ECRM (Efficient Collaborative Retail Marketing) w/ David Biernbaum

Foreign.

Welcome everybody to CPG Insiders. I'm your host Mark Young with my co host Justin Gerard.

Welcome all.

You have to admit, I give you a really big grandiose introduction.

Hey, there's always a lot of energy behind it every time.

There is a lot of energy for this show. I do have a lot of energy for the show because I love doing this show.

Yeah.

And the other thing is, as you know, I do another show that is thousand times bigger than this show. But I like doing this show because I'm so passionate about the consumer packaged goods industries and especially the entrepreneurs that are in it.

Yep.

And I just love seeing new products launch and I love seeing people be successful and success stories. And you know, like you and I have discussed, one of our clients that was with us for what, six years, started from nothing and sold for $325 million. And that's amazing when you think about it and you think about the numbers. I'm going to go with these numbers really quick here. And I'm shooting from top of my head. There's about 30,000 new CPG products introduced to the market every year. Out of those 30,000, the majority of them came from big Fortune 500 companies. However, out of all of them. And our guest will have something to say about this. Out of those 30,000, only about 150 of them survive.

Yeah.

Now, so that makes your odds of surviving with your new product.0003 good odds. Yeah. That's great. I would be more inclined to just go straight up on 17 on a roulette table.

Because better odds.

Because my odds there are about 46 to 1. Exactly.

The math is much better there.

It's a better way not. No. Actually 38 to 1 are my odds.

Right.

36 is at 38. So my odds are 38 to 1. That's a much better odd than 0.0003.

Yeah.

You can go play some roulette.

Now the good news is of all the consumer products that have ever been launched through this company, the odds of surviving have, depending on what year it is, are 95 to 100%. And our guest today is our friend, dear friend to the podcast, dear friend to me personally, David Berenbaum from Berenbaum and Associates. And David knows more about the consumer packaged goods. In fact, David has forgotten more about the consumer packaged goods industry than most experts in the industry know about the industry. Just the stuff that's fallen off the edge of the table in David's life is probably more than most people know about. This and so a couple things. One David, I'm going to guess and say in your 40 year career your success rate of a product that succeeds is what, 95%?

Yeah. It's. It's a lot better than 0.0003. Yeah. We have a really good batting average and I'm sure that frankly it's a lot higher than average and there's a lot of reasons for it. You have to really focus in on what you're doing and plan every detail and you have to really think through every move that you make because sometimes you don't get a second chance to make the same move. So yeah, we have a good success. We also are good at picking the right brands that we think part of.

The equation here is neither you or us take products that we think are going to fail.

No.

So that's, that's a big part.

And we pick the entrepreneur too. We pick the owner and we pick their teams. We can also tell when we meet somebody if this is somebody that has the potential to take a brand to a. A winning stage or if this is somebody that's just going to kind of fight with us and be one of the 0003 it's a tough business.

It's a big boy business. I apologize for not being gender neutral there that it is a like. Well if I said large person then somebody might get mad at me for saying that too though. So.

It's a tough industry.

It's a tough business.

It is.

But it's one of the few industries I'll tell you what I like in consumer packaged goods industries kind of similar to construction. As much as if you've got a lot of grit and I'm willing to work hard and you've got a good idea. A person with from modest means can become a very wealthy person.

Yeah, absolutely.

So it is one of those industries where we've all three of us have seen fortunes built where people started with borrowing money from friends and family and then became, you know, mega millionaires from their efforts. And they deserved it.

Absolutely.

By the way.

Yes. And so don't understand this. We're not unhappy when our clients sell their business because that's what they paid us to do. They paid us to help them get.

There to build the equity. Right. That's a win.

So on today's show and we could have a whole show just about selling your business and maybe we'll do that at some point in the future with David. They show. We're going to talk about ECRM now you Folks have heard us talk about that before. You may be familiar with it. There are kind of two main shows in, I must say, the HBC category. We've got ecrm, we have nacds, we've got Expo west and east on the organic and natural side. We've got CosmoProf on the beauty side. But for most of you who are going to sell your product in Rite Aid, Walgreens, cvs, Target, Walmart, the two big shows for you are going to be nacds and ecrm. And these two formats are vastly different than each other. I mean, they are such a different world.

Extremely.

So today we're going to talk about ecrm. Now, David, you have a history with ecrm.

Why don't you tell us? Yeah, I sure do. I started with ECRM, my involvement with Charlie Bolas in the mid-1990s when he founded it. Charlie was one of the most impressive people, not only in the industry, but one of the most impressive people I ever met. And I met a lot of people. He. He used to be a buyer in the industry, just an everyday buyer. He worked for Target for a while, but he also worked for a company called Boston Distributors, who, oddly enough, is based in Cleveland, not in Boston. And I was at a meeting with him one day when he was the buyer there, and we were just starting to have a cup of coffee, and he said, I'm going to bounce an idea off you. He says, now, you're not the only one. I've bounced it off other people, but I just want to get your thoughts. He said, it seems like the industry doesn't really have a format for entrepreneurial companies, startups where they can have, let's say, 20 minutes with one of the major chains and have their full undivided attention without a lot of noise walking around them or going around them or, you know, music in the background. And what if this event was category specific instead of like NACDS Total Store Expo, where there's 2,000 booths and probably 10,000 different types of items and categories, and you just have to be kind of lucky if the right buyer in the right category, you know, walks into your booth. So I thought it was a good idea. I was a little bit skeptical that he or anybody else could pull it off, because that takes a lot of planning and a lot of work, and it was innovative. So, sure enough, he spent his life savings and probably everybody else's life savings to start the ecrm. And to say that it was a success would be the understatement of the year. It changed the industry and it changed the level. It changed the ball game for new companies, startups, entrepreneurs. Prior to Charlie's innovative ecrm, you know, let's face it, the nacds and the nacds annual meeting especially, you know, that was for. That was for big companies, that was for the mega players, you know, the. Well, you know who they are.

