze it by week or month, you will understand how much they ordered since their first order with a simple calculation. By dividing the sales by the number of months or weeks since their first order, you will get your ratio (e.g., two bottles per month or one bottle per week, etc.).

A number is just a number if you don't dig into it. It's important to clarify that outlets that sell little include a few categories of bars.

Understand if there's a potential or skip it

Depending on when you are running the analysis, you will get the following: