Promotions require planning sufficient supply

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

Denise Donohue, Donohue AssociatesDenise Donohue, Donohue AssociatesI popped into the fancy-schmancy bakery around Halloween to spruce up my dinner plans.

While I was picking up my dessert, I overheard the 20-year-old cashier sweetly answering the phone while leaning on the counter, revealing a dangerous amount of cleavage.

But the shocking part was what she said.

I quote: “Well, no, we don’t have any right now. You didn’t order ahead? (tut-tut sound) We are baking tomorrow morning, but we’re limiting what we’re making. I don’t know if you will be able to have one. Depends on when you get here.”

I was so shocked I almost corrected the cashier on the spot: “Tell her she’s the customer, we’ll fill her order somehow. Stay late if you have to — she wants to buy!”

But then I remembered: It weren’t my store.

Don’t sell them short

Raise your hand if you think there’s any valid reason to get customers jazzed up about your product, and then when they call with an order, you tell them supplies are limited and she will be lucky to get one.

Aha! I didn’t think I’d see any hands.

Several take-home points are relevant here. First, by not having the item the baker ...

1. Had epic failure — at least on this day — to take advantage of all the free publicity she’d earned.

2. Made the customer feel uncertain, and maybe even embarrassed she didn’t call, say, last year to place the order.

3. Encouraged the customer not to visit the bakery since the item’s availability was expressed as a crapshoot.

4. Possibly lost the phone customer for the upcoming Thanksgiving and Christmas holidays — the year’s most important sales window.

5. Possibly lost the customer for life.

Two other training points come to mind:

 

  • Are your phone people fully trained on what to say in a shortage? Will they suggest your order is a crapshoot?

  • Are your production people getting feedback from order takers? To make up an example, do production managers know that callers are asking for pre-cut veggies twice as often as the rubber-banded veggies?

 

By promoting to the hilt, our baker implied she was a top-drawer supplier who would have plenty of delicious product available. But she couldn’t deliver on that promise, damaging her reputation in the process.

Does this mean you shouldn’t promote?

Heavens no. But engage in market planning first. What if everything goes right in your promo? Will you have enough fruit/veggie/chopped salad to meet your projections? (Barring a natural disaster, of course.)

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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