269. Extend Your Runway Boost Sales - Bulletproof Your CPG Brand

0:00If you're an emerging CPG brand, you're probably feeling two things right now. One, pressure on your cash flow, and two, pressure to grow faster. The problem is, most of the advice you're getting will shorten your runway, not extend it. Today I'm going to show you three simple but powerful ways to extend your runway and boost sales that almost every brand overlooks. And I'll also show you why this show and my work have completely evolved to serve you better. Welcome back to the Bulletproof Your CPG Brand Podcast. I'm your host, Dan Lohman, founder of RetailSolve. If you've been with me for a while, you'll remember this show as Brand Secrets and Strategies.

0:38We published 268 episodes, interviewed the top leaders in natural and organic, and built a strong community of founders and industry pros. Then I went quiet for a while, not because I was done, but because I stepped deeper into the work. Let me take a brief moment and step back in time. I had just completed our second successful test pilot as a CEO and co-founder of an innovative startup. We were on a mission to dramatically reduce diabetes and obesity while making food taste good again. With our successful test pilot under our belt, it was time for me to start focusing on how to build and launch our brand.

1:15That included raising capital, developing packaging and marketing, and building a sales team and everything else that goes into launching a successful brand. Being new to this, I realized that there was a lot I didn't know, so I turned to the incubators, natural product business schools, and industry networking groups. I was a sponge, trying to learn everything I possibly could in a short amount of time. While I learned a lot, the best part was I met brands in all stages of development, from pre-launch to brands that were already household names. We had interested investors, but the terms were brutal.

1:50They would have either taken control of the brand or forced us to abandon our mission. And I started to hear the same stories from other founders. Great products, passionate missions, but term sheets that felt like trading your company or your soul. Getting in the trenches was great, but I was hearing a lot of horror stories from other brands in similar positions, including those who were having a lot of success at retail. They were all struggling with the same things I was struggling with. They were struggling with getting funding, gaining profitable distribution, and getting meaningful traction despite all the advice and coaching.

2:25The general sentiment was that retailers and distributors looked at us more like ATM machines than valued partners and cherished brands. It felt like everyone had their hand out and we had targets on our backs. The advice I was getting was generic at best. I knew that if I had followed most of the advice I had been given, I would run through all our cash in a heartbeat and we'd never launch. While it was important to learn how the game was played and what to expect, none of the advice I had received was going to guarantee our success and differentiate our brand on a crowded category. That's when I saw from the inside how broken a lot of the advice that founders get, especially around funding, retail, and growth.

3:04That season made something crystal clear to me. Emerging brands don't just need more advice, they need better strategy from people who actually sat in the founder's seat and across the table from retailers. Thinking back on those experiences is exactly why I pressed pause. I went back into the advanced strategy work doing the kind of work big brands pay a lot of money for, so I could bring those insights back to you. While working to launch my brand, I was also a regular feature contributor to just about every industry publication, writing hundreds of articles focused on answering questions founders would submit.

3:40That led to speaking, mentoring, and helping entrepreneurial brands. I've also worked for big brands in sales and was classically trained in mainstream CPG as a category management expert, the first person certified at the highest level category management proficiency, a certified professional strategic advisor, a CPSA, plus grocery manager, store manager, district sales manager, broker liaison, etc. Big brands invest heavily in developing their talent. They sent me into multi-day trainings month after month, led by the best subject matter experts in the industry. I learned more there than I did in college, and I want to open those playbooks for you.

4:19So this show has evolved from brand secrets and strategies to bulletproof your CPG brand, and my website now is RetailSolve.com. The focus is sharper, turning retail relationships into revenue, developing a multi-channel strategy to future-proof your brand, maximizing your trade marketing ROI, improving broker performance, and converting occasional shoppers into loyal evangelists. In short, extending your runway while you grow sales. The result is giving your brand the unfair competitive advantage it deserves. You'll also hear solo training episodes from me, practical playbooks you can implement right away, plus conversations with some of the brightest minds in CPG, many of whom you recognize from past episodes and from your LinkedIn feed.

5:07As with all episodes, at the end of every show, there's a free downloadable guide to help you go deeper into the topics we discuss. So stay tuned and don't forget to hit subscribe to be the first to know when new episodes drop. Reach out and let me know what your most pressing issues are. You know, the things that keep you up at night and I will do my best to get you the answers that you deserve on future episodes. The story I shared at the intro was true, and it's something I've never shared publicly before. While it helped me form my appreciation for what it means to be an entrepreneurial founder, this show is about you and your journey.

