By Terrah on Sep 21, 2016 8:00:00 AM
If you sell products into major US grocery, drug, club, c-store, or specialty channels there is a good chance you are heavily reliant on brokers. Some companies we work with have 50+ different brokers covering various classes of trade or territories. Others rely heavily on one single national broker for driving their entire retail success. The lion's share of brands have a hybrid approach in mixing brokers and their own sales team together across different accounts and channels.
For some of these suppliers the perception of the relationships with brokers unfortunately often fall into the “necessary evil category” or “big pain in %$#” column.
Now I’ll be the first to say, there are many outstanding brokers that do great work, however outsourcing retail sales is a beast of its own.
The reality is that your brand(s) are one of many in a large portfolio and you are no longer in direct control of your own sales force.
The result is CPG sales managers feeling loss of control, lack of visibility, and flat out helplessness in driving accountability to the outcome of sales efforts.
We have found the most successful relationships between suppliers and brokers follow these 3 key best practices:
Help Your Brokers Focus On What Matters
Many suppliers have reduced the percent of sales or budgets given to brokers – yet brokers are still expected to perform a variety of retail tasks, under this “all-in-one” fee. Inevitably brands get disappointed when a broker is falling short on some retail execution activity as the perception is that, “they are focused on selling others brands”.
The truth is, brokers work extremely hard on very thin margins. As with any business they will focus on whatever is needed in order to see profits rise. It is the responsibility of the suppliers, not the brokers, to help ensure that there is the proper incentive to focus on what matters the most and will drive results.
Key – Giving brokers additional budgets for store level retail execution and helping create better measurement and reporting on retail activity will drive the right behaviors.
Improve Visibility For Everyone
No matter if your broker gives you good and timely information on accounts or not, you must increase your own visibility on store conditions. If you think you can sit back and just manage the broker or manage from headquarters, you are missing a huge opportunity to increase your total sales.
Increasing store level knowledge through data, audits and activity metrics creates a better and more accountable conversation on both sides of the table. It also ensures you and the brokers are aligned on all the opportunities that can increase sales; and you are driving the right conversations necessary to win at the shelf.
Key – Ensure data, pictures and overall performance monitoring go beyond spot checks and you have established an ongoing and streamlined system of retail measurement.
Innovate And Win Together
We often have brands excited about one of our retail innovations, yet put up a roadblock before they even start. There is often a fear that the broker will never use a tool like Shelvspace, or will be hard to get on board. The reality is brokers want to sell more and also want to continue to cut out the “waste” and work efficiently as well. The real roadblocks are usually just a matter of positioning and perspective.
For a supplier to win, they must be cognizant to align their needs with the brokers to ensure a mutual increase in profitability and efficiency. We have several brokers using Shelvspace that have implemented extremely innovative data, reporting, crowdsourcing and overall sales management solutions that help them sell more for their clients.
Key – Ensure alternative innovation like crowdsourcing, data solutions, and opportunity analysis are a shared conversation with you broker. Not everything will be a clear path, but there are more collaboration opportunities today and you realize.
Learn more on implementing broker management best practices and reach out to our team at Shelvspace to learn more.
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