As a sales team of one for an early-stage consumer packaged goods manufacturer, you’re probably used to being scrappy and resourceful. Setting quarterly goals for your sales volume, engaging in partnerships with retail owners, as well as negotiating deals for trade promotion are all in a day’s work.
Unfortunately, as your brand continues to scale, you will soon realize that flying solo as a sales rockstar isn’t sustainable for long-term growth. You need to build a capable team and have the right processes in place to replicate success at scale.
That means conducting regular market research, developing an outreach strategy focused on retail partnerships, and monitoring and optimizing your sales process as you move forward. Worry not, though. There’s a very straightforward framework that you can follow to develop a sales roadmap for your CPG brand. Here’s how it works.
Thinking Strategically About CPG Sales
Right now, your sales strategy is likely a collection of proven tactics that you have acquired over time as you experimented with different ways to promote your product and brand. That could be everything from direct-response campaigns to e-commerce platforms to retail partnerships.
However, tactics aren’t the same as a strategy. What you need is a proven process to help your sales team get from Point A to Point B, tackling everything from market research to product placement to sales analytics. Here’s a step-by-step overview of how that works:
- Product Development: The first step in the process is product development. Consumer goods companies need to develop products that are in demand and meet the needs of consumers. This involves conducting market research, identifying trends, and developing products that are innovative and competitive.
- Sales Pitch: Once the product is developed, CPG manufacturers need to pitch their product to retailers. This involves creating a sales pitch that highlights the product's benefits and unique features. Manufacturers may also offer promotional deals or discounts to entice retailers to carry their products.
- Negotiation: Once a retailer is interested in carrying a product, the CPG manufacturer and retailer will negotiate the terms of the agreement. This includes determining the price of the product, the quantity of the product to be ordered, and the delivery schedule.
- Distribution: After the agreement is made, the CPG manufacturer will distribute the product to the retailer's distribution center or directly to the store. This involves managing logistics like transportation and inventory.
- Sales and Promotion: Finally, the CPG manufacturer will work with the retailer to promote the product and drive sales. This may involve creating point-of-sale displays, offering deals or discounts, developing in-store promotions, or advertising through various media channels.
Step 1: Product Development
Sales teams are the first point of contact for consumers and serve as an essential part of the ongoing product development process for CPG. Here are a few ways your team can contribute to product development by identifying market needs, collecting feedback from customers, and providing ongoing sales support.
- Sales teams can collaborate directly with product managers to provide feedback on unmet needs and market gaps — thus helping to generate product ideas.
- Your department can also conduct market research to gather information about consumer trends, competitor products, and market opportunities.
- Sales can provide feedback on product prototypes and early versions. They can test the product with customers, gather feedback, and provide ideas for improvement.
- Sales leaders play a crucial role in determining a product’s pricing strategy and deciding on promotional tactics in collaboration with the marketing department.
Step 2: Sales Outreach
CPG sales outreach consists of reaching out to retailers and distributors and hitting them with a pitch for potential partnerships. Retail partnerships help CPG brands secure product placement, improving their market visibility and generating more consumer demand.
Generating partnerships with retailers and distributors is a long-term process with several steps, but it usually follows the same framework:
- Identifying Prospects: The first step is to identify potential retailers and distributors who may be interested in carrying the product to market. This may require researching the market, attending trade shows, and networking with industry contacts to identify prospects.
- Creating a Sales Pitch: Once prospects have been identified, the sales team will create a pitch deck that highlights the unique features and benefits of the product. This may involve creating a presentation, developing marketing collateral, or demonstrating the product in action.
- Making Contact: The sales team will then reach out to the prospect and make contact. This may include cold calling, sending an email, or scheduling a direct meeting. The goal is to establish a relationship with the prospect and generate interest in the product.
- Presenting the Product: Once contact has been made, the sales team will present the product to the prospect on a one-on-one basis. This may involve a face-to-face meeting, a video call, or sending product samples for an in-person review. The goal is to demonstrate how the product meets the prospect's needs and can help drive sales.
