Many companies treat sales like an art, but they are increasingly noticing that a scientific approach is more suitable for the sales process. This is where Sales Force Effectiveness and Trade Management approach starts.
Sales Force Effectiveness is a supportive system process, which deals with targeting the right markets, the right products, and the right placement. The methods provide your company with the tools they need to segment the market and determine for the field crew where the greatest potential lies.
In doing so, it is important to establish centralised control while enabling local implementation. On the one hand simple, globally standardised indicators are needed in order to be able to measure sales performance and growth in the targeted regions and markets. On the other, country managers must be given the ability to make decisions and define important parameters such as assortment and placement.
Sales Force Effectiveness breaks this process down into various related measures
Companies are increasingly noticing that growth rates are the wrong target for their external sales forces. Instead, they should be using the implementation of relevant measures that promise better sales rates (i.e. co-placements) as a yardstick. Sales Force Effectiveness takes into account the fact that not every customer or outlet has the same sales-related value. The process breaks down the brand and distribution channels into a few related measures, which the external sales force can then implement in the market. Companies can measure implementation in the market using objective KPIs, in order to avoid subjectivity to the greatest extent possible.
‘Enter a market that is perfect!’ - A lot of companies strive for this and realise it is only possible with a continual process and cannot be achieved with a one-off project.
We can support you in precisely this area with dedicated process know-how and many years of experience in relation to the required system integration.
What will lead to success?
1. Review your distribution channel strategy by identifying markets that promise the greatest profitable growth based on sales, turnover, market share, and returns as well as strategic importance for the brand portfolio.
2. Transfer your distribution strategy to an action plan, which highlights in detail how you can succeed at the cash tills in the targeted market. The plan shows you the most important roles, steps and KPIs, and is equipped with a corresponding budget and a predefined procedure for measuring the KPIs
3. Equip your external sales force with the required mobile devices and CRM systems, which, for example:
4. Define distribution standards by naming markets, which require a higher number of visits due to their potential, e.g. strong markets in which the own brand still has a below-average market share. When equipped with the right mobile device and CRM software, external sales staff will find it easier to develop a market continuously over a number of visits.
5. Monitor the performance of your sales staff by comparing their activities with the defined distribution standards and KPIs.
6. Align your bonus system systematically with the KPIs achieved by the sales force, and motivate your staff with compensation reviews during the year.
If this procedure is comprehensible to you, then don’t delay. Contact us now and find out how we can support you with our industry know-how, technical expertise, structured approach, and reliable implementation. Numerous renowned companies from the consumer goods industry have been placing their trust in us for many years now.
It’s true, these really are challenging times. According to a study from Ernst & Young consumer goods manufacturers now invest around 20 to 35 percent of their turnover in the conditions for trade, the so-called Trade Terms. And this trend is rising. The same applies to activities that manufacturers carry out each year in order to sustainably increase their turnovers.
Trade Terms and Promotions are key aspects for manufacturers when it comes to implementing growth plans, which are usually driven by price. The goal here is therefore to optimise them in relation to the brand and growth objectives. Analysts such as Ernest & Young are of the opinion that consumer goods manufacturers can achieve additional growth potential of 0.5 to 1 percent if they manage to optimise prices, discounts, and advertising subsidies, which in turn would equate to an increase in pre-tax profit of 0.2 to 0.8 percent.
It is therefore definitely a worthy target for consumer goods manufacturers, despite or possibly even because of the protection of the vested rights of retail business, that they generatee transparency in order to answer the following key questions:
According to the latest study from the Promotion Optimisation Institute, around 50% of the companies surveyed think they need to improve the management of their trade promotions. In addition to deficits in relation to cooperation with retail businesses, more than 80% of the manufacturers complain that the process, from the creation of a promotion plan to implementation and execution and ultimately the post event analysis, takes far too long to complete.
And it is precisely here that modern solutions for trade management from leading software manufacturers take action. An annual plan is created for the individual customers based on a top-down and bottom-up process. When creating the plan, the KAM concentrates on the entry of key factors like customer and category growth, listings, and actions that influence the development of the customer. The system merges the entries to form an overall plan that displays sales, turnover, discounts, and conditions separately based on the baseline and uplift. It highlights the changes compared with the previous year and provides the ability to simulate and compare different scenarios with one another. In our latest projects, our customers have also been asking for a presentation (in addition to a company’s own view of the plan), which they could use when negotiating with their customers.
The basis for such a plan is an in-depth understanding of the impact of previous promotions and the tactics that were used. And this is only possible if the outgoing sales data – which can be obtained from market research, scanner data, online shops, loyalty programmes such as Payback, etc. – is integrated and viewed together with incoming sales data (deliveries and invoices).
Solutions for Demand Signal Management can assist here, which can handle the complex task of data integration from external sources and the provision thereof to the users in the relevant departments. Statistical procedures are then used for the quantitative analysis of the data and the calculation of forecasts in relation to the target sales levels.
On the basis of these findings, you will be able to look to the future with confidence. Let us advise you in all areas and determine, introduce, and implement the most appropriate solution. In doing so, you can rely on our many years of industry, process, and IT system integration experience. We are experts when it comes to large, extensive solutions as well as compact, light solutions. Our PSA4Sales Tool (PSA=Planning, Simulating, Analyzing) PSA=Planning, Simulating, Analyzing), which we developed in-house, allows you to change or get started simply and quickly.
So don’t hesitate, today!