How Stoli Streamlined Communication Across In-house and Agency Teams to Cut Spending on Creative Execution by 30%

SUMMARY: From concept through interaction with consumers, the creative execution of every touch point throughout a brand campaign is pivotal to its overall success.

Mike Oringer, Senior Vice President, Stoli Group USA, discusses with MarketingSherpa how his marketing team leveraged a new creative execution services model to supercharge the brand and spike growth – all while cutting spending on creative execution by 30%.

by Courtney Eckerle, Managing Editor

THE CUSTOMER

“Stoli is an iconic brand. We have 80 years of history. Most vodkas, when you look at them, they're 20 years,” said Mike Oringer, Senior Vice President of Innovation and Trade Marketing, Stoli Group USA.

Alongside that history, he added, “We're reinventing our brand continuously and innovating in the category, and the retailers want to utilize our point of sale merchandising tools.”

Oringer works within a three-tiered system, where, “I sell to my distributors and my distributors sell to retailers and on-premise locations,” he said.

“We really view ourselves as an entrepreneurial company,” said Oringer. When he joined Stoli Group USA three years ago, the company had just been founded as a subsidy of SPI Group. They were tasked with reorganizing branding and being the importer and distribution channel for U.S. consumers.

“We had a goal of really started fresh and executing big,” he said, adding that this goal meant assessing operations at every level.

CHALLENGE

“We wanted to supercharge our brand and spike the growth. We went out and hired … new people. We explored our agencies. We explored all our messaging,” Oringer said.

The realization from that review was that, from a marketing standpoint, they had a huge opportunity to help build the brand.

“Our primary goals were we wanted better alignment, better communication, faster speed to market, and we wanted to cut out … unnecessary expenses from our system,” he said.

The team understood the need to “reallocate our monies. We also needed to reallocate how we communicated to our consumer with messaging,” he said.

First, they sought out a new vendor to help achieve those objectives and “help build the brand and better communicate brand positioning below the line,” he said.

The team then began working with distributors hand-in-hand, he said, and learn to invest where the business is. They discovered that they were spending “80% of our money in the on-premise outlets and we were doing close to 60% of our business in the off-premise. So there was a disconnect on our spending to where we're trying to reach.”

They needed to get 60% of the spend in the off-premise channels, meaning display merchandising, corrugated displays, header signs and window displays.

“We never offered that. We simply offered all the tools that would go on the bar — the shakers, the napkin caddies. That's not where the real drivers of our business was. We needed to take care of that too,” he said.

By investing in the right ways, and in the right channels, Oringer and his team wanted to see growth in three KPIs:

More shelf space

More displays

On more cocktail menus

They had other concrete goals as well, including taking out at least 20% of costs.

“We wanted to increase the speed to marketplace. We wanted to decrease the amount of time that we could bring a product to markets from a product from a production, or a new product introduction,” Oringer said.

CAMPAIGN

With the goal of being two to three times faster than what was currently in place, Oringer added that they wanted to be able to put marketing ideas into that play that were executable the first time around.

“We didn't want to have to go back and go from creative back to production and go back and forth multiple times,” he said.

In-house, his team is very lean, Oringer said, with a marketing department of only 10 people.
“We didn't have the resources to do things in-house. We knew that we wanted to have streamline communications and we needed turn fast,” he said.

To accomplish their overall goal of speeding up each process that gets product to customers, Oringer knew they would have to address five key areas feeding into one main objective.

“The ultimate goal is to sell more Stolichnaya. We need to give bartenders, restaurant owners, liquor stores reasons to take in more of our Stoli products on the pull into the store and the push out of the store,” he said.

Step #1. Optimize communications between in-house team and agency

At first, Oringer and his team identified that there was, in fact, an issue.

“We were getting to market late. We were spending a lot of money. We were spending more money on agency fees than we were spending on actual products hitting the marketplaces — point of sale, merchandise, equipment, below the line programming. We knew that was a major gap,” he said.
So to begin the process after identifying the problem, he said, they issued an RFP, or Request for Proposal.

“We reached [out] to other companies in the spirits world. A couple of us come from non-spirts backgrounds in the consumer products world. So we reached out to very strong below-the-line agencies, creative agencies to help us with the challenges,” he said.

Through word of mouth and recommendations, Oringer and his team narrowed down to seven or eight agencies. After reviewing all of the initial proposals, “we narrowed it down to three and then we gave each of them an assignment.”

