The 4 Phases of Business Development Need Different Strategies for Brand Growth and SurvivalThe 4 Phases of Business Development Need Different Strategies for Brand Growth and Survival https://c-suitenetwork.com/advisors/wp-content/themes/csadvisore/images/empty/thumbnail.jpg 150 150 MIchael and Bonnie Harvey https://secure.gravatar.com/avatar/dfe7dbddd973f4b41b9f0e9b47ad6323?s=96&d=mm&r=g
As your CPG brand grows and develops, it will move through 4 different stages. It’s essential to your brand’s survival to recognize the stage you’re in, and what each one requires before you get there and hit a brick wall.
Understanding what to do and what to look for in each stage well in advance can provide the tools you’ll need to get through the imminent challenges ahead. To ease these challenges, you must take steps now!
To begin, understand that CPG brand-building, unlike personal and digital product brand-building, depends on sales of your physical branded product. It must be available for sale on a constant basis. If your product is out of stock, your brand-building efforts will be damaged. This could ruin your reputation for reliability, and not to mention destroy your brand image.
You might say you’ll sell your product online and never run out of stock. But most CPG brands want to be in brick-and-mortar retailers. According to the Department of Commerce, 90% of all retail sales still come from physical stores!
Your goal should be to get into multiple chain stores. Each store pays you with one big check for one big purchase to get your brand in several stores, in front of many customers at once. Quantity purchases are the quickest way your product will get discovered, and it’s how profit will grow most efficiently. All of this requires vigilant distribution management.
Let’s take a look at each stage and discuss the challenges to your brand, and how to overcome them.
1. You’re about to launch your company or you’ve just recently launched. You’re running on your investors’ money, or your own savings.
- The Risk: Sales don’t happen fast enough. You run out of money before achieving a positive cash flow.
- Overcome: Even before launch, understand what everyone in the retail and distribution process needs from your logo, brand, label, and package design. Understand how you will gain market access—where is the low-hanging fruit sales-wise?
2. You launched! You have now secured a handful of good customers who are paying your bills.
- The Risk: All your eggs are in one basket. Any interruption now could mean the death of your brand.
- Overcome: Get more customers—quick! Even if they’re small, the combined sales could offset a sudden interruption by a larger customer. Resist any temptation to create your product for a store’s generic brand—they’ll play you off against a producer that charges a few cents less.
3. Now that you have a positive cash flow, you’re expanding into new markets. You’re gaining new customers.
- The Risk: At this point, most businesses fail. It’s easy to spread yourself too thin here. You might’ve drastically underestimated the cost of sales, and the cost of customer retention.
- Overcome: Start slow. Make small, manageable mistakes. Learn the real cost of services and sales before expansion. Develop one market at a time, and carefully. One market may cost you more than another—leave those for later. Learn only what’s needed.
4. You’ve expanded! You’re making larger sales—regularly! You’re starting to become a major player. You negotiate supply costs due to scale efficiencies.
- The Risk: Your company now has strict labor divisions with areas that specialize in many types of work. This seems more efficient, but your people are now less engaged. Sales are taken for granted. Your people become isolated and unaffected by sales. Your branded product becomes less and less relevant to the market—you’re in danger of getting knocked off by the competition, who has a more relevant product.
- Overcome: Boost customer service and sales to the very top of your business. Recognize and appreciate the crucial role they play in your brand’s success. Develop official lines of communication directly from sales to marketing and production, so they can stay ahead of any market changes, your competition, and consumer feedback.
It’s quite the rocket you’re riding! Realize and understand what each stage means to your success—be prepared in advance!
Happy Sales in 2018!