Mastering Retail Trade Promotion Strategies for CPG Success

[00:00:00]hey everyone jordan with food bevy here and super excited for today's conversation here is in the space we know how challenging it is to get on the shelf but the astronomical challenge after that of actually selling off the shelf and so for that conversation today um i invited my friends yuval and chris who are with promo mash and work with founders every day to get their products moving off the shelf with some really great tips insights and um advice that you can implement in your businesses so with that i'd love to kick it off to your vol and chris to give a quick intro and then we'll jump into today's conversation all right welcome food baby my name is yuval i'm the ceo and co-founder of promomash i have uh chris who is my co-founder with me say hi chris hi chris perfect it's very predictable so chris and i are very excited to speak to a subject that's really near and dear to our hearts this topic is especially important for me because back in 2012 when my cpg brand was discontinued from our last remaining retailer and remember just a few years back we had national distribution with sprouts and whole foods etc you know i vowed at that time to never let another cpg brand make the mistakes that i made like so many brands who have a hard time getting shoppers to pick up their product off their shelf and continue to repurchase i learned crucial lessons in the process that we're going to share with you here today including some gold nuggets that we've learned from working with other brands on what works and what doesn't in this category so the topic is how to not capital fail in cpg so let's get started and with that i'll pass the baton on to my co-founder chris and barian hey everybody how are you um so really short and sweet of it is that that you know to succeed in retail you got to do a whole bunch of things right but the focus of this we'll give you a couple of tips very quickly you know just to make sure that you absolutely get out of here with some some tips for how to succeed but how to not fail requires you know what it's going to take and and really if you boil it down it's going to be one of two things you're going to run out of time or you're going around on money before you achieve critical velocity making sure that whatever it is that you're doing is sustainable either within a finance context or or not even um but if you run out of time run out of money you're dead and we don't have a discussion so that's kind of one of the things that you've all experienced and and that i've witnessed myself so um so that's it so the next the next point after that is well what are the what are the top mistakes that a brand's going to make perfect so there's an old adage that goes like this you don't know what you don't know and as a first-time founder that really was my truth for many years i think back then i would have really benefited from a coach or a mentor who could help me take off my blindfold because i was i was really blind the whole time and that was so i can fly right so in the spirit of taking off the blindfold here are some mistakes that brands make when promoting in retail now mind you that trade spend is your second largest expense on your p l i'm going to say it again because i think it's important trade spend to play in retail it's going to be your second largest expense on your p l first is your cost of goods your product so pay special attention to these okay so the first is no baseline now i'm full of quotes today so here's another one from peter drucker i think peter's chris is hero and that quote is you can't manage what you don't measure and baseline sales or movement is your barometer now why is that important well we are speaking to non-promoted sales because we need to understand that there is a target that you're trying to reach during specific promo periods and in order to understand the effectiveness of those promo periods you have to know where you're starting from and those are non-promoted sales now i get brands especially young brands asking me how do i get baseline i don't know what what i'm selling right what the movements are well you can get movement from a top retailer right sometimes you can get movement reports from whole foods or sprouts syndicated data spins iri can provide moving reports but then i have brands that really are just starting up and literally are not even in retail or just started in retail and they say i don't even have that data even if even if i can afford spins i don't even have that data so my suggestion is to them look at your competitors because spins provides data on all products in your category and i would look at some competitors and see what they're doing and that could be a good baseline to work off of or at least try to achieve the next is inaccurate lift projections what i see is sales folks are too ambitious in their projections okay i'll give you an example or just to cavalier to cavalier well it's always nice to dream big right especially founders i think founders entrepreneurs more than sales people have these big dreams of you know increased velocity and because they're giving a 20 discount but i'll give you a good example so we have a client who projected a 300 lift on their promo okay when their actual lift was actually 15 once it was said and done so what do you think happened to their trade rate they projected a 15 trade rate and guess what happened it was like 79 percent because they really screwed up on the projection so inaccurate lift projections are critical to understand okay all right next failing to understand or consider an account for all charges you know when you play in retail you all of a sudden have this vegas vegas-like blinking atm sign on your forehead right that flashes for the brokers the distributors and the retailers to request support and you have six tactics that you can play with to support your customers and for those who want to know the tactics their field marketing and merchandising price reductions tpr's brand ads customer ads displays and end caps and coupons so you got to consider all your account charges not keeping contracts and docs so the thing is this should be self-explanatory right and you will thank me when you get a post promo audit on your deductions one day but again you need to arm yourself for this battle and understanding your contracts is really key to your success okay actually i want to go