Ep. 16 - Strategy Over Tactics: Scaling to Retail Giants

Distribution is the engine of the economy, yet it is often the most under-resourced department in a growing company. Founders frequently obsess over the technical specs of their product while treating their go-to-market strategy as an afterthought, leading to a "strategy gap" that kills even the best ideas. Scott Benedict sits down with Rich Smith, founder of the Rich Smith Growth Studio and host of the Revenue Science Podcast, to discuss the brutal realities of scaling into massive retail ecosystems.

We sit down to bridge the disconnect between marketing jargon and the business outcomes that CEOs actually care about. Our conversation moves through the tactical necessity of marketplaces as proving grounds, the importance of unit economics when dealing with big-box giants, and why your brand needs a "superlative" to survive. Rich shares his "Secret Sauce" for enterprise sales: stop asking discovery questions you should already know the answer to and start showing up as a commercial partner rather than a vendor.

The unglamorous truth is that most products don't fail because they are bad; they fail because they are invisible or poorly engineered for growth. Success in the retail world requires a shift from emotional attachment to your product to a cold, hard focus on distribution and mental energy at the leadership level. You will walk away with a framework for identifying your brand’s unique differentiation and a warning against jumping into expensive tactics like AI or SEO before your core strategy is signed, sealed, and delivered.

If you care about commercial outcomes, retail growth strategy, and scaling mid-market brands, you’ll get a lot from this episode. Please subscribe to The Digital Front Door and share this with a founder who is currently grinding on product but ignoring their shelf presence. What is the biggest "tactical trap" you’ve fallen into while trying to scale your brand? Let us know in the comments.

Transcript

Welcome And Why This Matters

SPEAKER_01 0:07

Well hello everyone and welcome back to the Digital Front Door. I'm Scott Benedict. You know, today's conversation is going to be, I think, really particularly relevant for a growing number of founders and mid-market brands who want to scale into larger retail ecosystems. My guest, Rich Smith, has spent much of his career operating at the intersection of enterprise leadership, digital growth strategy, and advising growth stage companies on how to translate big ideas into measurable commercial outcomes. Rich serves as the founder of the Rich Smith Growth Studio. He serves as an advisor to brands, the keynote speaker, and he's the host of his own podcast, the Revenue Science Podcast. If you've ever wondered why brands successfully break into large retailers, while others, despite having strong products, sometimes don't make it in. This episode is really for you. And Rich, we're so happy to have us have you join us today. Thank you for coming on.

SPEAKER_00 1:14

Yeah, thanks for having me, Scott. Looking forward to the conversation.

Why Great Brands Still Fail

SPEAKER_01 1:17

Good deal. It feels like before we dive in, we I probably want to give you the opportunity to give our listeners kind of a quick overview, not only of your background personally, but the work that you are doing today to help grow stage companies and help them be successful with enterprise size organizations. Yeah, sure.

SPEAKER_00 1:40

So just real briefly about my background, you know, I've been the chief marketing officer of seven different companies over the last 20-some years. And, you know, one thing that I've really found to be kind of a common issue is this, you know, there's there's marketing speak and then there's CEO speak. And one of the common issues that I ran into all the time was that it you had to translate marketing terms into business outcomes that CEOs actually care about. And um, you know, it just as a result of that that background, uh, you know, that's really driving what I'm doing today. You know, I feel very strongly that there are lots and lots of great companies out there, lots of great products, lots of great services. And the sad reality is most mid-market businesses fail.

SPEAKER_01 2:36

Yeah.

SPEAKER_00 2:36

And they don't really fail because they have a bad product. They don't, yeah, sometimes that happens, of course. But for the most part, they don't fail because they have a bad product or they have a bad idea or they're providing a bad service. They fail because nobody knows about them. And they fail because they haven't engineered uh systems for growth and they haven't engineered their customer experience. So that's really what I focus on today is helping organizations succeed in those ways and really, you know, bring great products and services to the world for the rest of us to enjoy because that's really what it's all about. And that that's the engine that drives a lot of our economy.