I don't need to mention Total Store Expo now.

Yeah.

Who's got all the square footage? It's the Fortune 500s who have all the square footage.

That's right. And that's where the buyers are going to spend their time in the limited time they have. So this changed the industry. I would, I'm going to say this is not a scientific, any scientific research, but I'm going to say that because of ecrm, there's probably today maybe four or five times more entrepreneurial small brands that at least get a chance at retail that in the past would have never received five minutes or the time of day. So it worked. And it's changed a little bit, you know, throughout the years, like anything would do over 30 years. I do want to make a brief disclaimer only because it's the right thing to do, but, you know, As I said, ECRM was founded 30 years ago by Charlie, and since its foundation, I've attended more than 100 ECRM events throughout the 30 years with way too many brands to count. I've also, though, served the ECRM as a consultant, a paid consultant, a teacher, a trainer, and I've led special projects, especially back in the early days when it was just getting started. But everything I'm going to talk about today is based on my own knowledge, expertise and experience. But it's important, I think, that I say it. In no way is it intended to represent or speak for ecrm, nor any of its employees or associates. So now that we got that out of the way.

So, David, let me ecrm, some people that are listening on this show today may think of ECRM as Range Me.

Yeah.

And are they just the same now or is it one's digital and one's in person? What's the assumption?

Well, RangeMe has about 5,000 buyers that are involved with it. They're not all, you know, significant buyers, but they've got a pretty good, pretty good audience that uses it. And really what Range Me is, it's kind of like the social media for consumer packaged goods in that it's pretty informal as a supplier, as a brand. You could go and range me and, you know, write anything you want about your products, you certainly should include somewhere specific information. But the whole idea of it is kind of like ecrm in itself. It's one of the places where buyers go to see what's new in the market. And I'll tell you what, during the whole Covid thing, rangeme became much more powerful because nobody was going anywhere. So that became one of the key places where retail chains would say, well, what's new in the market? You know, I'm not seeing anybody, I'm not having any meetings, what's going on. And if you really participate in range me the right way and approach it in a most effective way possible, it's really quite an asset. So ecrm owns that, and it certainly doesn't replace anything, but it's a great supplement for ecrm. ECRM throughout the years, has had other programs like Range Me. They've all had different names. And now with, you know, AI, I would imagine rangeme is going to be even much more sophisticated than it already is. But I like it. It's pretty good. And I'm finding that really since COVID or during COVID many more buyers got involved with it than there were before. RangeMe is a part of the ECRM experience, but certainly not necessarily a big part of it while you're at an event. But it could be before and after.

Get calls from people, say, well, we joined rangeme, we put our product up there, and now nobody's calling us.

Yeah, well, you know, Mark, it's like everything else. It's almost like you're.003. If you really embrace it and really give it thought and plan it and you're clear about what your objectives are going to be and what you want to communicate to somebody who's never heard of you before or your brand. And I would go as far as saying, if you get the help of somebody like you guys or me or somebody that has done this a lot and really knows how to position a new brand, your chances are much greater that you're going to get a call. It may not be that right after you list yourself on it, you might not get a call right away. Excuse me, you may not get a call right away, but at the right time, when their category review is coming up in any given category, Range me is one of the resources that retailers look at. And if it's not impressive what you write for or if it just looks like me too, this is something. Let me lead into this. Because it's also what you have to prepare really, to have a successful ECRM you need to be prepared to describe how your new brand fits into any given category. You can't just leave these things up to the buyer to figure this out.

Let me stop you there for a second.

Go ahead.

When you're talking about category, if you would give us a little explanation of how ECRM runs these multiple categories.

Yeah, so ECRM category. Yeah. So in the most general sense, they have food service, they do general merchandise, they do food and beverage, they do health and beauty care. Pharmacy and medical are the main divisions. But then within each of those that I just mentioned, there's anywhere from 3, 4, 5 or 10 subcategories within. For an example, you know, most of my life has been in health and beauty care. So, you know, there's personal care, there's home health care, there's incontinence, you know, just about.

Can product be long in more than one?

It certainly can. For one thing, one of the things ECRM does some focus with that nobody else does is trial and travel. And so that could be a separate category for anybody in any type of store or situation. But what's beautiful about this is if, let's just say you attend the personal care ecrm, which usually takes place in June. In fact, I'm looking right now, this year is going to be June 14th to 16th in Palm Desert. Well, that'll be nice and hot. But at that particular event, they're going to have buyers from deodorant, family planning, feminine hygiene, incontinence, oral care, sexual wellness, shaving and trial and travel.

So there's a comma between sexual wellness and shaving.

I was waiting for that. I set myself up for that. So the buyers from all those different categories will be at the one event, but you will only see the buyers from where your product, the category it's in. If you've got an incontinence product, you know, you're not going to have to talk to the deodorant buyer. You're going to talk to whoever buys incontinence products. Same, you know, same thing with all the rest of these. So it's extremely buttoned down and focused in what you really need to focus on. In contrast, when you go to national, you know, when you go to nacds, the total store expo that really doesn't exist, all the buyers from everything are there. And the odds that you're going to see all the category buyers in your particular category, you know, unless you're Procter and Gamble or Colgate or Johnson and Johnson or Glexo, the odds are very slim. You have to, you're going to spend a lot of your time at Total Store Expo doing everything possible to pull key buyers into your booth. Now Total Store Expo has a nice vehicle now called Meet the Market. We're on the first day you get to meet 15 or 16 or 18 buyers in your category. And then you, you try to convince them to come to your booth. And, and if you're to do good at it, you do well at it. Some will. But at ecrm, in contrast, you're going to have your own room. What they do is they rent almost an entire hotel and they gut out sleeping rooms in half the hotel. And instead of having a booth where you can only have a few things up and you know you're going to have a room and you can, you can choreograph, you can decorate, you can design that room however you want. And a room is a big place. Even a, you know, even a sleeping room, when you think about it, there's lots of walls, there's lots of space for poster boards. You certainly have your computers and you have your projectors. There's all kinds of things you can do.