back for a second on failing to understand account for all charges this is again a real life example we had a brand that just started with target and the consultant to that brand was basically telling them that a promo is going to cost him 5k right for that promo period it's a two-week period it ended up after putting it on our platform and seeing the projections it ended up costing them 5x 25k the founder was like oh my god i can't survive by doing these promos i didn't know so that's really really important anyway i just wanted to go back for a second the next is lack of granularity okay why is this important because when you're reviewing your overall p l with your team you will notice that there is a section in the expense portion for actual trade spend and if you don't have the correct granularity and i mean by customer by product by charge right then you are again flying blind with limited information see 99 of the brands that we work with were aggregating their charges when they first came to us but you know when chris and i worked with them we really opened their eyes to the reality of what deductions look like okay and there's a true story i mean there's a a brand that literally had seventy thousand dollars in spoilage for one product with one distributor and they didn't know it until we started working with them and looking at each granular deduction and when they found out they realized that one of their co-packers were sending them the distributor product that was not acceptable the distributor was just sending over deductions and chargebacks they didn't know about it so once they understood they fixed it with a co-packer and that saved them tens if not hundreds of thousands of dollars well i love that because that happened to me as well t-squares on the chargeback side because the product wasn't um moving as quickly at the retailer we finally looked at the numbers we found 30 of all the product that we sold them they were charging back to us at cost and we you know had to pay for the product and we got charged back from anything so we ended up like losing so much money from that just by not understanding the granularity thank you and and don't worry i'm going to talk about deductions in in a bit i got a lot to say so hopefully i can do it quickly uh but thank you for that uh the next step the next bullet point is negotiating ineffective with buyers so when i was a first-time founder speaking to buyers with my brokers when i was driving you know on route with them i never imagined at that time that i had any negotiating powers with sprouts or whole foods or walmart right and that was a big miss on my part see the thing is over the years though as we work with multiple brands and we really understood the industry i noticed that some of the best run brands had the ability to renegotiate some of the deals that they worked with uh under with the buyers and get added bonuses on top of their promos so how did they do it well they came prepared with numbers and a great story i think that's the key a great story when you have plan projections and they show that you're losing your ass on a specific promo while your customer is making a killing well that's a good conversation to be had with the buyer and if they can't swing the deal on the promo on the price reduction because sometimes they can't they can throw in an ad or a display end cap to increase your lift and that's the key you're trying to get as many tactics as possible to be able to increase your lead your lift and those conversations with these buyers can make an enormous impact your top line revenue right because look it's a jungle out there and it's not easy so if you guys are not vigilant about these things you're gonna have a greater chance of failure and we want you to succeed so those are the top mistakes that we see brands make chris let's reframe some trade promotions really powerful if if you want to identify what's wrong and do something different that's better you got to understand where you where you are you know in terms of the fundamental thing of like how are you viewing this thing and the usual way that we view trade promotion is pretty reactive probably subconsciously most of us are looking at and reacting you know telling our salespeople go out there make some friends kiss some babies make some deals bring me deals bring me deals and let's grow the business you're going to react then based on whatever those sales people have done if you're giving them specific direction specific tools specific information and telling them what kind of deals that you want them to bring that's gonna be a lot different than just bring us deals and we'll evaluate it they're gonna bring you a deal and say that i'm really excited we got this promotion we can do and here it is and then with lack of any other guidance you're just going to say okay let's do it um and then you end up like the founder that you've all discovered discussed earlier where she found out that the real costs were 5x and it was a bad deal for her so we propose a a different transformational way of looking at it so what is that can you uh advance people a more powerful way to look at it is kind of like a data geek as you've all mentioned understand your baseline understand the effectiveness of each tactic and lift quantitatively and then go in wielding an integrated data inform strategy you're now position of strength you're not driving the thing at least you're co-driving it co-creating it and then that allows you to go back to our first slide and manage your money so you don't run out of it you got to see where your money is i would say that the the sensation that a lot of founders seem to have is there's a hole in my bucket and i don't know where it is i don't know why so much money is leaking out and then usually someone shortly after that they discover that it's leaking out somewhere in kind of deduction land and and accounting lack of accounting fully for how much promotion is costing them so next what can we do to continuously improve that performance well uh continuously improve implies the direction you got to know where you're going and that's a balancing act for the various you know dozens of people 100 people on this call um the objective could be different there's no and and it's different over time it's not just that your company is in a different space or or category or whatever but it's when you're first starting out you know you're just