Supply Chain Blog

Improve Your Key Account Management Approach with these Vital Tips for Route to Market Success

Posted by Ross Marie on Thu, Jan 31, 2019

Key Account Management (KAM) is how Route to Market (RtM) leaders effectively and efficiently manage the relationship with specific and strategic customers, or customer groupings, to deliver on RtM targets.

 

key-account-management-rtm-3-webCustomers are classified as Key Accounts based on a variety of reasons. For example, it could be because they have a large numbers of retail outlets all branded under the one name. It could be that they operate several bars and restaurants, that are of key importance for delivering your RtM Targets. Your wider organisation may also mandate that specific global customers are treated in a certain way. There could also be dozens of market specific reasons why you might assign a customer(s) as a Key Account.

Regardless of why a customer is assigned to KAM, the important issue is, how they are managed, how the relationship is nourished, how their growth plans are implemented and how they are serviced across our organisation. The central element to KAM is relationship.

Success in KAM Management requires careful consideration, especially if you are either new to the concept of KAM, or if you feel your organisation is not doing it right.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 16 steps of my model. The focus of this post is Step 17 ‘Key Account Management (KAM)’.

Here are some examples of questions you can ask when reviewing, developing or building your Key Account Management (KAM) department or approach:

  1. Based on the RtM Strategy chosen on Step 5 and the Channel Classification in Step 7, what is our desired approach to Key Account Management?
  2. On what basis do we determine that a customer falls into the KAM arena? Is this based on size, current performance, volume, uniformity, number of outlets, ownership of outlets, location of outlets, strategic importance, etc.?
  3. If the customer has a KAM classification in other markets that we or our parent company operate in, does that have a bearing on our local classification?
  4. Will we have different levels of KAM classification? For example, should we assign the label of ‘National Accounts’ to our larger national hypermarket retailers, who have a presence across our market? Or might we assign the label of ‘Key Accounts’ to some regional larger retailers who have multiple stores in one area of our market?
  5. Where does Channel Management fit into KAM? Will we classify our business or customers into Modern Trade and Traditional or General Trade? Will KAM sit into one or both of these channels?
  6. What proportion of our overall business is Key Accounts (as opposed to the Traditional or General Trade)? How to we expect this proportion to develop in the coming years? How will this shape our approach to KAM?
  7. Will there be a RtM manager who has overall responsibility for Key Accounts regardless of which Channel, Area or Region the Key Account is in?
  8. What might this RtM manager have responsibility for? For example, would they manage and be responsible for volume, display, product range, training, strategic approach, relationship, negotiation, reporting, targeting, budgets, etc.)?
  9. Based on our Competitor Analysis in Step 4, how does our competition view KAM? Are there any learnings for us in their approach, or does their approach change our own?
  10. Do we treat all Channels and/or Key Accounts in the same way? For example, will the distributors and cash and carry’s or wholesalers in one region of the country be managed differently than in another? Will this be reflected in the structure? Would the distributors in the North of country be managed by a Key Account Manager who reports to a RtM Manager with responsibility for the North?
  11. Are we clear about the types of individuals who will manage or become Key Account Managers? Do we have specific criteria? What is it? Have we properly weighted the importance of relationship building in looking at individuals?
  12. Where does Key Account Management sit in the organisation structure? What is the relationship between KAM and the RtM field force who potentially manage and call on the individual outlets? How is communication managed between the two? In practice, do they really talk to each other or limit themselves to mandated reporting and communication?
  13. Are we clear about the levels of importance of each channel or Key Account? Have we taken into account all RtM Targets, including strategic importance to us? Have we looked at this importance/power angle from the side of the customer? How important or necessary are we to them? How does this feed into negotiation?
  14. Do we have detailed Key Account Plans for each account? Does this clearly detail what our objectives and targets are for each account? Have we worked with the account in developing these? Have we worked with the internal stakeholders who will and can influence these? Do we simply want engagement with the account, or partnership, or preferred partnership, or exclusivity? Have we looked at previous years plans and taken learnings from them? Do we include what our individual account’s future plans or aspirations are?
  15. Do our Key Account Plans cover all areas of engagement between our two organisations, for example top to top meetings, Key Account reviews, wider RtM team interaction at customer level (e.g. retail or distributor), corporate entertainment/relationship building, order placement, deliveries, feedback on promotions, information sharing (e.g. sales/EPOS data), authority/empowerment, invoicing, seasonality factors, etc.?
  16. What is our approach to negotiating Key Account Agreements? When will they be negotiated? Who will be in the room from our side? Who has the authority to negotiate and to agree?
  17. What happens in the event of a stalemate or breakdown during Key Account agreement negotiation? What will the layers of escalation be? What is our approach to negotiation training?
  18. Do we have a full negotiation strategy per Key Account covering all elements of the agreement and estimated potential scenarios? Has this been agreed and signed off by all stakeholders?
  19. How are we currently rewarding or incentivising Key Accounts? What is the current reward mechanism, e.g. rebate, discount, payment etc.? Is it based on volume or revenue or profit or other RtM targets? What is the potential role of Third Degree Partnerships (3DPs) here?
  20. What role does margin play in our relationship with our Key Accounts? Do we have the control to set it? What are the internal and/or external factors that may affect our ability to set our pricing and margins?
  21. How do we manage and control Key Account investment? Who manages this? How do we determine levels of investment per Key Account?
  22. What payment terms do we operate across our RtM? How do payment terms fit into KAM? Do we have specific payment term targets, by account, by region, by channel, by customer? Do we have the mechanisms in place to facilitate the different forms of electronic payment? Do we have minimum acceptable payment standards? What is our overall approach to payment terms in relation to KAM?
  23. Which of our Channels and Key Accounts are growing? Which are declining? How is this reflected in our overall strategic and individual approach to KAM?
  24. How do we capture learnings across KAM? Do we have a process for capturing success in one account and replicating it in another?
  25. What is our overall approach to KAM? What is our implementation plan for rolling this out?

I hope you find this useful, and any views and comments are most welcome.

Next, I will cover Step 18 ‘Training & Upgrading’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Promotions, RTM, Retail, Information, Compliance, RTM Assessment Tool, Distribution, Sales, Cost Reduction, Performance Improvement, Traditional Trade, S&OP, