The Russian proverb made famous during the Cold War says, “trust, but verify”. Pragmatic advice that can be applied to nearly all activity and across walks of life. When it comes to managing million-dollar beverage product sales and marketing budgets, this axiom is particularly relevant. We know selling is a relationship-building game We also know that trade marketing dollars are intended to grease the skids for salespeople, helping them to increase close rates. Moving trade marketing dollars across wide territories is risky and can be difficult to track. It would be very easy for a salesperson to swing some of these funds towards a friend or relative who may not be the best prospect for increased sales volume. What solutions may exist to mitigate this type of risk?
Consider this case from April of this year wherein a wine and food retailer, owned by a top wine producer, lost nearly half a million dollars to embezzlement on the part of a single bookkeeper who was using company funds to purchase expensive meals, sports event tickets and other swag. It took nearly six years before the organization noticed the money was missing. While this was simply a case of one employee working at a retail store, the point is the same. Clearly, the owners trusted this worker but were not routinely verifying the expenses the bookkeeper was submitting. Didn’t they have the ability to audit these expenses?
When it comes to allocation of money for trade marketing promotions across regional or national markets, it can be daunting to maintain visibility. You may have dozens of salespeople requesting money to produce tastings in restaurants, displays and promotional giveaways in liquor stores, distributor incentives and many other types of promotions Is it enough to rely on the notion that each salesperson will want to optimize the use of these funds to drive sales? Is there no risk that some of the money may be less-than-efficiently allocated? The answer to both questions is no. You may trust your sales teams to act honorably and in your best interests when it comes to spending trade marketing dollars. But, if you’re not verifying how the money is being allocated and what return is being generated on the investment, you can’t be sure to keep the honest employee honest.
Cloud-based solutions like GreatVines Trade Promotion Management (TPM) module deliver standardization in the planning, budgeting, execution and measurement of trade promotion spend. These tools help verify that your trusted distributor partners are requesting reimbursement only for the promotional spending they’ve been authorized to effect. These tools verify that the most effective points of sale are rewarded with the materials they need to further increase sales. They can even help to measure and identify locations where increased spend might result in higher depletion levels. GreatVines’ TPM module even provides an easy and effective process for integrating bill backs, reconciling expenses against planned spend, ensuring highly accurate P&L reporting.
Don’t leave any trade promotion marketing spend unaccounted for. Trust your valued employees and business partners and take them at their word – but only if you can VERIFY what is being reported. And you can only verify with the proper tools in place to plan, execute, measure and refine.