interested in initial traction and then you know at various points you might be more interested in growth more interested in growing awareness of your product uh more interested in velocity or at some point eventually the thing that's going to make investors most i'm interested is are you profitable and so uh to throw a measure like roi which it's good for your investors they want to know because that's the eye in in roi isn't it but that's for them over time for you situationally managing month by month week by week day by day you need to know what your situation is and what's the best thing to be looking at so you got to choose the right objectives and so relative to the cost of doing business or you know kind of a target trade rate gut feel for this you need to be able to to measure to that and decide okay here's how much it's costing me to do business how is that compared to where i expect it to be and that's that's ultimately the litmus test that you want to apply here it's all yours thank you appreciate it so i'm gonna this is really important guys so pay attention here okay the there are four questions that i get or i received over you know many years from brands and they're more of questions on how we want to how can we succeed in a specific you know way so here here here they are okay the first question is what type of promos perform best for brands okay and the answer is demos displays and price reductions okay remember i told you there are six tactics out of the six demos displays and price reductions per perform best in store but if you want the holy grail of promo effectiveness it's really an end cap display with a yellow sticker and a brand ambassador telling your story and driving traffic to the display or shelf right nothing is going to beat that combo also consider a volume discount okay because you can also do a discount where the the shopper purchases one product they pay x but if they purchase three as an example they get a heftier discount okay so that's the first question second question is which performs the worst and i'll tell you this a tpr by itself performs the worst okay you're competing against another billion yellow stickers on the shelf and it's like you know what it's like it's like putting a cat video on youtube in 22 right it worked a decade ago when there were three cute cat videos but when every video is a freaking cute cat video it just comes off as noise right so always try to support a price reduction if you can with other tactics okay another thing to consider is slotting fees right they suck for startups they killed my company actually but it's the cost of doing business right so the retailer wants to hedge against loss but you can negotiate the number of skus given away for free so they originally started asking for six we negotiated to three because it was expensive anyway finally bogo they are horrible performance this is buy one get one but they do drive trial right but what but what you're looking for is not just to drive trial initially it's to see repeat purchase and the only way to manage that is to understand your promo plan and your accruals and match it to actuals right the next is what promo sequence is usually most effective when launching a new retailer and this is a good one so in my personal experience i would say get the product in shoppers hands directly get trial demos are king and queen here for startup brands okay they're gonna drive traffic long term and they're gonna affect purchase behavior okay in terms of tpr try to negotiate a scan versus an mcb or an oi okay and the reason is is that with a scan you're only paying for what you're purchasing or what the what the shoppers purchasing right versus your customer pre-purchasing a whole bunch of product right they're getting a great deal at a discount and then either they're returning at the end but they don't sell it which sucks or they're going to gain more margin when they sell it after the promo if you don't get enough purchase during the promo period okay so watch out for that always try to get a scan going all right how much should i budget for deductions this is a good one as well for the most part we're talking about trade rate right an industry standard for emerging brands is in the range of eight percent of the low end and i've seen some spending as much as 40 percent or more but that's only if they're if they're funded companies and they're just trying to lose their ass while they're growing velocity right but we don't recommend that approach for most brands okay the average for most brands is somewhere in the range of 15 to 20 percent okay so those are the main questions i'm happy to you know move you guys after the um the webinar uh we'll provide us a number where you can you can call me or my email address but these are the main questions that i get asked all the time okay now the next slide is our proprietary way to demo effectively for long-term trial i'm not going to go into this deeply because we don't have the time but again set up a call with me free of charge i'm not going to charge you anything and let's talk about this because this is really important this is our proprietary way of getting uh noticed so we're looking at a hook story offer where the table is your hook just like on facebook you have you know your video or tag or headline then the brand ambassador tells your story in 10 to 20 seconds sorry 10 20 seconds then there's an offer with a qr code to try to upsell the product so you can pay for the demo at the demo which is ideal right once you get their email address then that activates a an email campaign where you can tell your story further and start building the relationship and now you have their email address and you can build raving fans with value value value and driving them back to the stores and offering them coupons and all kinds of really cool things so this is the next wave of demos this is demos in the 21st century and i think if any brand that doesn't demo this way is going to lose out because demoing the costco way where you have an old lady you know gray hair blue hair old lady just sitting there and handing out samples is no way to demo your product and gain traction okay all right so those are some tips now deductions the dreaded d-word okay this is where sales and finance wake up every morning in sweats okay let me tell you we've been in business at promash since 2015 and we're offering different services and platforms to