leadership

Meet the brewing boss who says a bar is the best place to learn to sell

Harvard Business Review /

Boston Beer Co founder and chairman Jim Koch offers some eye-opening insights in the first instalment of a six-part series where business leaders offer their perspectives on sales success.

  • Year Founded: 1984
  • Employees: 840
  • 2011 Revenue: $513 ?million

When I started Boston Beer Co, in 1984, I had three degrees from Harvard and seven years of management consulting experience, and I saw sales as a slightly questionable act that involved separating people from their money. No self-respecting Ivy League graduate aspired to be a salesman. When I left Harvard Business School, I became a consultant.

I come from a family of brewmasters, and over time I became committed to brewing great beer in America again. I knew brewing and business, but nothing about selling. When every distributor in Boston turned me down, the only way I could get my beer into bars and stores was to sell it myself.

I went to a bookstore, bought the only sales book I could find, How to Master the Art of Selling, and read it. It offered some good ideas, but a lot of it seemed cheesy and manipulative. I read about opening, objection handling and closing. Finally, I walked into a bar and tried to make my first sale. I’m not a “natural salesman,” no one had ever heard of my beer, it cost more than any other brand, and it tasted different. I was scared to death.

Early on, when I made sales calls, I’d introduce myself as the owner of a new brewery that was making Samuel Adams Boston Lager, which tasted unlike anything bars were selling. I’d end my half-minute opening with a question: “Have you heard of it?” When the person said no, I’d pull out a couple of articles that had been written about us, because I had read that third-party recommendations give you credibility. Then I would produce a cold six-pack and some cups from my briefcase and ask if he wanted to taste it. I learned that if I could persuade a person to taste my beer, I had a good shot at making a sale.

On that first try the owner tasted the beer and agreed to buy it for his bar. I was so excited that I left without asking how many cases he wanted. I had to go back the next day to get the actual order. I’ve been walking into bars and selling my beer ever since.

Fast-forward a few decades

Today my company is 28 years old with more than $500 million in revenues and 320 salespeople, but I still spend more time on sales calls than on any other activity except brewing. From my years at Boston Consulting Group, I know how to interpret data on a spreadsheet, but that can’t compare with the knowledge I get from being in the market talking to customers. Most of our ideas for new products come during sales calls.

For example, a year ago I noticed that retailers were carrying more hard cider. I began asking customers who was buying it, what brands and why. Over four or five days in a few cities, I had 40 good conversations about the growing cider market. Statistically, that’s not a lot of data points; but in my experience, if you listen to 40 smart customers, you learn more than you would from any consultants’ study. On the basis of those conversations, we tasted the existing ciders, improved on them and came up with a new brand: Angry Orchard.

I’ve come to see making a sales call as one of the most challenging intellectual activities there is – certainly more immediately challenging than anything I did at BCG.

What it boils down to

The essence of selling is figuring out how what you’re offering will help customers accomplish their objectives – not your objective, but their objectives. Anything else is pointless and self-serving.

When I walk into a bar, I have about 30 seconds to understand the economics of the place: What is its strategy, and who are the clientele? How does it make money? What’s the weakest draft line, and how would sales increase if we replaced it with one of ours? Who’s the decision-maker? Then you need to connect personally. There’s complexity and ambiguity to it, and the selling process, done right, can be lofty and engaging. You gain a much higher quality of knowledge than you can at your desk.

Being a street salesman can be very humbling. You don’t get a lot of positive reinforcement, and you certainly don’t get treated like a CEO. I routinely have bartenders tell me that the manager isn’t in today when the manager is standing 10 feet away. I was once thrown out of a New York City grocery store because the owner saw me removing competitors’ stickers that were blocking Sam Adams. I’ve had a customer pull a gun on me. Selling isn’t for sissies. But even if Ivy Leaguers prefer to talk about marketing and management, sales remains the core function of every company. Without sales, there is no business to manage.

© Harvard Business Review.

This article first appeared on LeadingCompany.

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