104: Foodservice marketing math, brokers, and your cell phone

EPISODE 104

By DSR Dave Miesse and Bill Hornung
Co-hosts, DSR Live

Ladies and gentlemen... start your calculators! Oh, and open up the contact list on your cell phone (you'll need this later).

Let's do a little math on the realistic world of building a personal relationship between your brand and independent foodservice operators.

But first this qualifier: Before any of this will make sense, you must first believe that operators depend heavily on sales pros like brokers and DSRs to help them decide which brand to buy (versus ads, promotions or other tactics). In other words, a significant part of your brand image is tied up in the relationship between the sales person and operator. Thus, you have to believe that helping create that relationship is a key marketing responsibility.

Click here if you DON'T believe that fostering a "tribe of committed followers" is part of marketing's role (especially in the relationship-based world of foodservice).

Still with us? Well, then, consider this math:

There are about 450,000 independent operators out there... give or take a few thousand depending on how much stimulus money is ultimately doled out!
Maybe (if you're a really large company) you have 500 broker/corporate sales reps on the street to bang the drum.
Doing the math... this means each broker rep, on average, has 900 operator prospects in their territory.
Working 365 days per year, that means each broker rep must reach 2.5 prospects-per-day during the year. Of course, the expectation is the rep will build a meaningful relationship so these operators will trust them enough to start buying. But we know how time consuming relationship-building is... just ask your local teenager! Relationships don't happen with the occasional phone call or visit (we hope you pay brokers overtime... they have their work cut out for them!).

Obviously, the scenario above is an absurd notion (nor is it a smart one). Filtering out the realistic prospects from the masses is what brokers do really well thanks to their local market knowledge.

So, let's say they filter out 80 percent of the market... that leaves 120 prospects/customers per broker rep. Even still... do you really think the average broker rep is the trusted adviser to 120 customers?

Here's where your cell phone comes in. How many business-related "trusted advisers" do you have in your cell phone [we'll pause while you look]. These are folks you can call at a moment's notice and they'll answer your call because of your long-standing, trusted relationship.

We bet it's maybe a handful... or fewer! Talk to DSRs or operators and they are no different when it comes to having broker phone numbers on their cell phone list.

The situation has nothing to do with brokers... it's just human nature! We all have lots of acquaintances... but very few trusted friends.

So the trick is how to expand the number of brand ambassadors out there for you. Those go-to people who can be found listed in the cell phones of many DSRs, operators, buyers and other "influencers" who drive sales every day?

Well, again, you have to believe in the numbers game to have a breakthrough:

There are roughly 10 DSRs for every broker rep.
We're assuming ALL of your broker reps are working a minimum of 100 percent on your behalf (clearly not possible, but let's pretend). So, you're either forever tied to the physical time constraints of time those broker reps have... or you start making adjustments to YOUR expectations about broker responsibilities. Should they do more food shows and operator calls? Or do you incent them more when they empower more people (like DSRs) to become brand ambassadors so your reach expands exponentially.
You effectively double your sales potential IF you focus more resources on building true loyalty with even just one more DSR per broker rep. And the average DSR services 30 operators, so you're not gaining one DSR name in the cell phone list. You're gaining however many operators have the DSR's number in their respective cell phones!
The cost to build loyalty among DSRs is literally pennies on the dollar compared to loyalty building among operators themselves. You can realistically target a few hundred DSRs and have a huge impact on sales. Trying to target even a few hundred operators (out of 450,000) is a VERY EXPENSIVE shot in the dark.

The bottom line: from a marketing perspective, who is your true customer? Operators? Or people who sell to operators? There are great arguments that both are equally important. You need pull through from operators believing in your brand... but often that "belief" comes from a trusted adviser.

Many brokers tell us they don't feel it's their role to train or mentor DSRs (NOTE: we said "many"... not "all"). Some tell us their time is better spent on other tactics (food shows, operator sales calls, promotions, talking to buyers)... and we respect this as a legitimate go-to-market strategy. In fact, all of these tasks are critical!

However, the brands and brokers who adjust priorities even slightly to foster a larger, smarter and more loyal sales force will ultimately have the best chance at getting their "brand ambassadors" on the all-important cell phone list.

Click below to listen to this week's DSR Insight's podcast. DSR Dave Miesse and Bill Hornung yak about how broker regionalization does (or doesn't) impact this situation.

P.S. Feel free to put our number in your cell phone... (614) 402-0228. Call us if you're considering how to get a DSR loyalty program going.

Update on last week's DSR Insights about coupons and rebates:

Two companies proudly announced last week that coupon redemption has "skyrocketed" in the past year thanks to the recession. By "skyrocketing"... Valassis proclaimed that slightly more than a 1% of the coupons they distributed were redeemed. Inmar reported less than a 1% redemption rate. Wow, sign us up... only a 99-percent failure rate!

Of course, this is the consumer market. Redemption for rebates and coupons in the B2B world of foodservice is probably higher (although we haven't found any reliable statistics). We'd love to hear from you about the results you're having with your rebate program.