Strategy First Then Tactics

SPEAKER_01 3:18

Yeah. And you know, as a former retail buyer myself, that that really resonates with me on a lot of levels, most of which was uh retailers and and retail merchants are always looking for innovative new products, not only to keep excitement in the assorbent, but to differentiate yourself from other retailers and to your point, finding those brands, finding those companies and having them ready to do business, I think is is interesting. You know, you've you've worked on both sides. You've been inside large large organizations, you're now advising, as we talked about, mid-sized companies. And I'm curious, you know, what are some of the maybe the big disconnects that you see between sounders and their ability to speak the language and to serve some of these larger retailer organizations? What stands out to you?

SPEAKER_00 4:09

Yeah, one of the most common things that I see when I talk to a CEO or founder for the first time is they want to ask me things like should we be on Facebook? Should we be doing more with SEO? Should we be doing more to get ourselves into AI answer engines? Should we do Google search? Should we, et cetera, right? And my answer back is always, well, maybe it really depends. Like, tell me what your strategy is, and then I can tell you what tactics make sense for your strategy. But that's one of the biggest things that I see all the time is that CEOs, founders want to jump straight to tactics, and they haven't taken the time to think through the strategy to gather insights on their competition, their customers, their um their own company, right? What do the people within their company think or know about the vision or the purpose or where we're going, right? And so they haven't done those things. So they can't do they can't build a sound strategy that then drives tactics. If you jump straight to tactics without doing strategy first, you might get lucky, it might work, but we don't really want to leave it up to luck. Yeah.

SPEAKER_01 5:21

And that makes sense. And I I know that a lot of listeners that we have are these these small to mid-sized brands, and many of them are working towards trying to sell into larger retail ecosystems like uh uh a certain large retailer we have here in Northwest, Arkansas. And when a company says, well, we we want to get into to major retail, what's your view of what they most commonly underestimate, other than the fact they don't have a strategy? What do they also kind of underestimate in terms of what it takes to be successful in that kind of an ecosystem?

The Real Costs Of Big Retail

SPEAKER_00 5:56

Yeah, I think they largely underestimate the investment that's required to set themselves up to participate in those platforms. You know, whether we're talking about the the retailer you mentioned or other retailers like Amazon, there's all kinds of other online marketplaces, and each of them has their own kind of optimal entry strategy.

SPEAKER_01 6:19

Yeah.

SPEAKER_00 6:20

And I think that's largely underanticipated as to how much work that takes. So you know, and the other thing that I think that often comes as a surprise is the economics of being on those platforms. Um, you know, they tend to take a pretty big share of the profit or revenue that's being generated by every sale. So, you know, your your unit economics get can get tight on there as well. And uh, you know, unless um unless you can do enough volume to make up for that, you know, then then you're also gonna run into an economic problem. Yeah.

Merchandising That Wins Hearts First

SPEAKER_01 6:56

And you know, one of the things we talk a lot of a lot on on this show uh and in other venues that I'm in is the gap between digital strategy and operational execution, the ability to see marketing strategy drives towards a business outcome. And when you're what do you see maybe marketing or growth strategies most often uh break down when they run up against either product merchandising, retail media spend, in-store realities of presentation on a physical shelf as well as on a digital shelf? What do these things most often uh break down, or is it is it all of those to some degree?

SPEAKER_00 7:40

Well, I mean, you know, they're all interrelated, right? I mean, we're it's a it's an ecosystem, if you will. And it's almost like you, you know, you can't just look at one part independently. But one of the things that I think um really causes a breakdown is you have to translate what you're doing into words and terms that will really get in, really penetrate the awareness of your target audience. Right. And and here's kind of what I mean by that. There there are 188 documented cognitive biases. We all use them. Um, we all think that we are rational beings that make rational decisions. Uh, and that's what classical economics, which I studied, taught me. Then came this field of behavioral economics that blew a lot of that up. And it really showed that, yeah, we kind of make decisions based on emotion and then rationalize them later. So, you know, my advice about product merchandising is think about how you win the heart first and then win the mind. If you're leading with features and stats and things of that nature, you're gonna lose your audience. If you're leading with words and language that speak straight to the pain or fear that they have that your product or service resolves, that's going to get their attention. Right. So, so I think really thinking that through is one of the first steps to improving your, yeah, improving all of those things. Right.