cpg brands we started with field marketing management then added trade planning and accruals right but when we started offering deduction management as a service our business completely blew up right now because we're so great i mean chris my co-founder you see him he's very good looking but that's not why deductions became the fastest growing side of the business right it's because deductions are a nightmare for emerging brands they don't have the experience nor the resources to manage them effectively okay i mean it takes around 15 minutes to download an invoice okay sorry hearing that my slack how do i mute this damn slack okay upper right hand corner your your profile uh profile just click on notifications pause notifications got it sorry sorry guys um okay so getting back to to what uh my rant here because this is a rant so i apologize i really feel strongly about this so it takes 15 minutes to download an invoice from the key portal okay then it takes another 15 minutes to enter it into your erp so no emerging brands they really don't have the luxury of in-house teams like coke or unilever right and it's a known tale in cpg that abuses occur right some might even say atrocities are played here so here's why you need to watch out for deductions okay 10 to 20 of your top line are gonna be deductions that's a major impact uncommon skill sets that's rampant in the industry with emerging brands they just don't have the necessary skills to get it done it's tedious and overwhelming as i mentioned with the downloading and entering manual transactions and getting it to the detail it's difficult to recover deductions you really have to know what you're doing to get those recovery dispute forms accepted they are rich with operational customer insights though that's why deductions are awesome okay there is one awesome aspect of deductions but if and that's a big if capital if you're the data that you're that you're managing is adequately organized and granular and when i say granular i'm talking about by customer by product by charge and most do not do that and deductions impact sales right and your negotiating position as i as i spoke to you know um uh previously so that's those are the by the way cryptic codes okay those are just horrible and sometimes you know finance and sales go back at it right finance says hey sales team can you validate this deduction and they're like oh yeah i'm really busy let me take a look at it sure it looks great and they don't even look at it right and it happens all the time they dismiss it so anyway that's my rant and deductions watch out for them they're very big and now i'm gonna hand it off to chris so i'm gonna i'm gonna give you a combination of what to watch out for and what to what to watch out for but what what in terms of going to it um so this is what i call the sweet spot um you you're always trading off that let me quick explain this this graph on the left the this basically the lifetime value of incremental margin contribution how much profit are you going to make over time and the the axis on the right is promotional aggressiveness on the right you know basically you see promotional aggressiveness equates to how hard am i promoting and that's in terms of price aggressiveness and in terms of what are the costs and fees that i'm also willing to to bear in doing that promo um the profit that's affected by of course that that net price and your cogs and then there's another variable in there growth and like i said earlier when i said balancing act you're trying to balance these things out but there's a sweet spot because you as you can kind of like see at zero promoter promotional aggressiveness you're just operating without promotion you got a certain amount of margin that's coming in as soon as you start dropping your price and adding costs but you haven't yet grown your business you're losing money and there's a certain threshold above which you got to get you got to be aggressive enough in your promotion to get attention and start driving your volume but then you got to recover that lost margin and at some point hopefully your lift comes up and starts actually contributing margin compared to where you were before that point you probably shouldn't have done it you could just keep running assuming that you're not going to get disco you're going to just keep running the way you are if you're going to promote you've got to promote hard enough that you're actually driving more incremental contribution ideally and then at some point you're going gonna peek out and if you continue to add costs and and drop your price you're starting to cut into it you get so close to cogs maybe even surpass cogs net and then you're losing money you know and so you shouldn't have done that either so there's a sweet spot in the middle and you need you need to be pretty quantitative to figure out where that spot is now chris what is the quantitative way of figuring out where that spot well i mean you know the devil's in the details isn't it but but as you can probably imagine if you've got something uh you you your operational people have a pretty good idea what cogs is right and your sales people have a pretty good idea what the price is but the the the real trick is as you've all mentioned if you've got something that is kind of this really complicated hidden 15 to 20 of your top line happening and you're not really on top of it that's probably where where the the difference is going to be made so really deductions and all the hiddenness of deduction and the unaccounted for part of it is a big reason why brands are surprised that they're not profitable and that they can't figure out how to get there and it's because that's where it's that's where the action's at the other stuff is kind of you know business 101 this is business 201 this is the graduate part of doing business in cpg why are you asking difficult questions no that's that's that's the question to ask though it really is so so to answer that let's let's advance it to you all um to answer that question how do how do you do that got to be a data geek or hire a data geek and they're going to need to be not only you know naturally a data geek but they need to be organized they need to be very situational so there has to be some business experience where am i what is our objective what is our target what is an appropriate target trade rate if you talk to the good cfo's in our industry they know where they want