Many of the frustrations felt by wine reps and wineries are caused by a lack of wearing the shoe on the other foot – putting oneself into the place of the customer and understanding what their real (and perceived) needs are. As we should all understand, the most solid relationships are built around trust, however trust is hard to build if you do not show that you ‘get’ the trials and tribulations the other side is facing. So lets put ourselves in the shoes of an independent retailer who sells a bit of wine and is a good example of an ‘average’ retail customer:
‘My banner group has a core range, mainly products from the big boys which aren’t necessarily suited to my shop but since they pay the dollars, they get the core ranging and regular promotional placements. I’ve complained in the past but to be a member of the banner group I need to just grin and bear it. Due to the large number of core ranged products I don’t have too much space for other products, so I make sure the other wines I do stock offer my customers a point of difference; some are local favorites, some offer crack a jack value, others just offer me massive gross profit.
As the promotional schedule is done by the banner group, I don’t have any direct say in which products are promoted (basically whichever supplier stumps up the cash gets the gig), but I still run a few in store specials. I guess my problem is that I don’t want my customers just walking out the door with specials because I don’t make as much GP (and the banner group promotions often give me low GP), so if I’m going to do an in store special it really needs to let me take in my normal GP while still offering a discounted price to the customer. Reps get annoyed that I won’t lower my GP expectations when they are giving me a good deal but I’ve got a business to run and need to make good GP just to survive.
Each day I have reps show me new products and ‘must have’ wines which I’ve no choice but to turn down. Firstly I just haven’t the room for new products, basically one product has to go for another to come in; secondly I need to manage my stock on hand – stock that I’ve paid for and that’s sitting and waiting to be bought. Thirdly, over the years I have learned what my customers will buy and in many cases, although new wines that I am offered would suit my customers well, there are already several other wines that satisfy their needs. I know that I have enough wine brands and styles to satisfy 99% of my customers, I’m not particularly bothered if its wine X, Y or Z they walk out with, so long as they walk out with something. What’s the use of me stocking three more wines to compete with wine X, if wine X already makes my customers happy?
Sometimes, especially around tax time and BASS, I do struggle to pay all my bills on time. I’ll always make sure my wide range wholesaler and breweries are paid first as without their products the shop would need to close. This does mean that some of the wine distributors need to wait for payment, the good ones understand that life isn’t always easy and that I do what I can – its generally the reps who look after me the most that get paid quickest, and the ones who race in for a quick sale or just to pick up a cheque that get paid last. If someone’s account department constantly hassles me and calls when I’m busy I’ll just make sure to buy less from them so there’ll be no money for them to chase next time.
I do have some problems with old wines and ask that reps take back or replace wines that don’t sell – if suppliers choose not to support me with this I tend to be less interested to to business with them, after all if they sell me a wine that won’t pull through its their responsibility to do something about it. I don’t want to have a bargain bin full of wines I make no money on.
The chains and their discounting do make my life hard because customers are constantly telling me that they could save money by shopping elsewhere. I understand that I am effectively a convenience store, I certainly don’t do many full case sales anymore because people tend to head to big box for them. Unfortunately many of the wines that sell well here are often discounted in the chains, sometimes priced as much as $5 a bottle less than me. That $5 is my profit margin but most of the time people just think that I’m ripping them off so it makes me look bad. Those wineries who support the chains with big discounts and large ads don’t get any love from me and I make sure I call the rep if I see a price that’s below my buy price. I wouldn’t stock many of those wines if they weren’t in the core range or if my customers didn’t keep asking for them.’
Phew! Any rep will be able to relate to the above statements, having heard similar on countless occasions in the past. Whilst we may not agree with what our retail customers say we still need to understand their motivations in order to find a way to amicably get around potential speed bumps. In many respects, reps will need to swallow their pride and their words in order to foster successful business relationships; understanding a customer’s take on a situation and the reasons for it gives the rep the advantage, even if his own opinions are polar opposite. Remember – you can’t change their point of view but you can understand where it comes from.