And if some time we get a suite where we've got more space, you.

Yeah, you know, and, and that's possible too, to work out with them. But if you just sign up for ecrm, you could get a room. And usually the fee for going in that direction is usually somewhere around 16,000. It could be more or less, depending on the event. But they also offer, and I'm going to say right now, I don't recommend this, but they do offer. You can get a 10F, a 10x10, really a booth in a conference room. You get 10 minutes and you do get appointments. That's where it's different than a trade show. But you only get 10 minutes and you don't have your own room and you don't really have the same kind of privacy. And you can do that for about $10,000. And then they now have a third alternative, it's called Discovery Hub. And that's also a 10 minute meeting, but it's just a table. And in fact, it reminds me one of the big national brokers who will go nameless here. But for all their clients, they just have a, they just have a conference room with round little tables. And all their clients, you know, have to sell their programs and their products from a little table in the conference room.

Who that is you're talking about.

Let me just say this. If you're doing more than $250 million. That's a good way to go because they're an extremely buttoned down, good organization with three different management levels. They, they've got everything. They've got all the IRI and Nielsen, they've got all the research. They've even can help you with logistics, all those things. But if you're just starting out, you know, or let's say doing under 200 million, you're not going to get the kind of attention and focus that you really need because they've got like about 80 clients.

I was about to say you're one of 300.

Yeah. And you know, guess where they're going to spend. Guess where the executives in that organization are going to spend their most time. Not with the little company. You're going to get the fresh college grad. Whereas in an organization like mine, which is much smaller, you get really all of our time in the category. Another example is if you know the big guy when they get an appointment, let's say in oral care, they're going to try to present like five of their oral care clients within an hour. And if you go there to the meeting, you're going to get like five or six minutes. It's even less than you get in these trade shows. I get the whole hour also, but I've only got one brand or two brands in a category. So you get the whole hour. That's a lot different. Or if it's 30 minutes, you get the whole 30 minutes.

What about ECRM has gone virtual with some of these now, right?

Well, last year was almost all virtual and the year before was all virtual. What is great news is that ECRM this year is probably going 90% or greater in person again at the venues. And that's the right way to do it.

It is. I'm going to tell you right now, folks, you will, you will build much better relationships and you much further.

Oh yeah.

Knee to knee with somebody than you will over a, a video screen.

Yeah. You know, on a zoom meeting it's so different. You can't romance your product very well. You certainly can't pass out samples. You've already sent the samples in advance and you hope they didn't lose them or you hope they remember to bring it to the meeting. I mean, you can hold up your samples to the little camera. You really can't see everybody that's in the room. I always find out later there were people in the room, I didn't even know they were there. Even though you will ask who's there, they'll only mention a couple people. You can't really have the eye contact. You can't see the body language and you really can't see what else they're doing. It's, it's not uncommon to be on a zoom meeting with a retailer and somebody's on their phone because as important as you'd like to think you are, you know, they get a call from their boss, you know, during the meeting. For some reason at the ecrm, that just doesn't happen. They really give you full attention. And the ECRM is very good at making sure that they do. ECRM goes to every room and knocks on the door three minutes before the 20 minutes are up, and they tell you you've got three minutes left. And everybody has to leave that room at the end of the meeting and the next company comes right in. So it's really well design that way and you get a lot of help in that way. But you have to know how to prepare for it. Now, ECRM has some great people that they'll give you kind of a best practices, a boilerplate on how to prepare. And it's, you know, it's 90% fine, but you really have to know how to prepare for the specific category that you're in and for the specific product that you're presenting. And for the specific reason, you've got to be able to sit down with the buyer at ECRM and tell them where the product fits into the category, which is, you know, what started us in the category discussion. It's not up to them to figure that out. You have to know that. One example that comes to my mind, Mark, is that you and I have worked with Princess where we have focused on the senior. The senior level market, the senior consumer. Well, if that's the case, then I need to sit down or you need to sit down at the ECRM and tell the buyer right off, we're going to focus on your senior consumer. And that's great news because your consumer has an average age of, you know, 61 or. And that's also great news because there's no product in the category right now that focuses on seniors. It seems like everybody else is going after mom, and that's fine. We like mom, but nobody's identified a big piece of the market and gone after them. So you define that. What makes your product different than the competition? You better have some answers. If you just walk in there with a me too, you probably shouldn't even use the 20 minutes. It's a waste of Time. Who's your target? How much incremental volume are you going to bring to my category? I'm a buyer.

David, let me ask you a question. Oftentimes we get calls from people at our agency and they're just looking at getting an agency and they tell us, well, we signed up for ecrm. We'll be at ECRM next month. Possible to be too soon running into ecm, definitely.

And, and you know, and again, I know ECRM is going to listen to this and I love you ecrm. You're the best. But you know, they're in the business to for sell the program and then they give you a lot of help once you sign up. There's no doubt about that. They've got great people.

Your business need to be before ecrm.