The agency they selected achieved all of the goals Oringer and his team wanted, including:

Speed

Value

Creativity

Links in communication

In any agency or vendor relationship, he wants to make sure it is a seamless partnership, he said. That became especially important as they looked to consolidate the vendors and agencies being contracted.

“We’ve worked with so many different vendors. If you look at our roster of agencies, we had an above-the-line agency. We had a PR agency. We have a social digital media agency. We have a media buying agency. We have that for different brands in our portfolio. So we're working with different agencies, and we were working with a lot of different vendors,” he said.

One of the things Oringer and his team painstakingly learned in working with so many agencies is to understand your must-haves. For example, he recounted working with an agency that was talented, but was also working on 10 different brands simultaneously.

“When we briefed them, [they said] ‘We'll get back to you in two or three weeks.’ That's not what we want to hear as an entrepreneurial high-growth company. We needed to hear quick turnaround. We wanted to hear engagement. We wanted to hear brand compliance, and we wanted the ability for the speed to marketplace,” he said.

The biggest gain of working with just one selected agency was that his team eliminated a ton of downtime, he said, which was pivotal to brand growth.

Step #2. Streamline team marketing efforts to improve efficiency

As the team went to consolidate their efforts for efficiency, they optimized a lot of processes simply by choosing one agency.
An important aspect of that effort was consistent communication, since, according to Oringer, “we knew that they were going to be handling our creativity and our production of all of our items, from point of sale to paper point of sale, to merchandising equipment, to promotional materials, collateral sell sheets, etc.”

The agency is fully integrated with the planning process, he added, with regular briefs on program objectives.

“We don't just write them and hand them [over]. We write them. We communicate to them. We have dialogue about it back and forth,” he said.

Even though they're an agency, Oringer likes to think of them as “the brand police.”

“I view them as an extra set of eyes for us. We have complete creative access to their team. We speak to them on a regular basis, from the production people to the account manager directors all the way to the creative people,” he said.

Once there is a finished version of a brief, the teams produce buy books, which are created three times a year and shared with the salespeople and distribution channels.

“Buy book number one covers what we call all of our flow merchandise and our winter [and] spring merchandising. Buy book two covers our summer and fall and buy book three covers our holiday time period. So the [agency] is fully integrated in the planning phase, creative, the production, the execution in the marketplace and then the course correction,” he said.

Click to see a larger, printable version of the chart

A buy book could be a list of 80 items that is offered to the sales force, Oringer added, which could be “counter cards, header cards, display racks, merchandising material, shelf talkers, neck hangers, all these different things that are eye-catching, premium-looking that well represent our brand to communicate to consumers, retailers and to all our distributors.”

The buy book is offered to the sales force who then shares that with distributors, according to Oringer.
“If you look across the United States, we carve our marketing up into four different major regions. Each of our regions is working hand in hand with our distributors to optimize the brand. What are we going to do to create and awareness and what are we going to do to drive volume? Both of those things get factored in the buy book,” he said.

Step #3. Work closely across all teams

From Oringer’s experience at Coca-Cola, he said he wanted to link his marketing and sales teams to operations so that the ideas brought to the table were realistic and could be executed in the marketplace.

“I think if you have a good brief, input equals output,” Oringer said. His team worked closely with the sales team and the agency when writing out a brief to ensure that everyone is fully aligned on goals.

For instance, he said, this helps to distinguish “is our goal to get more shelf presence? Is it to get more displays? Is it to increase our points of distribution? Is it to increase cocktail menus?”

After fully aligning on goals, the teams agree on what the programming is going to be, and what product will be pushed. Then, establish up front what the KPIs will be.

He added, “How are they going to be measured, my sales force, and how are they going to hold distributors accountable?”

Once aligned on a selection of programs, graphics and tools, the brief and tactics to deliver that plan are set up. Then, with options and choices, Oringer’s team and the sales team decide what is most in line with the already established goals.

At this point, to ensure those goals can be met, costs and timelines with production and suppliers have already been vetted.

The success in streamlining that they have seen, he said, can be attributed to “great communication throughout our entire system between sales, marketing operation. We're also bringing in our distributors and [agencies] as an integral part of it,” he said.

Step #4. Make your product value easily understood by the customer

“One of the things I'm very proud of is this past year, the vodka category was flat. We grew our business close to 5%. So we're stealing market share from our competitors and we're getting the share of mind of our distributors and of all of our retailers. That's our ultimate goal in this business,” he said.

