The Venue Farming Framework: A Straightforward System to Sustain Demand by Grouping Customers into 4 Types (2 Winners ✅ + 2 Losers ❌)
Why a Regular Venue That Sells Your Brand Beats a Cool One That Doesn’t
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Dear Bottom-up Drinks Builder,
Today's issue follows up on a previous one in which I discussed the importance of using outlet segmentation to hunt new customers. Today, I'll dive deep into using such segmentation to farm existing clients. Lately, I’ve updated my terminology,y and I interchangeably refer to:
Hunting = Converting Demand
Farming =Sustaining Demand
Here you can read my previous articles about hunting aka converting demand:
Chris Maffeo
Chris Maffeo
Unfortunately, many brands I see daily lack a straightforward system to prioritize where to focus their effort on existing customers. They go in all directions, being pulled left and right by sales and marketing teams without a clear action plan.
They have a segmentation on a PowerPoint deck but don't implement it.
Image-based segmentations are useful for hunting new customers (driving distribution aka converting demand).
Volume-based segmentations are better for farming (developing rate of sale of velocity aka sustaining demand).
All companies have strategy decks. What brands miss are execution decks, which are action plans that give directions to the team and help them live by them.
“Let him, who’s without sin, cast the first stone”. I’m the first one to plead guilty.
I've always been against prioritizing outlets based on volume. I used to be a purist of premium brand building, and image played the main role until I became a Country Manager and started managing a P&L. That was the moment of truth almost a decade ago.
All my old talks about brand buildings still felt great, but I started seeing things differently. I needed to fund the journey, as I was working with tiny budgets (yes, this is a misconception; not always big brands have big budgets).
I started thinking: What's the point of being listed in a fancy venue if there are hardly any sales there? People may see it, but nobody will order it if it is unrelated to the occasion. There is no point in trying to harvest those outlets.
I'd rather spend time at a more average bar selling a lot than a cool bar that doesn't.
If they don't try to "get your bottle out there," they will not be interested. For this reason, I decided to add another dimension to segmentation.
Chris Maffeo
It's not about cool or regular outlets. It's about who's putting an effort to sell it out.
This thinking led me to prioritize outlets in a way that was friendly to my resources and P&L. A simple way to understand which ones to focus on is to create a simple matrix like the one below.
Cluster the outlets in 4 quadrants based on premium-ness and sell-out. NB, if you lack data, ask your clients and then work with estimates confronting data from wholesalers with data your clients give you.
#1. ❌ Top-left quadrant: The useless beauties (The cool ones that don't want you)
They are the ones that might be some of the coolest places in town. When thinking about them, you are not objective because it is your dream to tell friends and investors that your brand is there. But they don't do anything to your brand. It is usually for two main reasons:
- your brand's core occasion doesn't fit with their bar's one
- it does fit, but they care about a competitor's brand more
Stop trying to make an impact there. If your bottle is there, be happy until it lasts but don't have high expectations. I don't want to be negative but these are often the types of bars that in their nature always want to show something new. For this reason, they are trying your product (maybe you know them) but at some point, they will need to put another one in as the space on the back bar is limited.
#2. ❌ Bottom-left quadrant: The waste of time (Regular ones that don't want you)
These are very straightforward. They have probably bought a bottle once. It didn't move for any reason. It could be too expensive to sell in a cocktail or it may not resonate with their clientele. Not much to do there. Of course, you could try to increase the rotation but your resources and people are limited. Skip them.
#3. ✅ Top-right quadrant: The top priority (The cool ones that sell a lot)
These are also clear. They are not only the best ones in town but also the best ones for your brand. There is a precise match between the target occasion and the proposition. You are probably a great match, and you should try to make the most of it. Whatever happens, don't lose them. Protect the volume from the competition (as they might start to notice you). Evolve the relationship with them.
#4. ✅ Bottom-right quadrant: The hidden gems (The ones who pay your bills)
These are the ones the old myself didn't care about. Yes, until I realized how precious they are. They are the ones that pretentiously sell your brand because it helps them. It helps reinforce their message and delivers a premium option to their core occasion. They are the ones that need to associate their name with premium products, so they will go the extra mile for you. It will be "easier" to protect the volume here as you may fly more under the radar.
I hope this newsletter will help you better focus your efforts while scaling up. Build your brand bottom-up
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