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Step 3: Negotiation
Negotiations between in-house sales teams and retail outlets fall under the purview of trade promotion management. This is where the brand and the retailer determine the terms of their agreement, including the product price, the quantity to be ordered, and the delivery schedule.
The brand may also provide promotional support, such as providing in-store displays or running advertising campaigns to help drive sales. Retailers, on the other hand, can provide valuable insights into consumer behavior and market trends, which can help brands develop products that are better suited to consumer needs.
When all is said and done, retailers and distributors pay the brand for the number of products they ordered, minus the cost of any promotional support they provide to the brand in the form of preferential displays, demonstrations with consumers, and discounted pricing. These expenses are called trade deductions and they must always be borne by the brand, not the retailer.
Did you know? Vividly is a trade promotion management platform that helps CPG companies benefit from more effective trade spend, through workflow automation and best practices based on historical data. See how leading brands are leveraging Vividly to improve trade promotion ROI and improve their bottom line.
Step 4: Distribution
While the sales team may not control this process, your input is still very important to the way products are distributed through retailers to end consumers. Here are a few ways sales teams contribute to product distribution in the CPG industry:
- Managing Inventory Levels: Sales teams are responsible for managing inventory levels to ensure that retailers have enough products on hand to meet demand. This may involve working with distributors to monitor inventory, forecasting demand based on market trends, and adjusting production to ensure that the right quantity is available.
- Coordinating Delivery: Sales teams work with distributors to coordinate the delivery of products to retailers. This may involve scheduling delivery times, managing transportation logistics, and ensuring that products are delivered in good condition.
- Managing Promotions: Sales teams are responsible for managing promotions and marketing campaigns that help to drive sales. This may involve coordinating in-store displays, creating promotional materials, and working with retailers to develop marketing strategies that align with their specific needs.
- Providing Sales Support: Sales teams provide support to retailers to help them sell more products. This may involve providing training on product features and benefits, offering marketing advice, and providing customer support to retailers and consumers.
Step 5: Sales and Promotion
The last step in the CPG sales cycle involves coordinating with retailers and distributors to get the product in front of end consumers. Contrary to the popular approach, however, the goal should always be to work together with retailers and distributors rather than try to outdo them in trade negotiations. Here are a few best practices to keep in mind:
- Understand the Retailer's Needs: Sales teams should take the time to understand the retailer's needs, including their target audience, product mix, and marketing goals. This will help the sales team to develop a tailored approach that aligns with the retailer's specific circumstances.
- Develop Joint Business Plans: CPG brands should work with retailers to develop joint business plans that outline specific goals and objectives, as well as the strategies and tactics that will be used to achieve them. This can help to ensure that both parties are aligned and working towards the same goals.
- Collaborate on Product Marketing: CPG companies should work with retailers to develop and execute marketing strategies that help drive sales, such as in-store promotions, social media campaigns, or email marketing campaigns.
- Share Sales Data and Insights: Sales teams should collaborate on data and insights with retailers to better understand the market and identify opportunities for growth. This can help build trust and foster a sense of partnership between the brand and the retailer.
- Continuously Monitor Performance: CPG companies should continuously monitor sales performance and adjust their strategies as needed to ensure they meet their goals. This may involve tracking inventory levels, analyzing market trends, and monitoring sales data to identify areas where the brand can improve and grow.
How Vividly’s Trade Promotion Management Software Helps You Develop a Better CPG Sales Strategy
Vividly’s trade spend management platform helps consumer goods, or CPG companies, turn their trade spend into a trade investment. Instead of clunky Excel spreadsheets, Vividly offers sales teams seamless promotion planning, trade spend optimization, real-time forecasting, and an end-to-end deduction management process.
We've helped leading CPG brands like Perfect Snacks, Quinn, and Liquid Death save up to 90% in deduction processing and 21% in planning accuracy. Want to learn more about what Vividly can do for your sales team? Schedule a free demo today!