5:43Just know that I have walked in your shoes as a founder and by your side as a mentor for hundreds of brands. I will share more of my story in future episodes, along with what happened to that venture. Stay tuned. Let's get into today's topic. 3. Overlooked ways to extend your runway and boost sales without chasing more discounts, more ad spend, or more chaos. First, context. Why velocity is failing you? Most of the industry worships one number, velocity, units per store per week. If you're a small, natural brand, that's usually the metrics that's used against you. Here's what doesn't get talked about enough.

6:22Small, natural, better-for-you brands often drive more profitable sales contribution and profitable category growth than big, fast-moving brands. Without them, many categories would be flat or declining. I managed to originally prove this in a featured article I wrote for the 2016 Category Management Handbook, and I've proven it several times since across multiple categories. Let me explain. Shoppers today are more health conscious and as a result, they carefully read labels and they pay close attention to what they put into their bodies. Food as medicine continues to be a growing trend. Therefore, health conscious shoppers are less price sensitive and they will pay a premium for products that have the attributes they are looking for, like less sugar, high protein, organic, gluten free, plant based, etc.

7:10Those products contribute more profitable dollars to the category, their contribution. This is what retailers take to the bank. Conversely, big brands lacking those attributes tend to drive sales with deep discounts, effectively commoditizing their brands and the categories as a result. Those brands pull profitable dollars from the categories and provide no real unique value to the retailer. Their customers chase price and are not loyal to any one retailer. Natural, better for you brands, often bring in the most loyal shoppers, the biggest baskets, and true innovation that shoppers are looking for today.

7:48But if you're only judged by velocity, you look like you're underperforming. Let's change that conversation. So extending your runway isn't about just cutting costs or getting cheaper ingredients. It's about protecting the value you already create at retail, in your trade spend, and with your most loyal shoppers. It's also about the contribution you provide to your retail partners. Now, let's get into the three strategies. Strategy number one, fix your promotion agreements. Let's start with something painfully unsexy that quietly bleeds a ton of your cash. Retail promotion agreements and deductions.

8:25Most brands treat these forms as admin paperwork. In reality, they're the legal backbone of how your discounts get taken and how you challenge deductions. So why does this matter? Consider this. In episode 197, Eric Skay shares a story where he received a check for$12.31 on a$16 ,000 sale. Deductions can derail or even bankrupt a brand, especially small brands. Go back and listen to that episode for the specifics on how Eric handled it. Here are some key points to consider. Vague, sloppy, or incomplete deforms equal deductions you can't dispute. Many brands then pay a third party to reconcile deductions.

9:09That should never have happened. Remember that even if you're paying someone to manage your deductions, that's an expense, money you may not need to spend in the first place. To make matters worse, you're tying up your cash flow while you're setting your deductions. Can you afford to do without your receivables for months at a time? Retailers do appreciate clean, accurate paperwork. It makes their lives easier. Keeping your cash ready and available gives you more runway to grow and scale your brand. Simple strategies to fix this include 1. Slow down and complete every field or in every form clearly.

9:46Each sales deal sheet is a contract. Treat it with respect and attention to detail you would treat any other contract. 2. Include detailed specifics. Specify the deal start and end dates. Specify items to be promoted by UPC. Discount amounts by each item UPC. Specify where the items will be displayed and who will be responsible for maintaining displays. Don't leave anything to chance. You should also include how much product you recommend each store needs to have in the back room to support each promotion. We'll discuss why this is important in future episodes. 3. Keep a clean digital record organized by retailer and date.

10:294. Retailers will appreciate your attention to detail. This will set you apart from your competition. You don't need a fancy system to start. You just need discipline. Think of your promotion agreement as your first line of defense against unnecessary deductions. Every deduction you prevent is real cash you get to keep. That's runway to help you grow and scale. Strategy number two, on-your-shelf strategy. Episode 104 is a real-life story where a podcast fan shared their frustrations when trying to support a friend who just launched their brand. They went into a retailer to purchase their friend's product, but the product wasn't where they expected to find it.

11:11They searched for a long time and finally involved a store clerk. They still couldn't find it. Finally, they found it in the wrong category, far from where her friend told her to look for it. This is a colossal mistake that many brands make. Let me explain. The brand spent a lot of money to promote the product. That was wasted. The retailer expected new, excited shoppers in their store and instead got frustrated customers. Not a good first impression. Now, the brand needs to spend a lot of money to have the product re-merchandised, and that could take several weeks. Think of all the additional lost sales between now and then.

11:47A simple mistake like this could potentially bankrupt their brand. Unfortunately, I hear a lot of stories like that. Go back and listen to that episode to learn more and how to avoid making those critical mistakes yourself. The key takeaways are shoppers can't buy your brand if they can't find it. That includes poor or inconsistent merchandising in the correct category, even across multiple stores within a retail chain. Few, if any, shoppers are going on a scavenger hunt to find your brand, especially time-starved shoppers. When a product is placed in the wrong category or section, it hurts your velocity, and retailers quickly lose faith in your brand, making it ripe for being discontinued.

