$3M per % of ACV – The Benchmark of Benchmarks
Say what? Where did I get this number? This is the metric that dozens and dozens of now-famous Skate Ramp brands met as they crossed the $100M trailing POS revenue threshold. This is an infrequent level of revenue efficiency for an early-stage brand. It’s an elite crowd for sure. But it has happened too many times to be mere chance. And it isn’t. Bringing in this much revenue per point of average annual ACV requires a) a strong innovation tied to a mass-market outcome, b) a disciplined founder and sales team focused on optimal zip codes first, then optimal banners, and c) extensive time (and money) spent out-of-store to drive brand awareness. The underlying key is a strong understanding of your optimal target audience(s) to drive price-insensitive, repeat purchasing.
It’s unnecessary to spend a fortune on field marketing either to hit this benchmark, but I wouldn’t assume you can ride a SkinnyPop wave of enthusiasm either. That was an impressive, but probably anomalous, a feat of gargantuan visual merchandising. You will need to spend lots of time and money out-of-store to seed word-of-mouth, hand out samples, etc. This can be done for much less than national TV ad campaigns (which start at $3M+ these days).
But the real key is to make sure that you are adding doors with a high density of your ideal audience, not 4,000 Walmart Supercenters, which, no matter what you’re selling, can’t match the door-by-door revenue-creating efficiency of a well-chosen supermarket chain for premium-priced CPG brands. In turn, this requires an approach to sales that is extremely selective and strategic, more so as you grow and garner more and more attention and interest among the retail trade.
Print this metric on your office wall and stare at it each morning. You may not hit it, but committing to it early on will force you to build a smarter plan and to engage in a tougher self-diagnosis each year…around this time!
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