the trade rate to be um really really closely and uh and engage that against how the organization is performing um and then once you once you get a picture of where you are you got to be pretty disciplined about saying you know that that's a real uh uh uh what do you call it that's a a great banner to have in our our portfolio logo to have but uh you know we just can't get it to be a good deal for us and the the cost is higher than the benefit for us so you have to be disciplined about you know really cutting away uh some of the worst performing parts and continuously improve in short i say be like shoehart uh i is she wart i i have medication i i rip my co-founder who pronounced this she wore it it's shoehart and shoehart is of course the business consultant who created the shoehart cycle which or sometimes referred to as the plan do check act cycle or the deming wheel or whatever but basically this is closed loop management you're going to do something you're going to measure what you did and then you're going to make adjustments to your plan so it starts with a plan go do it but make sure you're quantitative and statistical about doing it and then feed that back in and make adjustments to your plan that's a continuous improvement usually you're going to screw things up on the first round but you want to figure out how to get better by the second certainly by the third round and that looks like a renegotiation of annual annual deals and that kind of thing so next and this is a quick um thing you mentioned data on there i dropped a link in the chat to we have a partnership with nielsen iq visor they get three free cpg data reports for your brand using that link in the chat so if you're looking for data and need free data um that's your go to right now yep great that's a great resource jordan great resource okay ready chris yeah so chris that sounds a little difficult and you know if it doesn't then you probably didn't comprehend it because it's difficult uh so but what you know why would i go through that that level of of pain and learning and growth um what's the payoff and i would i would argue that there are tremendous payoffs in every part of your organization from focusing on this accounting function of deductions and um and the first is sales when you've got a full picture of of not only what you're planning but what's actually happening and you can put numbers in in all the boxes and identify how much you're projecting to make and how much you're actually making that gives your sales people you know that orients them in the universe you can tell them hey this is what i need you to do in order to be a good steward of the company and you know rather than reacting to to a bran a retailer saying okay we got this deal this month and this is what you have to do you can go in there and negotiate something that works for you for your company um and that that you know is tremendous tremendous impact on your profit you know you can really squeeze your cogs uh with your operations people and you know maybe get make a quarter or a half a percent of difference uh you squeeze your sales people and you can make you know two three four percent relative to the top line uh and that that makes a tremendous swing in your profitability uh the next area is finance um it allows you to be more proactive and more accurately plan your cash which is one of the things they want to do and it also allows them to do a better post-mortem analysis of what what you've been up to so that they can provide some insights on that the third area that that benefits from this is ops because you're going to be able we've given a couple of i don't need to uh reiterate but we've we've given examples where you know you're looking at these postmortem sales numbers and identifying issues in operations and logistics that can cost you tremendously so you get to those faster it's you don't want to do it at the end of the year you want to be able to real time do it and then finally the sea levels what do the sea levels do one of the key areas and key responsibilities of of your sea team is to make sure that there's enough cash that you can achieve your objectives go do the things you know put in put in factories and and drive sales and marketing they need to make sure there's enough cash and the picture needs to look good enough and let me tell you there's there's no accident between investors having money and them being you know smart or dumb they know what they're doing and they know what they're looking at and when you as a brand can go to them and say hey here's this thing that's 15 or 20 percent of our top line and we're on top of it and let me show you some detail and you're feeding that into your decision process that gives them great confidence and makes them want to invest in you mission accomplished mission accomplished okay so we have a motto at what's a model so i'm just kidding we have a motto at promash and that is we don't get out of bed unless we can help brands succeed at retail right so how does promash help and i hope that this webinar provided some insight i mean i wish i knew this insight or had someone to chat with when i was running my brand right but unfortunately i did not um and now with communication and webinars and you know a whole bunch of great people on linkedin you have a support team you know on your side and i love that i love to see brands win okay because cards are stacked against us uh especially with big distributors and big retailers and and big companies that are that are out there trying to make the best decisions they can to be profitable and that's not necessarily something that that brands uh benefit from right so how can we help well we have a 360 degree approach to promotional uh effectiveness and that is promotional planning right getting your promotional plan your sales teams plan on the platform so you can understand the effectiveness of it the charges how much is it gonna cost you right the roi in real time literally with five or six fields entered you get to understand that you have that you're going to spend five times what your consultant told you you're going to spend as with the example that i uh provided earlier right so promotional planning accruals accrual management understanding of that right deduction management it's literally the fastest growing part of our business because we are the aspirin to their mo to to brands migraines okay it is a migraine deduction management