12:28Key points. Your packaging and shelf placement are your brand's first impression. Make it a good one. Retailers are not experts in every single category and subcategory. They need your guidance. If you don't proactively guide your product placement, you're leaving it to chance. Retailers rely on others who do not have a vested interest in your success. Frequently, the resources they use don't rely on trusted merchandising strategies. To fix this, 1. Always include a recommended schematic when presenting new items. I offer a creative solution in the guide at the end of this episode. Two, show where the shopper expects to find your items with fact-based reasoning.

13:12Three, tie your product placement into how your core customer shops the store. For example, when she buys X, she also buys Y. Remember, if your customers can't find your brand, then they can't buy your brand. And if they can't buy your brand, then nothing else matters. Not your social media, not your beautiful packaging, not your mission. I go into this deeper in the New Item Essential Guide, available at the end of this episode. Strategy number three, align your brand story everywhere. Now I'm going to share with you the simplest and yet most consequential mistake that every brand makes. It's inconsistent messaging.

13:50I've had the privilege of working with brands from pre-revenue to multi-billion dollars in sales, and they all have this problem. Consider this. If you asked 100 people from all over the country to tell you what came to mind when they thought of your brand, you would probably get dozens of different answers. This is why your marketing does not resonate, and this is why your trade spending is ineffective. This is also why your brand does not stand out on a crowded shelf, and why shoppers frequently choose your competitor over you. Now, play the game with an established big brand. You will get the same results.

14:25Why? Because brand marketing and messaging is inconsistent at best. That confusion is expensive. A confused mind will always say no. Always. A consistent, compelling story is one of the cheapest, highest ROI ways to grow sales and extend runway. Teach the basics throughout your entire organization. 1. Founder-level story. Why your brand exists and who it is for. Two, translate that into a simple, repeatable, turnkey sales story strategy for your team. Three, make sure it shows up everywhere. Sales decks, promotion, packaging, social media, retailer conversations, everywhere. The reason this matters is because when you bake that messaging into your brand's DNA, then it shows up in everything you do and it gets transferred to your ideal customers.

15:15Don't believe me? Consider Patagonia. It's just about the only brand that I can think of that does this and does this well. Their clothes are iconic and they're a symbol for what the brand stands for. Their products, their marketing, their policies, they all tell the same story. That's what you're aiming for in your own way. This was a foundation of why I created the free Turnkey Sales Story Strategies course and how it helps teams communicate with the same passion and enthusiasm as the founder. The primary building blocks missing from every brand I've worked with. Recap. I just gave you three simple, easy-to-follow strategies that you can implement today to start saving money and increase your runway.

15:57One, tighten up your promotion agreements to stop unnecessary deductions. Two, own your shelf strategy so shoppers can easily find and buy your products. Three, align your brand messaging so everyone tells the same compelling story. None of these require a giant budget or a huge team. They require attention, intention, and a commitment to being just a little better than the brand next to you on the shelf. Over the next several episodes, I'm going to go deeper into each of these, plus topics like simple foundational skills to instantly give you a competitive advantage, when not to outsource your go-to-market strategy, how to protect your brain trust when you're cutting costs and how to build retail relationships that actually extend your runway.

16:46Reach out and let me know what keeps you up at night and I'll do my best to get you the answers you need in future episodes. Subscribe and follow the show. Visit RetailSolve.com for the full list of episodes plus brand building resources. Tell others about the show. Help me raise the bar in our industry. Connect with me on LinkedIn. Download the new items essential guide at the end of this episode and check out the Turnkey Sales Store Strategies course. You don't have to play the same game big brands play to win at retail. You just need to know how to play the game that works for you and how to stack the odds in your favor.

17:23I'm here to help you do exactly that. I'm Dan Lohman and this is the Bulletproof Your CPG Brand Podcast. Want a competitive edge? The recipe for success. Here's this week's free downloadable guide. New product innovation is a lifeblood of every brand. New products fuel sustainable growth, attract new shoppers, and increase brand awareness. Learn the crucial steps to get your product on more retailer shelves and in the hands of more shoppers. Maximizing your trade marketing can pour rocket fuel on your lunch. Thanks for joining us today. Please reach out and share your most pressing questions and I'll do my best to get you the answers that you need on future episodes, including expert advice from CEOs and industry thought leaders.

18:01Comment, leave your questions, and get this week's free downloadable guide and the show notes at RetailSolved.com slash Session 269.