HABITS OF THE FASTEST GROWING COMPANIES
Getting To Your Customer Base
The most successful clients that Shirlaws works with have an acute understanding of the power of Distribution. Many call the art ‘channels to market’ and it is essentially about understanding the many different routes that your business can take its product/service to potential customers.
A key question we often ask new clients is; how many channels to market does your business have? It’s always interesting how rare it is to get a simple and consistent answer from everyone on the board. It is also fascinating how few businesses understand how Distribution unlocks huge growth potential.
Take the example shown in the diagram above. Kelloggs are a house of brands that produce breakfast cereals and other related products. The company’s main source of Distribution is the supermarkets. They themselves don’t sell directly to customers. For a high volume/low margin product, they have realised the most efficient way to drive sales is to establish key partnerships with retail distributors (the supermarkets). But this isn’t the only way that Kelloggs get their products to market. If you go and stay at any westernised hotel around the world, you’re likely to find small boxes of their cereal available to eat at breakfast. So they also distribute through contracts with hotel providers.
By establishing a number of core distribution relationships, Kelloggs have been able to simplify their sales processes to drive more revenue. Now, it may seem like an easy analogy because they are a household brand (and everything always seems easier for them). So take another smaller example. Shirlaws has a client that designs and installs kitchens. When the client first started working with us, they had a few retail outlets where customers could come in and buy a uniquely designed kitchen for their home.
After working with Shirlaws, we identified that it was the company’s design that set them apart from their competitors. It was a competitive advantage and could be leveraged to open up new distribution channels. The company now has a contract business, which sells its kitchen designs in bulk to property developers & architects. This contract business now generates more revenue than their original retail business.
Opening up new Distribution channels often requires you to think outside the box and to find someone that can see the ‘wood from the trees’ as well as increase revenue and profit - this is an unparalleled skillset that Shirlaws can provide for its clients.