is a migraine and we can help because we do the entirety the valid the digitization the validation and the dispute we go out and our team goes out into the portals grabs everything your team is freed to run your business right and then field marketing management kind of where we started in 2015 and that was managing your brand ambassadors your merchandisers your field reps out in the field scheduling training uh reporting analysis of those activities okay so i don't want to spend too much time here i just wanted to help everybody here understand how we can help now we have another resource and that is me or chris or anybody on my team that's more than willing to spend some time with you guys uh just to hear you out and answer any questions okay no need to any to do anything um on that level so my email is yuval y-u-v-a-l at promo mash p-r-o-m-o-m-a-s-h you should look up yuval selik s-e-l-i-k on linkedin and connect with me because i'm very active on linkedin and you're going to see a lot of insights there uh in a lot of posts i'm caa at promomash.com and you should not look for me on linkedin because i'd never go there because i'm not social but i will help you with your business and what what you all was just basically saying was it wasn't sales pitch um if you guys you guys are part of the community you know we're part of your community and we'd love to help you know if you want to you want to say hey i got this situation what do you recommend we're uh we're open to it so give us a call but but jordan did say i did put me in a headlock and he's like yuval you better create some special offers from my for my members here okay and i was like all right let's create some special offers for you guys so again you don't have to do it it's just out there for any food bevvy uh member the first offer is demo and train package we have a learning center proprietary learning center to help you train your brain ambassadors on how to do the demo how to speak with the with the customer base and all that great stuff which is really really important when you're doing field marketing activities we're going to give you three months of that for free that's a 750 value if you sign up with any of our demo packages okay the deduction side 30 days of free deductions guys okay you contact us and for 30 days for no charge we will digitize one month's worth of deductions for you so you can see them in granularity no strings attached no contracts you don't like it you don't do it for the most part we're pretty confident that you are going to love what you see get some great insights that's only digitization that's not validation and that's not recovered okay that's separate but if you what was that someone say some okay so yeah that's just digitization but it will give you a really great understanding of what's going on and then trade in the spreadsheets okay get out of google docs get out of you know excel we're gonna waive five thousand dollars off the onboarding and setup fee because it's a special onboarding and setup for you guys okay that we created it's 5000 value we're gonna we're gonna waive it if you subscribe to the promash tpm or the 360 plan okay again that's all i'm gonna say it's really to help you guys more than anything else so now oh it's funny i didn't even realize it was a cat and i was talking about cat videos chris i really appreciate you guys and happy you guys are sharing this really in-depth info um everyone who's listening here if you join one of our webinars before i work with people who have been in the trenches and can bring you the hard-earned insights on how to make um solve problems for your business as you've all mentioned you know he was in the trenches he did this for his business ran into these same headaches that you're running into it was like screw this i need to figure out a better way of doing this so that other brands can succeed and so you know he's the real deal in terms of making this happen so with that said um we'll send out all that info as well on the follow-up if you are interested in learning more as you've all mentioned he's happy just to get on the phone with you and talk through some of your issues to see you know if their platform will work or if something other way of doing it will work depending on where you are at your scale of your brand so with that any questions that we have from the community or um that you want to ask feel free to drop in the chat or you can come off of mute and ask i think there was a question earlier about e-commerce what we feel about e-com how we feel about e-commerce you know a lot of brands that start up start out they they go to e-commerce it's just an easier way of launching a product right you can get on amazon you can you just open up a spotify store and wait for those things to to ring on your phone which is what you know um my wife allah does all day long she gets very excited when there's a ding uh but it's it's a different animal right and it's a different cost structure and i think that you know the promos there are limited to sales in a sense so you can't really do an end cap you can't it's just a price reduction can do a demo necessarily you have some options but i would say that if you are in retail and online then i would use social media right and even demos to promote both so once you get somebody within our diagram of how to do a social selling you know demo once you get their qr code activated and you have your email address now you can send them to online retail when there's a sale you can send them over to the retail store brick and mortar when you're having an event of some sort or a demo so i would utilize the two they're really not in opposition they really should be used in synergy so that's my take on on e-commerce you all i have a question hey thank you for your very elaborate uh uh discussion here um my question is mainly about assuming you're launching we're just launching 150 stores um great great stores great you know community but on the same time having 150 locations demos it's almost impossible correct we got away with free fail i would say of course negotiations and but we do want to support them what is a good way from a buyer perspective to show him hey you know we like doing demos it's almost impossible is it worth to say okay let's do demos in 20 locations and then maybe another 20 or is it better to say okay let's do some tpr and uh because you're mentioning the the pairing of those