Promotions require planning sufficient supply - The Packer

Promotions require planning sufficient supply

01/25/2013 09:36:00 AM
Denise Donohue

If supply is short, perhaps you should make that ad or mailer a regional one, at the start.

Eye on the bottom line

Once you disappoint a customer by not having the supply to back up your promotion, the losses — in reputation and dollars — can stack up.

Let’s hang some dollar losses on our bakery example.

Let’s say I decided not to drive to your bakery because you “limited” how many of a certain item you produce.

There’s too much uncertainty if I’m going to get one. You lost that sale to me (about $20) because you didn’t want extra product lying about.

In addition to that baked item, I didn’t buy any danish for the office ($5 lost). And you embarrassed me for my lack of pre-planning, so I didn’t come back for the family birthdays in November and December ($40 loss, two items).

And you didn’t get to suggest rolls, desserts and breads for my Thanksgiving and Christmas holidays ($40 loss, each holiday).

It’s very conceivable that you lost $145 of my business in 10 weeks, if I ever come back at all. But at least you didn’t waste any of that baked good!

What if, by ramping up production and making six extra of that baked item per week you sold half of them and earned three new family/customers per week (purchases described above) for 10 weeks?

You might have raked in an additional $4,350 from Halloween to New Year’s Day. Oh, yes, you might’ve “lost” $300 in unsold baked goods, too (shrink, calculated at cost).

As my former boss from Alabama would have drawled, “Boy, you need to stop steppin’ over dollah biiills to pick up diiiiimes.”

Many a family-owned business, be it a bakery or a packinghouse, has blamed a box store for their demise when, in fact, it is exactly this risk-averse behavior that turned away customers and shuttered the doors.

My take-home lesson is this: Promote your produce in every way possible in a region your supplies can support. Be stocked up when customers call even if it means a little shrink.

Successful packers — and bakers — don’t put the plan-ahead monkey on their customers’ backs, and they don’t step over dollahs to pick up dimes.

Denise Donohue is founder of Donohue Associates, DeWitt, Mich., a marketing and public relations firm specializing in agriculture. Before that, she was director of the Michigan Apple Committee, Lansing.

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