On the shelf with the right customer perspective
Who is your customer?
Author: Oliver Merckens
Tell me, do you know your customers? Do you think you understand their needs? Important questions that manufacturers should answer with “yes”.
In “What makes food retailers tick?” I already pointed out how important it is to get to know retailers and their habits. Today I would like to take a closer look at a crucial aspect for food producers, namely the question: who is actually my customer?
In this blog post on the right customer perspective, which originally appeared in FoodHub NRW, I help you gain a better understanding of your customers.
WHAT DOES MY CUSTOMER NEED?
Many manufacturers are intensively engaged in market research. Basically, this is an important component in order to grasp what is happening in the market and to better understand consumers. A lot of time and energy is invested here, but in my view, many manufacturers pay too little attention to their direct customer, namely the trade.
What good is the best market research if access to consumers is denied. After all, the buyer has to “taste” the product before it reaches his shelves. “How do I manage that?”, I am often asked.
I have selected a few examples (change of perspective, supply chain, time & presentation) from my own experience to prepare you for your conversations.
THE RIGHT CUSTOMER PERSPECTIVE MAKES THE DIFFERENCE
If you are new to working with retailers, a change of perspective can be very helpful to get started. Imagine you are sitting on the shoulder of the buyer (classic method in coaching) and your counterpart wants to sell you something. You will quickly realise what convinces you and what does not. This will give you the first clues to check your points of view and optimise your own arguments. By the way: every retailer is different
WHAT DOES THE BUYER LOOK FOR?
It goes without saying that all points concerning the supply chain (including delivery free warehouse, minimum order quantity, lead time or punctuality of delivery) should be calculated, prepared and guaranteed. What does this mean in concrete terms? While you charge the customer (B2C) delivery costs from your own online shop, delivery to the retailer – whether market or central warehouse – is always free. It is irrelevant whether you deliver a box or a full truck.
The minimum order quantity is relevant for buyers because they want to minimise their own risk (not being able to sell products) or reduce capital commitment. No trader will fill up his warehouse, especially not with products that are new on the market. Calculate in advance the delivery quantities that you need and that are reasonable for your customer.
When you are ready, the production and logistics processes should be in place, because retailers expect reliability! When an order is placed, the goods must be delivered within the contractually agreed period (lead time). In addition, there are clearly defined delivery windows. Central warehouses are synchronised and there is no room for manoeuvre. If the delivery does not arrive at the advised time, your slot is gone. Consequence: no delivery, reduced stock in the warehouse, no deliveries to the stores, empty shelves, no turnover and you can imagine the rest…
How do I get on the shelf?
THE BASIC RULE IS…
Grocery retailing is a complex machine that runs through and waits for no one. If you want to be in the game, you have to follow certain rules and bring the solution to various challenges. And don’t think that a retailer will make an exception for you because you offer such a great product. The shelves are full and the retailer has managed so far without you. Harsh words, but there it is.
TIME IS MONEY!
When presenting your ideas, it is important to keep an eye on the time. Because time is scarce for every buyer. Purchasing managers have to deal with a large number of suppliers every day who want to market their assortment and present their “innovations”. Remember here, too, that from your customer’s point of view you are only one of many.
Manufacturers’ documents are regularly too long (50 pages plus). Often far too much information is packed in. Information that is of no interest to the buyer. Here, too, “less is more”. How often has the presentation of one’s own topics been cut short prematurely because the time was “up”. The most convincing arguments are of no use if you don’t have the opportunity to present them.
WHAT IS YOUR MESSAGE?
From my experience, presentations often do not speak the language of the buyer. While manufacturers talk in terms of tonnes (coming from production), the relevant figure in the trade is turnover. If you don’t understand or can’t comprehend the figures, you won’t trust them and won’t make a decision (at best against them). Make the effort and “translate” your figures so that both sides can develop a common understanding as a basis for a goal-oriented discussion.
Furthermore, key account managers often take over the “colourful pictures” from the marketing department in presentations, in which the trader does not find himself at all. Especially if the manufacturer’s next marketing campaign (and the associated budgets) has no added value from the retailer’s point of view. For example, what does the brick-and-mortar retailer gain from a social media campaign if it doesn’t bring him any new customers? That is wasted time.
I hope that I was able to give you some impulses for dealing with your customers. The right customer perspective is crucial.
Basically, the more convincing the product, the fewer additional arguments you need.
- Make it easy for your customer
- Put yourself in the customer’s shoes and offer solutions.
- Make sure that the customer can have “fun” with your product.
It is worthwhile to inform yourself in advance so that you choose the best approach and have the right arguments on your side. Take a look at my checklist for listing talks. As the saying goes: “The worm must taste good to the fish, not the angler.