How to Motivate a Retail Sales Channel

A reader writes:

I am the COO in a haircare manufacturing company. When we started out we had no budget for marketing so our sales were done by convincing the trade to stock our products. After about 3 years, we moved to number 1 in our category. The CEO doubled the price, with no change of packaging, no change of content, no marketing activities to back up the new price.
We lost all our market share. We have now re-branded and re-formulated but market acceptance has been very low. We have styled our products as "herbal-blend" but the consumer is not aware of what this means. I need ideas to convince him that we need marketing no matter how small the budget.
I also need some low budget marketing ideas because the issue for the CEO is the difficulty in measuring the success of marketing activities. He believes our sales reps are not good enough, but the issues are shelf off-take not retail purchases. Our offtake for a carton of 12 units is 3 weeks in a good outlet; our major competitor's is 3 days.

I hate to say it, but your CEO (in this case, if not on the pricing) is right on the money. Broad-based marketing is expensive and difficult to measure. Unless you're willing to spend BIG bucks, you'll get no impact whatsoever, other than a few nice meals from your advertising firm, right before they laugh at you all the way to their bank.

Your marketing should focus not on the consumer, but on the channel sales people. You need to motivate the stylists to sell your product rather than your competitor's product. In retail, motivating the channel is often difficult because the sales people are not commissioned. However, let's see what we can come up with.

I did a little research into this particular channel and discovered an important fact: stylists HATE selling products. Here's why:

• They don't want to be sales clerks. Stylists prefer to think of themselves as "being in the fashion industry." They became stylists escape having to work the counter at the local mall. They consequently consider selling to be beneath them. As one stylist put it: "I feel funny trying to sell."
• They are all about relationships. Stylists like their clients and enjoy chatting with them. They've also absorbed the common misconception that "selling" means convincing people to buy stuff they really don't need. So they don't want to sell, lest they offend their clients.
• They usually aren't compensated. Salon owners are notorious for treating stylists like crap. They almost never pay commissions on product sales that the stylists make. Instead, the salon owners just berate and bully stylists who don't "move product."
• They're completely untrained to sell. The kind of "sales training" typically given to stylists consists of teaching them to parrot "Can I interest you in some shampoo" at the end of each haircut. Pitiful and dreadful.

With all that in mind, here's how to motivate them:

STEP 1: Create a "customer service" tool for the stylists. Rather than asking the stylist to sell the product, provide the stylist with a convenient way to track the hair product needs of their customers. For example, you might provide them with a "free" (i.e. supplied by you) appointment book that has a simple tracking system so that the stylist knows when customers need a new bottle of whatever.

STEP 2: Train the stylists to provide this new "service." Emphasize that they're not selling anything, but simply providing a service to their friends and customers who need regular supplies of high quality hair products. The idea is to get customers to sign up to purchase new product based upon how much they use it. Example: I go through 1 bottle of dandruff shampoo every quarter. At my third monthly appointment, my stylist (reminded by the appointment book) would simply grab a bottle and carry it over to me when I'm paying for the haircut. It's not selling; it's making life easier for the customer.

STEP 3: Create a stylist compensation scheme. Offer prizes -- and the possibility of winning a big prize, like a trip to Cancun -- for stylists who sign up for the sales training and sign up a certain number of their customer for the "service." I suspect that your competition is doing something of the sort, because such big delta of offtake can't be explained by lost momentum alone.

STEP 4: Measure the performance of the salons. As you roll out the program, track whether it's actually increasing shelf offtake at the salons you've trained versus the ones you haven't. That should satisfy your CEO's (entirely reasonable) demand for marketing accountability. Your total marketing budget for this effort would probably be less than $50 per stylist, an amount that would probably achieve ROI within a month or two.

There are three general lessons here that are applicable to motivating any retail channel:

LESSON #1: Understand the culture of the channel. The culture at Barnes & Noble is different from the culture at Office Depot. Boutiques attract different workers, with different interests, than big chain stores. If you don't understand the culture, your marketing will be poorly targeted.

LESSON #2: Customize your channel marketing to match. The only way to create favoritism for your product set is to address what's really going on inside the channel. That usually means coming up with very specific programs to address very specific sales situations.

LESSON #3: Measure, measure, measure. As with any marketing whatsoever, channel marketing is pointless unless you measure whether it's working or not. Fail to measure and your marketing has failed.