3 Tips to Lower Your Promotion Costs- Partnering With Your Food & Beverage Suppliers

 “Partnering has proven itself one of the most powerful business tools for dealing with fast changing markets, technologies and customers.
As the global economy speeds up, partnering is becoming the weapon of choice for today’s successful competitors.”

Curtis E. Sahakian

Creating Strategic Partnerships isn’t just for the purpose of working with other businesses to add to your Prospect and Customer List, it is also about gaining a competitive advantage through adding value to your new and existing customers by offering exclusive access to product and service offers, but sharing the value delivery with your new partners.
Having worked in and around the hospitality industry for 15 years, 8 years working in the liquor industry combined with Diageo and Premium Wine Brands, I’d like to take this time to encourage you to look at your supplier relationships as partnership opportunities rather than just a transactional sales process.
 With the Coterie program, we have adopted this new approach for the mere fact that there are just so many untapped opportunities right under the noses in hospitality – where we can start pulling together – creating activities that deliver higher impact within hospitality businesses – customers spending more money – and both hospitality businesses and suppliers driving more sales equally.
So why don’t we operate like this?  Perhaps it is a case of “you don’t know what you don’t know”?  There is a bit of laziness from suppliers working in the On-Premise, from time to time – I’ve seen it for years – but it doesn’t have to be like that.  Suppliers need to get on board and work with you as a business advisor, not a sales person.  And hospitality businesses, it is absolutely advantageous to start to acquire the business knowledge of development and negotiation, and run your program planning regularly and 3-6 months in advance.
Three KEY areas for partnering with your suppliers:


1. Promotion Calendar

In order to run an efficient business you must be planning your customer activity calendar 3-6 months in advance.  Once you map out your ‘game plan’ this allows you to streamline ‘who does what’, set reminders plus start to communicate with your customers in advance.

And the great advantage when you plan in advance, you can start to go and talk to your suppliers ‘in advance’ negotiating better pricing, advertising and promotion support, and give both teams an opportunity to integrate each others calendars for optimal results.  You start to eradicate the supplier ‘one size fits all’ offers, no room to move but you need something so you take what you can get – confound – and start to set some goals ‘together’ which makes both parties accountable to ‘get the results’.

By mapping out your calendars, it not only gives you and your team a vision of where you are wanting to go, but it puts you in a position of power.  What do suppliers ultimately need?  Stock bought and stock sold.  When you have key activities that support their KPI’s, you will be surprised how many companies will want to come on board.  But have a little shop around.  You need to ensure (just like any partnership) that you are partnering with suppliers that have ‘your’ objectives in ‘their’ picture and they are genuinely there to walk the journey with you and support you.
  1. Identify your key brands – there’s no point partnering with a supplier who has brands your customers are not interested in
  2. Identify your suppliers that work with you, not ‘sell’ to you
  3. Have meetings with your suppliers and show them your calendar – let the suppliers start to bid for your business.  You’ll learn soon enough who is there to help.
         KEY NOTE This is a partnership strategy so be sure not to go in and dictate and drive aggressive requests either

2. Events

Events are a great way to get volume sales and wider audience customer awareness and engagement.  One thing that I loathed when working in the liquor industry, venue’s putting in requests:

 “Will you sponsor our event with X amount of stock?  We’ll put your logo on the flyer”  …………………….
Heard that before?  Said that before?  What is absolutely imperative is you start to learn – understand – and negotiate from an angle of how both parties will sell the most product and make the most profit.  Yes, BOTH of you!  When you can start to break these down, your support offering (I can ABSOLUTELY GUARANTEE) will become greater.  If suppliers can see that you are going to drive them sales, not just put logo up on a flyer, they will spend and invest.
  1. Offer suppliers exclusive brand representation
    1. Logo’s
    2. Editorial write up
  2. Open up other channels for product promotion during the advertising period for the event – this is only going to drive more sales for your business too
    1. For example – Feature wine
      1. Back bar displays
      2. Social Media Adverstising – price point, product story, website and Facebook banner images
      3. Table/Menu talkers
  3. Run a feature campaign on your social media “In Partnership with X brand, we are running a promotion for the month of July for the launch of our X event”.By advertising you have a ‘partnership’ you not only leverage off another brand, it gives your business credibility and communicates that you are a serious business working to create exciting activity for your customers.
  4. Discuss with your suppliers how they too could advertise your event back into their community promoting your event and their business activity.
3. Campaigns
SP blog-cheers and beersImage cred: Coterie Australia
 When I was working for Scoopon Advertising – Online Daily Deals – I adopted this way of doing business.  Again, this is a great opportunity to negotiate with your suppliers because it drives a better test and measure approach.
Back in the day of my Key Account Management at Premium Wine Brands, setting up Wine Of The Month in On-Premise, it was all about ‘get a promotion slot and then you have to give stock up front’.  Unfortunately, at times, it was only the stock up front that was sold, this resulting in no profit for the suppliers.  Suppliers are going to become very disillusioned and stop putting their hands in their pocket if it’s not working for them.
No matter what, advertising costs money and you must keep your suppliers understanding this when they are doing their numbers with you.  But when you can package up your campaigns that show that they will receive sales on the front end – goodbye ‘shot in the dark’ offer.
Let’s take a look at a campaign example:
Meal Experience for TWO
x2 Appetizers
x2 Main Meals
x2 desserts
x1 bottle of X wine
PLUS a $5 return voucher for your next (X bottle) of wine
$69 valued at $135 
Key Notes
  • Suppliers get exclusive product advertising and product sales
  • There is a return voucher – specifically for the brand used in your campaign – so you know that you will be driving more sales for your suppliers once the campaign has finished
  • Promote the wine across other channels
  • By educating your customers on knowing ‘what they are drinking’ is key to build ongoing sales and brand loyalty – YOUR TEAM is an extra educational sales arm to a suppliers brand and business.
  • Redeeming campaign vouchers allows you to record exactly how many bottles were sold – this gives you an effective test and measure strategy for future promotions
By adopting this methodology – measurement scheme – your business is in a position to quantify, forecast, and negotiate either stock up front or advertising dollars for your campaigns.  However; it is much more cost effective for suppliers to utilise stock for advertising support and therefore leverage this to absorb costs and turn them into Return On Investments for both of you.
Strategic Partnerships is the money maker in business.  It not only reduces your outgoing costs, gives you access to a wider market with more interesting value offerings …………….. it really does make business more interesting and fun!
Trying to find other businesses can take a while to build the rapport, but as I always like to say …………….. “Go for the low hanging fruit first!”
Your suppliers are already there, so start to work together because they too have Key Performance Indicators to achieve.  Think of it this way ….. “How can I make my Sales Representative look good?”, and from there start building together.
But SHOP AROUND!!! No supplier deserves your business if they are not going to be there to help you ‘grow’ yours.
SP-2Image cred: blogasiainfo



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