SPEAKER_01 9:16

You know, it's interesting. One of the things, you know, not only in our conversations, but I I I spent time on your website and and listening to some of the talks that you've given. And I've heard you mention uh this effort to help uh sell into enterprise level organizations. And I'm curious, you know, what advice you have for founders when they're actually trying to reach decision makers? What often are this the things that that that work or that help them reach uh the right people? And maybe what are the some of the the wave-offs or warnings you might give in terms of those those those outreach, those conversations that maybe you've seen with with clients that you'd advise companies to not uh make those mistakes, if you will.

SPEAKER_00 10:09

Yeah, just so you know, having been uh a CMO for a long time, I sat on the other side of the desk, you know, and having being the buyer of various enterprise services. Uh so yeah, I've got a lot of uh firsthand knowledge of like at least what works with me, which I think works with other people too. Uh and and you one one of the first things that I would say is when you are when you're finally, it's not easy to get the decision makers in any organization. Um, it almost always takes either a relationship with someone who has a relationship with that person, or you have to just have immaculate timing. Happen to be thinking about the solution or the issue that you brought to them at that point. So, but once you've gotten into the C-suite and you're meeting with the buyer, you know, one of the things that that I saw very often was the very first thing that the sales person would do would be to just start asking me a bunch of questions about my business. And I understand why they're doing that. You know, they're doing it for discovery purposes because that's the way a lot of salespeople have been trained. And nothing necessarily wrong with that, but the problem is when you finally get the decision maker in the room, you shouldn't have to ask questions about their business because you're just wasting their time. They know about their business. If they're telling you about their business, then you're wasting their time. You need to walk in there with, hey, here's how we can help you. Good. And and with some background knowledge that you've brought to the table. So, like, and you can even confirm that your knowledge is correct. It's like, hey, we understand that you know you're you have these things that that you may be dealing with that we may be able to help with. Is that right? Right. Just you know, the the the most effective salespeople um come in as as a potential business partner. Yeah. Not as someone who's trying to sell you something. Yes. Right. If you have to push your solution on me as the buyer, chances are pretty good it's I'm not gonna not gonna buy it. You're gonna fail. You're probably gonna churn, right? Yeah, yeah.

SPEAKER_01 12:31

No, I and it's interesting uh as a former buyer myself, I could tell when someone who I gave an appointment to had set foot in my my store, had been on my website, had invested in learning a little bit, and I didn't mind to your point, a few questions, but I I I always felt like those needed to come from someone who had clearly invested a little time in learning about my business and how what they were selling you know fit a hole or fit an unmet need or was a new innovation somehow in this space to your to your point. And and so a few questions were fine, but it you just wanted someone who did uh a little bit of homework ahead of time, right?

SPEAKER_00 13:14

Yeah, yeah, absolutely. And it doesn't even have to be you know that much. I mean, I think you understand as a buyer that ex people that are external to the organization don't have access to a lot of the information about your organization, particularly if it's a privately held company. But they can still make an effort. There's still enough out there publicly that they can make an effort. It's kind of like being in a foreign country. And when you say hello to someone, if you just speak English, yes, yeah, but if you at least say hello in their language, right, then the conversation is much smoother after that. It's the same dynamic. Yeah.

Using Marketplaces To Prove Demand

SPEAKER_01 13:50

One of the things that I've seen a lot of both emerging brands do and retailers advocate for is the role of marketplace and marketplace selling. We're seeing a lot of brands use marketplaces or direct-to-consumer channels kind of as a proving ground from which not only can they generate near near-term revenue, but then provide and create some proof points that let them go sit in front of an enterprise buyer with some evidence that there is consumer interest and consumer acceptance, and I can execute on building a great product and shipping it on time. And my question for you all that is, is our marketplaces really becoming maybe a necessary stepping stone towards enterprise retail relationships? Uh, do you advocate uh for those with your clients? What's your view on that as a kind of a stepping stone towards larger engagements with a large retailer?