Yes. You, you don't, don't walk into an ECRM before you know what your marketing plan is going to be because you need to communicate that to the buyer or else they're not going to be interested. Most categories are being, Most categories are reviewed at ECRM right around the time that their category reviews are, you know, back at corporate. So the timing is usually close to perfect. I think I brought up the example before of oral care or personal care. Yeah. You go to ECRM for oral care in June because the reviews usually start at the end of July or first part of August. So the temptation, let's say for a brand new oral care company or a brand new toothbrush company is, oh, they're having the event, you know, in a month. I better go, otherwise I'm gonna have to wait another year. Well, if you are intent on going in a month, you better sit down with your ad agency, with your master broker, and you better devise a plan and be able to put it on paper, more specifically on a slide and in your PowerPoint and show the buyer what, what energy are you going to provide to move product off their shelf? If you just leave that up to them, they say, forget it, you know, we're busy. We don't have time to develop your marketing plan.

Let me explain something to you. It's. It is easier for a buyer to say no than it is to say yes.

Yes.

Because no means I'm probably at least going to do as much business in my category as I did last year.

Yeah.

When I say yes, I may be a hero and say yes to some great new item, but I may be a zero and said yes to a couple of dead items and hurt my category, and now I look like a loser to my Boss.

Absolutely, Mark. And you have to be able to demonstrate or to explain why the category is going to make more money because you're there. And it's not just that your margins are higher because your volume may be a lot lower. You know, a lower margin product that sells a lot more volume is still more profitable. So you need to sit down. And let's use the example again of we're bringing the senior market to the category. Well, right now you don't have a product and the product that we're presenting to you is premium priced and it's going to be the only product in the category that is targeted to a very large segment of your marketplace.

So let's just say there's 77 million people in this age bracket. There's people a day turning 65. Baby boomers control over 70% of all the money in America. And then that's just the stuff off top of my head which because we do this all the time. But then now you have to show me there's a demand amongst that demographic for this item. So now you have to say, look folks, there is. I'm going to use one of our products, Durmend.

Yeah, Dermend is a product, great product by the way.

Product. And Dermend is a product that helps relieve bruises. Well, who gets bruises? The elderly. Why do they get bruises? Because they have thinner collagen layers and they take blood thinners. And you see these people with bruised up arms and the term for that is Coumadin bruising because they took a blood bruise up. So I'm going to go in, I'm going to tell the buyer. Mr. Buyer, senior citizens are so embarrassed by having Coumadin bruises up and down their arms. And if you've ever noticed, you may notice your own grandmother probably wears a sweater when it's 90 degrees outside because.

Yeah.

Hiding the bruises on her arms. And you have nothing in your store that addresses this. And let me show you how my product, Durmand Bruise Relief is going to help 70 million people in America not have those embarrassing bruises on their arms.

But I think this gets back to your first question you were asking David about, which is when is it the right time to attend the show?

Yeah.

It has to come down to what size does your business need to be to say you're getting ready for this state.

Well, Justin, you know, I wish everybody asked that question. I wish all my clients asked that question before they signed up. When you have the information, we just talked about that, you've got to be prepared to talk about when you've got that button down, it's time to attend. And that's, that's assuming that you've got real samples to show and that your package design is done and ready to show. I mean, there are ways to shortcut some of these things if you have to. I mean, you could show prototypes if you have to, instead of finished goods. You could show a slide that shows what the design is going to look like. But don't go in there without a design and don't go out. Don't go there without, you know, knowing what your product's going to look like or what it's going to say. And for God's sakes, don't ask the buyer. That is such a red flag.

And do you have the capacity? Walgreens says, okay, we're going to take four pieces per store chain wide, plus inventory. So that's 8,700 stores times four times a backup inventory. So do you have the ability to ship 60,000 pieces of your product and do you have the ability to not get paid for the 60,000 pieces of product?

Right.

Because you may be pay on scan or you may be net, net 90 or net 120.

Right.

Yeah. Especially now.

Right. And you still have to execute that marketing plan that you're taking with. So do you have the money to actually spend that and execute what you just put in front of that buyer? Because don't bring a plan in there that is just for show and tell. And then when it comes to tell, you like, oh, I didn't know I was actually going to have to do this.

Yeah. Justin and Marcus raised a lot of different points in there. For one thing, it's getting a little, I have to say, it's getting a little bit tougher now, like it was before, maybe five years ago or six years ago. I mean, 2008 to 2011 was like the worst three years of my life in this industry. Although we did well, that's another story for another time. But from about 2016, right up until Covid, those were the greatest years in my consumer products life. And it was actually becoming easier to present new items that we didn't have to do pay on scan, and we can negotiate the terms. And retailers were taking chances. Now, gee, I don't know what happened over the last three years, but it's not like that anymore and for a lot of reasons. And now it's gone back to where retailers are afraid that their consumers don't have the money or they don't have the Cash flow or they have to pay too much interest on their credit cards, so they're spending less.

And retail theft is weighing into this.

Now, what you talked to me last time was retail reparations.

That is actually a term that has been used some people as it's retail reparations, but it's an issue. Example is a $30 tube.

Yeah. And it's getting tough.

German is getting stolen like crazy.

And yeah, because it's small and expensive.

And it doesn't come in a box. So they don't have to worry about the box getting, getting messed up when you sneak it out of the store.

You know, to that point, you know, every retailer wants you now not to use a box if you don't have to because of.

I know, but you need the box.

But you need the box not to get stolen.

Yeah.

I mean, yeah, there's a lot of conflicts of interest in everything that we look at and you just have to make the best decision for your brain. But, yeah, I think, you know, you'd brought up pay on scan and terms 120 days, and now we're back into that environment, sadly. So we have to, we have to be skillful to work with it and work around it. But in the meantime, you need to put thought into that before you go to ECRM because otherwise you're going to be 17 minutes into your meeting and the buyer is going to look at you and say, you understand pay on scan, don't you? Or you're okay with 120 days. Right. Well, you need to think about all those things. And it doesn't mean that you're automatically going to say yes, but you've put thought into it. You know what your response is going to be?

The people without the experience always rush in and say yes to everything. That's why you need to have a broker and a master broker that, that stops you from hurting yourself.

