Punching Holes

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I did manage to rip myself away from the TV yesterday and get some work done, but Michael Cohen’s testimony was so riveting that it wasn’t easy. My favorite story of the day was the one about Donald instructing him to find a fake buyer for the Trump portrait being auctioned in the Hamptons, and then reimbursing him for the $60,000 out of charity funds later on. Why was that particular anecdote my favorite? Mostly because it reminds me of Arrested Development, where Lucille Bluth pays her son Buster to bid on a date with her at the charity auction. However, it’s also a telling look at how the booze business often operates.

We read about a particular brand of whiskey posting sales growth year over year, but what the average consumer doesn’t understand is that those numbers represent distribution sales to bars and restaurants; aka case depletions. What those numbers do not represent are bottles sold to actual customers, or sales rung up over the counter. Why is that important? Because sometimes cajoling an account to buy more whiskey isn’t all that different than the story we heard yesterday about our president. I’ve seen suppliers grease the wheels in all sorts of different ways, often spending more to make the sale than the profit from the deal actually justifies. Later, they’re bragging online about their “growing popularity.”

I have to wonder if the owners of these companies know or care about the artificial “success” of their brands. Because if you’re basing future investments on numbers that may be skewed in terms of their representation, you’re playing with fire. Let’s put it this way: if you’re a rock band out on tour, and you’re paying people to come see you, rather than the other way around, you’re not successful. Yet, imagine that there was a chart that showed the most popular groups by crowd size, using that number to measure popularity, and promoters and tour managers continued to book venues and appearances based on those statistics! That’s kind of the same thing. Actually, better yet: when you see a Twitter account with 50,000 followers, but you notice that almost all of their tweets garner only a handful of likes and retweets. Why would someone with so many admirers get so little social media participation? Could it be because they paid for all those followers?

Data is an important indicator of how one should run their business, but it only provides value when the numbers are pure. Sales numbers only represent demand when they’re based on actual consumer interest. I remember being a kid and having to sell candy bars to help support my little league baseball team. I actually went door to door and sold them by hand, but other kids just had their parents buy the entire box and gave themselves a pat on the back. If you think things like that don’t happen in the booze business, well…

-David Driscoll