SPEAKER_00 14:55

Yeah, I think it certainly can be because typically the large retailers are are going to want to see some kind of demonstrated sales history. And, you know, it's kind of like uh building a credit rating. You know, you've got to start someplace and build it up over time. And it's the same kind of dynamic, I think, here. Uh, you know, and there are a lot of smaller marketplaces as well. Uh, I happen to be an investor in one. I won't mention their name here, but uh but they're basically a marketplace for independent small food manufacturers. And it gives those manufacturers another channel in addition to the direct-to-consumer channel, and it gives them much better unit economics than they would get from other larger marketplace platforms. Uh, and typically those marketplace platforms are not exclusive. Like you can be on multiple ones, but I think it's a matter of figuring out, well, what's the right fit for your organization and what you're selling at the current stage of your life cycle?

SPEAKER_01 16:04

No, and it feels like uh there's always key learnings that can be gained while you're still small and without making those mistakes in front of a bigger audience, that it's it's better to gain learnings perhaps on a smaller scale, apply those learnings, whether it's the product, the packaging, the pricing, the marketing, uh, obviously, and and do some of those, maybe those alternative platforms that aren't the big marketplaces, are those really what you advocate some of your clients to do first to kind of get that traction, to get that experience, to get the learnings and have a better chance of success down the road, perhaps?

SPEAKER_00 16:50

Yeah, I do. And and it's one of the reasons why, you know, it's because I'm seeing that trend. It's one of the reasons why I invested in the company that I mentioned a few minutes ago. And you know, it it is uh, you know, we've talked about how challenging it can be to do the setup that's required and meet some of the standards and of some of these larger marketplace platforms. Um, the smaller ones typically don't have, they have better unit economics, they don't have as many restrictions. They're typically a little bit less rigid about how you do business with them. And that's so that's a good stepping stone for a lot of companies. Start there, get your feet wet, so to speak, get some experience with working within an online marketplace. And, you know, there's nothing like getting some sales and getting some customer feedback on your product and service as well, so through through a marketplace like that, because that demonstrates that you're not just selling to people you know or to a natural market that you might have, but you are able to distribute at a larger scale and you've got uh a wider target audience.

SPEAKER_01 18:04

In those, uh, in in those examples and maybe some of those early days platforms where where brands get experience, what do you typically see separates the companies that then go on from there to have greater success versus those that stall out? Are there any kind of recurring lessons? I'm confident they maybe come from different product verticals or or are from different backgrounds, but are there recurring themes, recurring lessons that maybe you see that that you would advise other other clients to watch out for this, make sure you do these things. What stands out to you?

Differentiation And The Superlative Test

SPEAKER_00 18:44

Yeah, you know, everybody thinks that they've got a great product and that it's super unique. Um, what I've seen is that they underestimate how much differentiation it actually takes in order to make your product stand out. And differentiation can come in a lot of different forms, but you you really do need to think about how how is what you're selling different from what's already out there? And it could be price, it could be packaging, it could be the product itself, it could be features that are built into the product itself. There are lots of different things that can be used for differentiation. But if you're not able to talk about your product or service using a superlative, in other words, best, first, fastest, cheapest, only proprietary, right? If you if you're not able to use a superlative when you describe your product, you need to go back to the drawing board and rethink how you're describing it. Because I can guarantee you, every organization I ever worked with, I said, Well, what are you the best in the world at? And they'll say, Well, we're not the best in the world at anything. And my answer back is, well, you just haven't defined the world in the right way. Yes, right. If you're a coffee shop in Manhattan, being the best in the world might mean being the best on one block of the city. Hey, we're the best coffee shop on you know, sixth and forty-fourth, right? Like that that's the best in the world. So it's all about like, well, okay, how are you defining the world that you're playing in, which is often revolves around your target customer, which that's an important consideration as well. Right. And then what are you best first, fast, only, cheapest, right? How do you use the superlative to describe what you're doing within that to that target audience?