That's right. And an ad agency to help you get your advertising plan. Because there's very few products and I really can't think of many unless you have insulin or something. Especially now, you, you cannot really, real world, have a successful consumer product without doing some advertising. Because I would ask this, how else is the consumer ever going to know? I mean, you could tell all your friends and relatives. You could even have signage on the shelf. But that's not how.

When people go to the shelf to shop, they're going to see my package there and they're going to read my package and realize that my product is better than the products. That's next.

Yeah. Very, very few items are tried on impulse. Now some products are, but you really need, you need marketing, you need advertising. And so at least sit down and meet with an ad agency and get some thoughts and ideas. So at least you could be knowledgeable about how you're going to possibly promote. Now here's a secret. I'll tell you. You can lay out a great plan. And the truth is, you know and I know that until you get some business, you're not necessarily really going to do it because you're not going to advertise before you have distribution. So you're not like making a commitment that I'm going to spend X amount of dollars if I don't get distribution. But you need to make that commitment if I do get distribution, because you're going to need to do that to move product. And I'll tell you another thing. A lot of people think you can get by with just digital. And that's fine if you want to do all your business through Amazon or through E commerce, but digital advertising, and I know you guys do a great job at it, so I'm not saying don't do it, but digital advertising, it's hard to get people who really just want to click and buy to get in a car and go to the store and buy it. So you still need traditional advertising in order to get people to do that.

Digital runs tends to drive people to digital sources just for a number. For you folks, a Walmart Superstore has 148,000 thousand different SKUs in it. So when you put your one SKU in, let's say the first aid aisle at Walmart, you are one of 148,000 different items in that store. What are the odds that those consumers are going to stop at your item to examine your package?

I have it right here. 0.0003.

That's about right. Because I'm not going there to review 148,000 items. It is human nature. Humans respond essentially. Let me put it to this way before we get back to you, Sirion. Humans respond to something which is called availability bias. We have all these different biases that affect our brains. Well, availability bias is the one that really matters here. And availability bias is what is the information that is most readily available. In my mind, our brains work on something called system one and System two thinking. And system one is quick, responsive and intuitive. System two thinking is methodical and focused and concentrating. When we're out shopping, we're leaning into system one. So Availability means what's the product that looks familiar? So absolutely, the companies with the advertising. When I get to the shelf, and in our industry, David, as you know this, we always refer to this as the final three feet.

Right.

When I get to the final three feet and I'm now standing in front of a sea of topical analgesic, which there are probably what, David? 65 choices.

Yeah.

So my knees are hurting. I walk to the planogram. I have about 65 options in front of me.

Literally. Yeah.

I decide which box to pick up. I will tell you right now, my brain will gravitate to the familiar.

Yep. Yep. And if you're a new item, real world, you're not going to be center shelf in the middle. So you really need, you need to be a destination item. Yeah. At least for the first couple of years. And you're not going to be a destination item. If the consumer has never heard of you before they get to the store, they won't even notice you. Like, to your point, you know, 65 SKUs on the shelf and you're in a, you know, bottom right corner or something, they won't even notice you. Now their eyes will go to the middle of the shelf, you know, and use the example of pain relief, their eyes will go right to Icy Hot.

That consumer needs to walk in the store purposely looking for your item. That's the ideal situation. I saw ads. I like what these people are saying. They've got a celebrity. I like whatever the case is, I'm going to go to Walmart. I'm going to look for this. That's the ideal situation. But the fallback is I'm at the final three feet. I'm scanning across the category. Eyes land on your product. And I say, that's familiar to me. I think, you know what, that's the one I saw on tv. Or that's.

Yeah, I'm gonna try it.

Chuck Woolery using.

Yeah.

It has to be familiar. There has to be recognition.

Yeah.

So if you're gonna put yourself on the shelf and do nothing, understand, you'll get nothing.

Yeah, you'll get nothing. And you'll have to be dealing with your guaranteed sale. And you know, again, because the economy just isn't now what it was, you know, a little while ago, retailers have less patience in waiting for an item to take off.

Yeah, they do.

Retailers aren't. They're not making as much money right now.

Oh, they have very short attention spans too.

They do. And you know, if, if my boss, if I'm a buyer and my boss and his or her boss breathing down my neck like a dragon, you know, saying, your category is one of the least profitable categories right now in the store. I either need to get my resume out or I better find a product to replace it, even if it's not the right time of the year. And they're always looking to make more money and more profit in their category. There's several retail chains. People don't know this. There's several retail chains where buyers get paid that way. You know, they get a basic salary, but they're really paid on the profitability of their category.

Right.

Which take risks.

Yeah. And so I had a buyer that was a great friend of mine for years. He was. I'll say this, he was a CVS buyer. And I'll even go further. He was an oral care buyer probably for about 19 years. And at one of the NACDS events, I got him out for a cup of coffee. We went to the Starbucks in the convention center in San Diego. And I just. I could ask questions like this because I've been around so long and I've got a great rapport with these people. But it. I said, I'm just curious. You know, even at cvs, good company buyers just come and go, you know, or they get. They get transferred to other departments or, you know, most of them last maybe four, five, six years, and then they go, move on, do something else. You've been there 19 years. What's the secret? And he says, well, David, I've never been the number one buyer at CVS. I've probably never even been in the top five, but I'm always in the top 10. And the way that I do that is I don't take chances. I don't take risk. I know that if I just buy items from Procter and Gamble and Colgate and J and J. Revlon and all that, I know if I just buy products from those kind of companies, I don't have to worry because I know that their products are going to sell. Even though they're not the most profitable or have the highest margins, I know they're going to sell. I know I won't get stuck with them. I know that those companies are good to give me my money back if, for, heaven forbid, they don't sell. And I. I said to the buyer, let's just say his name was Bill. It wasn't Bill, but let's just say it was Bill. I said, bill, I really appreciate that we had this cup of coffee today, but that's the most uninspiring thing I ever heard.