two and i really love that yeah i would get on a call with the buyer face to face and speak with them right as a startup brand there they brought you in for a reason they brought you in because they believed in you and they want to see you succeed for the most part right so how do you succeed you tell them look i have a small budget i don't have a large budget i want to support your store let's come up with a really good strategy so i'm willing to do a few demos maybe i can afford 10 demos a month so can we hit your top stores that velocity stores 10 demos per month for three to four months and try to change it up on a weekly basis so it's not monday monday monday or friday friday friday because you're getting the same customer base you want to get different customer bases throughout the week so i would do like a monday wednesday and friday three months like one month monday one month wednesday for 10 stores so you're not putting a lot of money into it but you're showing that you're supporting the store once you're supporting the retailer they're going to be much more apt in giving you you know a circular deal or some sort of ad or a poster for a discount or free okay you should when you're doing the demos right you should try to again try to figure out a way to do a price reduction in a scan during the times that you have the demos it's not easy for small brands that's why i'm saying it's a jungle out there it's really difficult for startups i know how it is you have to be resourceful because you don't have the resources so you have to be resourceful how and usually what i say in the beginning you bring all your friends all your family ex-boyfriends ex-girlfriends i don't care bring everybody in to do demos with you for free that's what i would do you know chris does demos really well if you but if you have any anything do you want to be my ex-boyfriend trust me trust me you don't want that but you actually don't want that um so what i would add to what you've all said is you know and and this this is i think something everybody on the call can relate to you know because it is so hard and it is so expensive but the thing that's going you know this is and this applies to the e-commerce comment as well this is marketing and you the point of it is you have to stand out from all the noise because there's a lot of other people trying to get done in that space the same thing you're doing so it's really one of the measures of you succeeding is you having a great product another is that you're going to be operationally excellent but marketing is about creatively getting above that noise in a in as efficient a way as possible if you if you just take out 10 super bowl ads then you're going to get the job done you're going to drive awareness but it wasn't really cost effective right and so when you are negotiating with that buyer and you're saying hey i'm going to support the store i wouldn't be so clinical about okay i can do 10 demos per month in these many locations blah blah blah because really three times more impact will occur if if you focus on the quality of that demo or the quality of your display and you know making sure that you're coordinating the schedules because those are really going to multiply the productiveness of your your spend your dollar spent um so you've got to as a founder you've got to go get the money to to operate whether it's you know you know mortgaging your house or whatever or getting investors but then once you've done that it's not just hey how many locations it's how productive am i at that location and you know one of the things that i liked about uval's meteoric rise before the meteoric fall was that they were doing the demos themselves and that teaches you a lot it teaches you a lot about what works and how to train your your demo staff that would be one example um and and it teaches you what the important thing is which is to drive trial so ultimately end of the day our marketing job is to drive trial as cost efficiently as possible to rise above the noise as cost efficiently as possible so the one thing i heard from you um is is you know the the numbers side of what supporting a store means but really what's going to make the difference for you is measuring how effective you are as you go do those those things it's kind of like two dimensions of the and that's a great point both of those right like when you start those tin test stores it also gives you the latitude to figure out what process works because every chain is going to be different and the customers are there so if you can figure out a formula that's like as you mentioned we do demos we have a tpr we're doing scans you know i've even talked to brands about doing their own coupon programs where you know at the demo you can just have a customer like text you and you'll venmo them the cost of the product if they see a picture of the receipt you know like you can do that stuff for really cheap as well as a small company um so i think definitely do all those and then that also kind of begs the question i guess got another private message but how long should you expect until you see a return on investment from promo activity is it a week three months or a year i'll take i'll take that but before i answer that and chris can also answer i want to give out another free gift so um tal you know demoing there's no better way of learning how to demo and cost and create trial than a bearded man trying to sell skin care to ladies at whole foods okay premium skin care and i've done that for probably five years okay i i see another hand um i've done it for five years and what it teaches you is that the number one most important aspect to demoing is not selling the product especially when you start it's gaining the insight from your customers on how they feel about your product are they going to repurchase what the packaging looks like who are they and that's what we do well with pro mesh is we collect the reporting and we can analyze it right and that's what i was having a problem with because i was collecting reports in a word document or some google form back then aggregated so i didn't understand it so number one thing for demos is not just the trial part of it but the insight so i have two four five six books from dr james richardson okay every startup should there we go claire every startup should have this book you should read this book because it tells you or shows you how to ramp your velocity okay the