SPEAKER_01 20:38

No, I think this important thing is that uh, you know, Starbucks did not start out start out as the best coffee shop in the world. They started out as the best one in that marketplace area of Seattle, and they were the best option in that universe, to your point. And then they went went on from there and were assigned. Yeah, but the neighborhood, right?

SPEAKER_00 20:59

Yeah, and they engineered a you know unique uh customer experience that was very done very intentionally, right? And then it was done in a way that it could be repeated in multiple places, right? And their whole differentiation was kind of the third place, right? It's it's where you go between work and home. And and that, and this is kind of your home between work and home, and how you make the transition between work and home. And they they were very, very intentional about how they engineered that experience, and that's you know why they're the largest coffee brand in the world. It's interesting.

SPEAKER_01 21:40

Some of the early locations did not have drive-thru, and they once they got to a certain scale, they continued to learn and innovate, they put drive-throughs in. Now they've got drive-thru only locations countered. So they've continued to iterate, but you had to start somewhere to your to your point and and then learn to be the best at at each each. Step in the journey, if you will, uh, as they grew. And I think that's a great lesson for brands is don't try and conquer the universe all in one bite. It's it's how can you be the best in the in the part of the universe you operate in and then iterate from there, right?

SPEAKER_00 22:17

Right. Yeah.

Lessons From The Revenue Science Podcast

SPEAKER_01 22:18

I uh Cheers, I mentioned at the at the top that you have a podcast of your own called the Revenue Science Podcast. Uh talk a little bit about that. Maybe, you know, we obviously talk a lot about omnichannel retail and retail strategy on this show. What do you talk about on yours and and maybe some of the guests that you've had uh uh on your show and and and what you learned through that experience? I've learned a lot through hosting my own. I'm curious always about others in the space.

SPEAKER_00 22:47

Yeah, yeah, and I I I love hosting my own as well for the for the very same reason because you just meet a lot of people and learn a lot of new things. Um most of the guests on my podcast, and actually most of my audience, are CEOs, um, typically uh, you know, companies of all sizes, but you know, mid-market would be the most common. Uh and um yeah, again, the the guests that I bring on are usually CEOs who have been successful either through have had you know successful exits or have been successful at scaling their companies. And we talk about some of the strategies and pitfalls and things that they had to deal with or overcome or put in place in order to achieve the success that they've gotten. So we really try to give you know real world examples. Um, I'd say the other category of guests that we have are people who are really niche experts in certain areas that are an issue for uh sure for a lot of these companies. Um an example might be pricing. So I've had a pricing expert on uh another example would be sales. You know, I've had multiple sales experts on talking about sales process and how how to structure sales teams, et cetera. So so those are really the kind of the two typical types of guests. That'd say it's a little bit more heavily on the CEO side than on the you know expert uh side, but um that that's who I have on, and it's always a ton of fun to talk and learn from them.

SPEAKER_01 24:22

I I share that, and and it's interesting because uh my journey started out as the guest on somebody else's podcast, and and then it was hey, why don't you have one of your own? And it and it kind of got out of hand from from there in a good way. But uh I I share the perspective that it's so easy it's so fun through a podcast to meet people from different parts of the industry, different parts of the business community, and and you you learn as much as you as you share through that process, and it sounds like you're having a fairly similar experience to to the same experience I'm having, right?

SPEAKER_00 24:59

Yeah, yeah, definitely. I might have done it a little bit in reverse. I actually started my podcast before I started appearing on other people's podcasts. So I I just you know I didn't know what I didn't know, right? I'm just feet. Uh not necessarily an easy thing, but it it is rewarding for sure.