Pretty much.

But it was honest.

It is.

So let me. From who? From your team should be at Seed?

Yeah, well, at ecrm. That's a great question. Because, you know, the nature of an entrepreneur, really and truly, let's be honest, the nature of an entrepreneur is a little bit of arrogance. And I'm not saying that is a bad thing. You kind of need a little bit of that to have the intestinal fortitude to launch a product. But they think they can do everything themselves, even if they really don't have the background or the experience. And then the next worst thing they do is they have a cousin, you know, or a relative or a lifetime friend who's going to be. It's going to be in charge of sales. But that friend or that cousin has never, ever been inside CVS or Walgreens or Walmart or Target or Kroger. And it's not easy to, to know what to do if you haven't gone through a process to be developed and trained. And seriously, if you haven't already had the chance to make mistakes and trial and error. You know, when I came into the industry, you know, I started with companies like Procter and Gamble and Gleo, and I wasn't allowed to go to a major chain until I had already been a territory man for two years. I was trained every single day by people that already were experts at the consumer products industry. I had to learn everything before I was allowed to go to Kroger. I had to call on, you know, iga, food stores, independence, independent pharmacies until I had it down pat. Okay, Now I live in St. Louis, so. Okay. At the time when I started, I lived in Chicago. But let's, let's use St. Louis as an example. Okay? Now we'll let you go to Schnooks, a regional grocery chain in St. Louis, but you're still not going to Kroger. You know, you're still not going to Albertsons. So you learn every single step in the most disciplined way possible. Now, an entrepreneur just develops a consumer product. He's got a consumer product and he's ready to go.

Making it up.

Yep.

Yeah, he's ready to go. He knows how to talk to people. He knows this product. He knows the features and benefits, and he knows why it's better than any other product on the market, and he's ready to go. Well, there's a lot of things you've got to know about the industry besides your features and benefits and that Leads me to this. You know, when you get 20 minutes at ECRM, don't spend the whole 20 minutes talking features and benefits of your product. You're not going to get in. You have to use some of the time, budget some of your time to talk about, you know, all the things we already talked about, why you're in the category, what it's going to do for the category, the profitability, your advertising plan you even need to be prepared to talk about. Do you have the budget to work with retailers with their in house programs? And if you don't know what they are, how they work or what they cost, you definitely shouldn't be in that meeting alone. So you should take with you an expert in the industry and you know, that could be somebody like me or it could be somebody that, you know, that has a lot of industry experience. It could be a consultant with a lot of industry experience. And if they have worked in your category, even the better, they might even know the buyers. So you have to do that. Now, I don't think, you know, ECRM will say that's a requirement or anything like that. They don't. But I will tell you it's a requirement for me because very few companies that go it alone without the experience or without the expertise or without the knowledge are going to succeed. And ECRM, forgive me for saying this, but I'll bet you 95% of those companies won't be back next year. Yeah, so, and I know there's exceptions, of course, but take an expert with you and get that person involved and you could, you know, you can sell your features and benefits, but don't take more than seven minutes to do that out of your 20. Make the rest of it a real meeting and leave time for questions, responses, leave time for feedback. You need that or you're not going to know how you did. Almost everybody I've ever met who just went to their first ECRM comes out of it and said, oh, we did great. We're going to get into cvs, we're going to get into Walgreens, we're going to get into Walmart, we're going to get into, you know, to Kroger, we're going to get into Albertsons, we're going to get into Meyer, we're going to get into Lewis Drug in North Dakota. Everybody said yes, everybody said it looks good.

And what I try to explain to these young buyers or young vendors is no, they didn't say yes. Everyone's being polite, go off the table. So the next person Comes in.

Yeah. And, you know, these are nice people, so they're going to be polite.

And that's funny because as you were talking, David, you know, that's what the question that kept coming to my mind is related to that.

Right.

All the meetings we have where people just say, oh, man, so and so is going to take us. And it's like, yes. Oh, just trying to flip that around a little bit. Well, you know, is the. Is the. The biggest mistakes that there's make at ecrm, I'm going to assume it's not being prepared.

Right.

Sounds like you just said taking up the entire meeting, essentially talking about themselves, not leaving any space.

Oh, that happens.

So what are some other, you know, big mistakes that vendors need to be prepared or don't do this.

And let me. Let me throw something in there. And that is what you just heard from David is it's the tendency of the buyer to say no.

Yeah, no's.

Keep my job.

Yeah.

Yes. Risk my job.

Exactly.

So you need to present something. First off, walk in with the question of, how can I help this retailer?

Right.

Not how are they going to help me?

And know everything you can know about the retailer before you go to ecrm.

What does Walgreens need today, which is different than what CVS needs? Who is this buyer? How can I help this buyer? How can I make this buyer more successful? And how can I present something that in such a way that even if the buyer says yes and it fails, the buyer's boss will come and look at this decision and say, oh, yeah, you know what? I probably would have said yes to this, too.

Sure, that's a good point. And be prepared, too, to talk about an exit plan. You know, that's a very unpleasant topic that nobody wants to use their 20 minutes to talk about, but your buyer needs it. The less risk the buyer perceives, the better chance you have of getting in. So be prepared to talk about an exit strategy if, heaven forbid, the item doesn't sell, and sometimes even great items don't sell. You know, Justin, you would ask, you know, what not to do. Well, be careful in what questions you ask the buyers. You know, they're all. Most of them are nice. Some of them aren't nice at all, but, you know, a lot of them are nice people and they'll answer your questions and, you know, they'll be polite, but they'll walk out of the room and they'll just, you know, ECRM gives them a. A laptop or they give them a notebook to use and they'll Just. They'll just delete you before they even get completely out of the room. If you don't really have all this stuff buttoned down. But be careful what you ask the buyer. Don't ask the buyer. How many stores do they have? Okay, you're from Texas. You've never seen a Meijer store in your entire life because they're only in six states, right up in the Great Lakes area.

