Why a Sales Plan is NOT a Strategy
The vast majority of CPG startups operate as B2B businesses. They don’t interact with their consumers. They aren’t curious about how they receive and use their products. As long as case volumes grow, they’re happy. As long as their wholesale price can float operations and their salary, they’re good.
They rely on their sales staff to grow the business by adding accounts. For them, stable velocities that retain their shelf space are a good outcome. They only worry about velocities when they’re declining and threatening access to an account.
For these kinds of brands, the ‘strategy’ is a theory behind account sequencing based purely on the company’s ability to service the account and the cost of servicing it.
I’m not saying you can’t become a $5-20M business this way, especially if you a very gifted sales negotiator with a good reputation in the conventional retail trade. You can.
But you’ll never scale the business this way.
You haven’t really got a strategy at all. Your strategy reduces competition to an account-level problem if you even focus on it at all. Without a competitive frame, you aren’t strategically managing the business at all. A competitive frame forces you to decide on a competitive position in the market tied to some audience, niche, or broad. It’s the anchoring of your thinking in the end consumer that is the key difference.
Once every decision is made at the company because it supports a strategy to delight the ideal, predisposed consumers, you have the potential of running an exponential growth brand. Skate Ramp brands draw their exponential growth rate directly from consumer enthusiasm, not from stacking accounts one after the other. However, you have to make sure you’ve co-completed the product line with your early consumers. Something is usually off. Your sales guy can’t help you figure it out in most cases, because she is NOT in touch with the end consumer.
You, the founder, and your team ALL need to focus on your end consumer, why they love your product, and make your decisions to find more of those people and keep them happy and coming back, even if it’s only twice a year.
Yesterday, I took my latest cohort of CPG founders through my Riding the Ramp strategic planning seminar. It builds on my new book, the only book that explains how you can achieve exponential growth. You need to grow fast enough to achieve scale before you get copied but not so fast that you leave no time to iterate and optimize the offering.
I’ll be taking my final cohort of founders through this material again in December. Only 20 spots. You’re welcome to reserve your spot now!