An example of how this growth has happened is the efficiency achieved when Stoli Gluten-Free Vodka was launched. Gluten-free is more than a fad, he said, and Stoli needed to effectively reach out to that customer base.

“The word ‘free’ is a magical word. People always were looking for fat-free, cholesterol-free, sugar-free, caffeine-free. We identified the consumer need of gluten-free. It's a $47 billion category, and it's growing 20% per year,” he said.

There is no one else in the vodka category who has effectively merchandised that they’re gluten-free, Oringer added.

“Our challenge was how do we communicate this great message out to the consumer? We sat in a brainstorming session. … We sat down. We wrote a brief. We shared it with all of our agencies,” he said.

The team wanted to communicate that “we're more than corn. We're also buckwheat, which rounds out the taste to give it that great flavor profile. We wanted to communicate that we are different than our normal Stoli vodka, which is made from wheat [and] is not certified as gluten-free,” he said.

It was important to communicate trust and credibility, and they integrated this with every point — different packaging, colors and all of the other point of sale elements for on-premise (liquor stores, supermarkets, restaurants and mass merchandisers) accounts.

Click to see a larger, printable version of the chart

It’s exciting for clients to be able to offer gluten-free Stoli vodka cocktails, he said, and his team has worked with their vendor to create beautiful cocktail menus, coasters and displays that will appeal to customers.

Oringer and his team created both a 360-degree activation of point of sale and merchandising tools to make the gluten-free concept easily understood by the customer.

For instance, he and his team, working with the vendor, created PR kits that included an empty bottle of Stoli Gluten-Free that is filled with 88% dried corn and 12% buckwheat. The kits made it easy to educate bartenders, retailers and distributors on the value to sell it directly to customers.

Click to see a larger, printable version of the chart

Stoli also paired with a gluten-free restaurant for a launch event, where influential bloggers were invited to partake. One of whom, Nicole Cogan, runs a gluten-free blog called NOBREAD New York City. Inviting bloggers who cover certain areas helps to keep the message “local” — both to specific groups, for example, to gluten-free customers or to New Yorkers.

Step #6. Continually optimize through feedback

When distributors are looking for something new, Oringer said, they reach out with ideas that he brings to the Sales team to brainstorm with.

“We'll write a brief. We will go to the [agency] team with that brief, concise with … what we're trying to achieve versus the prior year. They will then come back to us with five or 10 different ideas that fit that brief. We will then go back with our sales team and our distributors and get their input,” he said.

He uses an online survey service called Newlio, where, he said, “I have a network of 5,000 people that I always do my planning and my marketing with. I go to consumers, which is around 2,500. I go to all my employees, which is close to 100, and the rest of my distributor network.”

He sends out a survey of around 100 questions to this collection of people, which covers what product programming worked and what didn’t work.

Afterward, he said, “I have tangible things that I could build business plan off of. So there's constant communication and course correcting, and [the agency] is always in the loop of what we need to change, fix and expand upon.”

Oringer and his team go through quarterly business reviews with each of their major distributors, where feedback is also given. He said the group discusses “what's worked, what hasn't worked in terms of programming, what delivered the volume numbers. Then we get all of their feedback after we share the plan for one quarter, two quarters and three quarters ahead of time. So I'm already talking with them about 2017.”

RESULTS

At the beginning of this effort, the goal was to cut spending by 20%. Currently, Oringer and his team have saved 30% on creative execution.

“From a communication standpoint, I feel like our communication has drastically improved. We're turning around quality work. I would say that we're probably two to three times faster than what we were doing prior,” he said.

He and his team are getting approval on all levels faster, and executing on customer-facing ideas. That speed makes room for fresh new ideas as well, he added.

When it comes to KPIs, Oringer said, “We're up on our shelf presence and we're up on our number of cocktail menus. What is that resulting in? It's resulting in increased volume.”

What that has accomplished is a concise execution of creative, alongside timely production of all point of sale elements, he said.

“It's hitting our distributors and the retailers at the appropriate time. Things aren't coming in late. We're not missing seasons, and we're not missing programs. We're working on all cylinders, and we outpace the category of vodka. We grew our business 5% when the category is flat,” he said.

Another important aspect of this streamlining, he said, has been transparency with communication.
“You need to have a seamless communication between [the agency and our team], and we have to have seamless communication amongst our own team. That's the whole key, is everybody's got to be connected.”