Look it up. They've got 248 locations.

You know, all this information is very, very, very available. But if you want to take the shortcut, you call somebody like me or Mark or somebody and say, what do you know about Meijer?

Right. 248 locations. They're centered. They like to market products that have a tie back to Michigan.

Yeah, there you go.

Kentucky, Indiana, and Illinois. That's what you have to deal with. You would also know that Meijer, if you have the right broker and the right partners, you'll know that the Meijer family are good friends with the H E B family.

That's great information.

So typically, what happens at Meijer, you can go present to H E B. What happens at H E B? You can go present to Meijer.

And you're from Texas. So what a great thing that is because HEB Is only in Texas. So now you're from New York, and you're having a meeting with H E B. And what does HEB Stand for? No, don't ask that question.

Believe it or not, folks.

Yeah. And so do all you. Or take somebody with you or prepare with somebody who already knows all these things. It'll save you a lot of time and your broker. Yeah, and don't ask the buyer, you know, really dumb questions like, well, what would you do with this product? You know, how would you market it? Do you think we need advertising? Don't ask those questions. You're supposed to be the expert with your product, with the category. You're supposed to be the expert at the category.

Now, me, when I walk into a retailer, I want to actually tell them I want to go through all the IRI data, and I want to walk in and say, well, Bill, I was looking through IRI and you have six items on your shelf right now which are incredibly bad performers. Let me show you those six items. And of those six items, my item can fit in the same slot as two of these items.

Yeah, well, Mark, that's perfect. That's exactly the way you have to approach it.

So if you swap out these two items and this item is right Now, Bill, this item is right now doing less than an eighth apiece per week per store. I know my item can do a half a piece per week per store with the ad campaign that I've put in front of you.

And that means this amount of money more than what you're making right now.

Right. So I'm going to take you from selling $200,000 a year on this SKU, and my SKU, I estimate, will do a million and a quarter its first year on your shelf. I'm going to add another million dollars of top line sales in your category.

And what I want everyone who's listening to pay attention to is that could be your entire pitch. And I want everyone to notice that he didn't say one thing about the features and benefits of this product.

Well, that's exactly right, Justin. And that was the most important part of the whole meeting, what Mark just said. Because as a buyer, that's really what I need to know to make my decision. I mean, the features and benefits, that's great. I'm glad that you've got the secret sauce and I'm glad that nobody's ever had a product like this in a hundred years.

I always tell the story about a meeting I went into at Meijer. And you know the product and you know the buyer and the broker was there and the broker started. This was actually when the broker started talking about how efficacious the product was. And the buyer is sitting across from us looking through a pair of glasses at a computer, ignoring him. And then she looks over her glasses at him and says, do you think companies come in here and tell me how their product doesn't work?

Isn't that. That is so true. So it's like a way.

And I immediately grab control of the meeting. And my comment was, Shelly, let me tell you right now, Walmart has this product. Walmart's doing a piece and a quarter per week per store. Walmart's across the street from all 248 Meijer stores. We're a destination item. When they walk in Meijer and you don't have our product, they're going across the street to get it. And it's a $30 SKU and they're.

Going to buy everything else while they're over there.

And I swear to you, she looked at me with an actual look of disgust and said, what does the case pack look like?

Yeah, and now you're progressing because now she's asking the question she really needs to know the answers to.

And our answer was it comes in a six unit case pack. Because what I said to her was, you now are living in the world of fear of missing out.

Yeah.

Because I have an item that's selling a piece and a quarter per week across the street from you. And if you don't have it, they're going to walk across the street.

And by the way, if you're a buyer, that's another way to lose your job is if your boss is looking at IRI or making an observation across the street and you don't have that product. There's a case where saying no or, you know, not giving a serious consideration can hurt you too. So buyers can say no, but they also, they also watch the data very carefully because they can't get caught off guard. That's the worst thing that can happen.

They're still humans. They still consume media, they still consume advertising, they still have emotions, they still get attached to stories. They, they don't want to be the only store in town. Just like any human. I don't want, I don't want to be hit with the fear of missing out.

Yeah.

So yes, we have to make a business case to them.

Business is a good word there. That's, that's what you have to present the business.

Right.

But even though we're presenting a business case, they're human.

Yep.

And they have their concerns and their fears. I don't want to lose my job because I said yes to a stupid item. And I want to tell people. I'm going to. Let me tell you folks this. I'm not going to tell you the name of the retailer. You will figure it out off air. I know of a retailer where you almost have to be caught with a, with a dripping knife. And you killed an executive to get fired at this company.

Yeah.

But they fired a buyer and security walked him out of the building. And let me tell you why. Because he kept saying yes to stupid products. So company where it's hard to get fired. He got marched. He literally had a per walk out of the building because he kept loading his company up with items they couldn't sell.

And that is so much loss of money. And typically those items that didn't sell that were entrepreneurial, the entrepreneur really can't make good on it. And so now you're stuck with it. And now you've got to sell it all to Bill's Dollar Store and you're going to get like 17 cents a unit.

Yeah. He loaded his company up on about $5 million worth of absolutely stupid merchandise that I Stepped in and helped the retailer liquidate the big lots.

Yeah, you know, that's funny you should say big lots because you know, they just went into. Oh no, I'm, I'm thinking of overstock. Went into with Bed, Bath and Beyond. But Bed Bath and Beyond was an example of, of a company that bought too much stuff that didn't sell.

Beyond said yes to everything.