first six people that reach out to me at juval promash.com we'll get a book mailed to them okay so the first six people y-u-v-a-l at promomash.com is going to be in the chat angela's going to put it in i'm sorry if you're this number seventh i don't have another book you can go on amazon and purchase but i have six books so i appreciate it jordan that's that was a really good question good point and the other thing that i would i would suggest you know about not only you learning what works um when you're when you're starting out and and doing it very hands-on yourself the other thing is that the store when you are effective and you gain real traction there it's kind of like they do your marketing for you that buyer is gonna is gonna support you um more when they see what's possible uh in the few stores where you really focused and you got it done right and you figured out what to do then they're going to pick the ball up and run with it after that and other than you being an anonymous you know and to answer your question how long does it take it takes a lifetime really to start seeing results it's never going to be a week you might see ups and downs and it's really a long-term strategy demos are effective when done consistently like anything else right as entrepreneurs we know that to create or birth something is daily excruciating you know work done consistently with action right and that's what you need to do you need to look at a promo and see if it works some will work some won't remember 70 of promos are not profitable in retail that's a statistic that nobody likes to hear but that's the case we prove it every single day when a brand goes on our platform puts a promo plan and is shocked i mean i've never seen so many vp sales you know with their you know hands on their forehead surprised that their promos are not affected that bogo right they were making 13 cents a case from originally 16 a case they were making 13 cents a case and they were like no the math is wrong no the math is not wrong you're giving a buy one get one offer list price of a msrp right and paying for it off of a wholesale price you're gonna pay through your you know so that's the point is you need to understand the financials and then you need to manage it over time if you're just going to look at it from a specific viewpoint you're never going to be able to win because some might be successful and some might not you're trying to find that sweet spot as chris was speaking to so that's the answer and and and the it truly is there there's an art aspect of doing this because the object the objective of you promoting hard up front is that at some point it takes off and you you reap the benefit of it it's coming in automatically and you're not paying 50 percent of your top line on on marketing and promotion because there's no business that's going to sustain that but everyone from coke on down knows that if you get them when they're young you get them early on in the process and they become a lifetime customer then that's when you're making it up so you just don't want to wake up one day five years from now and realize that you're still having to promote hard to the people that you're promoting heart to five years ago it means you're not winning and you you want to cut bait but if you can kind of demonstrate and you have to have the seed customer if you can demonstrate that you you promote to this person and then they become a loyal customer and they don't just buy when you're on bogo they they buy when you're going to make some money on this then that's a good business to be in and and you want to be when i said be disciplined earlier that's one of the things you want to be disciplined don't kid yourself you really need to to see that what i'm doing is ultimately going to to be profitable because if you don't figure it out somebody's sizing up your company for for purchase is going to and they're going to say i'm i'm not taking this deal because it's not going to be profitable for me i love that chris yeah and as you know like a lot of this stuff you have numbers flying in and if you're not measuring what's going on i guarantee you're going to be losing money because there's going to be a ton of inefficiencies baked in so you need to understand that baseline and what the promos are doing or not doing for me and i would i would i would you know partner up amongst your you know create a little three four five uh founder community that you guys bounce these things off of each other and kind of like sanity check each other and and and hold each other accountable to not kid yourselves because we need support but we also need you know that honest friend who's gonna say oh dude you know you need to look at it this way yeah i'm gonna echo chris i think the number one tip that i have for startups literally the number one tip and i'm not even talking about startups i'm talking about up to a 25 million dollar to maybe 30 million dollar brand in which case you pretty much don't know what you're dealing with or you're doing it by that time you really have to be at around 50 million and above to understand retail as effectively as you know the pros do so until you're there the best thing you can do is create a community linkedin is awesome okay connect with me on linkedin i'll connect you with anyone that you need right i have a pretty long large network i'll connect you if you need with buyers or you know other founders or whatever it is you got to build community i didn't have that in 2005. linkedin really didn't exist back then so i wasn't able to connect i was on my own so it was lonely at the top and i really believe that if you guys find the right people and even competitors they're willing to help you believe me they're willing to help you because if we don't get you know get together as a group we're never going to win against the big you know monsters out there i absolutely love that yuval and i think that's the best tip to end on so thank you so much for creating that community by the way yeah yeah that's my whole goal as well in building food bevy so you all chris thanks so much as a reminder i will be sending out the recording and a copy of the slides for everyone who's attended so keep an eye out for that if you don't receive it receive it shoot me an email and happy to forward that on to you thanks so much everyone have a great rest of your friday and have a great weekend thank you everyone have a great weekend