Three Moves To Grow Faster

SPEAKER_01 25:16

Awesome. So I want to kind of bring this home for our listeners, and and I I'm always cognizant of you know key takeaways for for the audience. And so if you're if you're a founder or an emerging brand owner trying to really scale your business and you're listening to to you and I talk here, you maybe have three things, three recommendations or or uh uh uh ideas that you would say, hey, go do work on these three things tomorrow or next week to to kind of grow your business. Do you do you have anything that that's top of mind? Good advice for for those types of founders and those types of companies that you recommend that they do?

SPEAKER_00 26:01

Yeah, absolutely. One of the first things that I would tell them to do is to uh just really take a look at where they're spending their time and energy. And the tendency that many founders have is to spend their time and energy on product and on um internal processes uh and and even on you know to some extent on the product experience. But where they don't spend enough time typically is in how are they actually bringing the product to market? So that'd be one of the first things that I suggest. If you're not spending at least 50% of your time on it, should be about 50-50, 50% of your time on product, 50% of your time on distribution. Typically, distribution is being way under-resourced. Yep. Uh and even and when I say under resource, I'm just not talking about people, I'm talking about the mental energy that the leadership team is putting into distribution. And so that that would be one of the first things I would say. Uh second would be uh, you know, uh what is your strat? Have you do you have a strategy? Do you have repeatable sales? Do you have people who are who have bought from you before that are going to that are buying from you again? Right. And and so to just really dig into, you know, where are you that you know, where are you with that strategy? And is it successful? You know, don't think about the tactics first, think about the strategy first. And and have you gathered the enough insight on your customers and competition in order to build a sound strategy. And then the the last thing is um, you know, when you're getting started, and this is one of the reasons why I think those smaller marketplaces are important. When you're getting started, the least expensive customer to acquire is the one who's the closest to making a buying decision for the product that you're selling. So you have to think through when you're looking at the array of tactics that you can employ to get started. You know, there is a continuum all the way from we've never heard of you out here, and we don't even know that we have the problem that you're solving, all the way down to, hey, we're ready to buy and we have our credit card out, ready to go. All right. So you want to try to make sure that you start by going after the tactics that are closest, that are finding people closest to that buying decision, as close as you can possibly get to that buying decision. Because that's going to be far more economical for you than to try to start up funnel, you know, with building awareness.

SPEAKER_01 28:54

I and I think that makes total sense. And I really I I appreciate that perspective because I I've seen it happen both in my career as a buyer and and now as a consultant, that those brands that that don't focus on the things that that you recommend are many times those that don't make it, that that fail. Uh and you've made the point irregardless of whether they have a great product or not, it's a lot of it's how they go to market and how they look to grow their business. And I think if you're a brand, you're listening to this conversation today, making sure your business shows up across both digital and physical touch points, making sure you have a strategy as Rich has mentioned, and then go execute on that strategy uh aggressively. Those seem to be recurring themes, Rich, not only in our conversation, your experience, but I see them obviously in the work that I do all the time. So it it really uh it really resonates with me and hopefully will resonate with some of our listeners uh as they think about how to grow their business uh at retail.

Where To Learn More And Closing

SPEAKER_00 30:03

Yeah, great. I hope so. Um those are all you know very common problems. They're not the only ones, of course. But um yeah, uh make sure you're building sound strategy that's based on insights you're gathering from your customers and competition in your own company. Um make sure that you've got a message that really resonates with your target audience, um, you know, where you're speaking to not necessarily likes, wants, and needs, but pains and fears. And um, you know, pay attention to the numbers, of course. Awesome. Awesome.

SPEAKER_01 30:42

Bruce, thank you so much. I'm gonna put up uh on the screen now uh a link not only to your website, but also uh to your podcast as well. So uh audience can figure out how to learn more from you, listening on some of the things that you share in your in your own podcast. You also uh do a lot of keynote speaking, and I think uh uh your message clearly is one that resonates with a broad audience. We're so thankful to have you on the program today. Thank you for joining us.

SPEAKER_00 31:10

All right, thanks, Scott.

SPEAKER_01 31:11

I really enjoyed being here. Yeah, as did I. So that's uh all for now for the Digital Front Doors. I'm Scott Benedict.