Yep.

Yeah, I miss them. They said yes to everything.

Everything. That's why their store has so much stuff in it. I mean, we were the nicest people I've ever done business with. I love them. I'm still friends with the buyers who were there, but they just, they just couldn't say no. I had a mouthwash product that they put five skews in. Well, I mean at the time Walmart only had four. And this is, this is a bath place. And they had five, excuse the mouthwash of one brand.

Bed Bath and Beyond said yes to everything.

Yeah, they did. So really, when we talk about being prepared for ecrm, it's really the same way that you prepare for going to headquarters and having a meeting, but only more so because you really only got 20 minutes. And that 20 minutes goes by so fast.

So David, I should probably have a pitch made for each meeting, right?

Oh yeah. And they're not all the same.

I was about to say this is not a one size fits all day.

No.

I need to know who my meetings are with, what that account needs. And now I need to have a pitch for each account.

Yeah. And you know, like for an example, you're going to, you're going to see drug chains, you're going to see food chains, but you're also going to see specialty stores. There's going to be e commerce companies, there's Amazon might be there, they go to some of these. There's going to be companies that are so specialized that you've never heard of them. But they might be somebody worthwhile. They're not all worthwhile, but some might be. But you've got to have, you got to know about each one of them and you've got to know what your presentation is going to look like. And it's not the same for everybody. Ironically, your features and benefits will be the same for everybody. But the rest of it, the rest of it's going to vary. You have to understand how you want to present an E commerce company if you want to do business with them. It's not always a great idea if you're going to have a meeting with a wholesaler or a Distributor, you have to know what that means. What do wholesalers and distributors do? In fact, that's not even the same thing. What's the difference between a wholesaler and a retail distributor? And do I have a program for wholesalers and do I have a program for distributors? Have I put any thought into that or do I even want to do business with them? You know, it's okay too, it's okay too to look through the schedule that CRM gives you and it's okay to say, you know what, for this type of account or this type of account or here's an example. Well, these three companies are Canadian. I like Canada. I'd love to do business with Canada, but my product's not approved yet in Canada. So it would be premature to have meetings with Canada right now. So I don't want to waste their time. I don't want to waste my time. Let's not have those appointments. But you might feel that same way about E commerce companies that aren't Amazon. You might feel that way about, you know, mail order type company if there's any left. The, the television companies come to these things like qvc, sometimes Home Shopping Network. Well, maybe I don't even want to talk to them. It might not even be even close to something I want to do. So why meet with them? I'd rather use that time walking the halls or walking the lobby or going up and down the elevator and finding people that I want to talk to.

Yeah, absolutely. So, David, we're past the hour. It's been a great show. How can people follow you or, or get in touch with you?

Sure. Well, my website is Consult David B. That's C O N S U L T D A V I D B as in Baker only. My name is Baron Bob link in.

The show notes to that. But you also have a lot of social media.

Yeah. So there's a. On LinkedIn you can join a group. In fact, let me show you something here, I can grab it. So this is a LinkedIn group, consumer goods and retail professionals. And I started that group in 2010 and we've got about 103,000 active networkers and we could have about a million if we wanted. But you know, we turn down everybody that's not in our industry or somebody that doesn't look legit. We turn down a lot of them. But that's a great place to learn and network and ask other people questions who are in the industry. And we've, you know, we've got members from North America, Latin America, Europe Asia. In fact, I would go as far as saying probably about 55 to 58% of it is not the United States, which is fine. You know, you might want to do international or you might want to learn about it, but if you don't want to learn about it, there's, you know, 50 something thousand members that are CPG people in the US so that's a good way or a good place to join or a good place to network in the industry. And buyers, there's a lot of buyers who are members, lots and lots. The CEO of Walmart is a member. Now they don't post a lot because for obvious reasons they don't want to do that. But they read a lot and I'm the lucky guy that gets to hear from them. Whether they're happy or not happy about what they read, folks go to the Show Notes.

We'll have links for that. We'll have links for David's website. Yeah.

And on the website, you know, feel free to, to write me there. And you know, I have to say, you know, I don't take on all clients. My time is loaded. I'd have to say that most potential clients I refer to somebody else because I just don't have the time. But it's worth a try. I've got a page on there where you can answer about five or six questions and if it looks like there's a match or it's a good fit for both of us, then we'll have a talk and then we'll have success together. And as Mark said in the beginning, you know, my batting average, just like Jekyll and Hyde's batting average isn't 0, 0 0.3. It's pretty good. Pretty good. And in my case, if you walk into a Walgreens or CVS or a Walmart, since 1977 when I started, there's about 200 items in those stores that at some point in time I've had something to do with. So that's good. I launched Aquafresh when I was 23 years old. It's still there. So yeah, get in touch if you want. And I can't endorse enough Mark and Justin's company for advertising, Jekyll and Hyde. I've worked with a lot of ad agencies over the years. There is no agency anywhere in the world that knows consumer products better, especially new items, entrepreneurial items, launches that can do a better job for you than, than these gentlemen. I would take an oath to that.

Thank you, David. You're too nice.

David.

Well folks, that's it for today's show. If you like what you heard, go to wherever you get your podcast. Leave us five star review. Remember, you can get all David's contact information in the show notes. You can always reach out to Justin or I through social media. You can also go to cpg insiders.com or jekyllhyde labs.com you can find us both there. That's it for today, David. I hope you'll be back next month and we'll pick up another topic.

I'll look forward to it. Thanks guys and have a great evening folks.

We'll see you on the next episode of CPG Insiders. If you're looking to greatly increase sales on your CPG product, don't hesitate. Contact us at Jekyll and Hyde Advertising and Marketing. By the way, the only advertising agency with a guaranteed result. Just go to jekyllheidagency.com or feel free to give us a call at 800542.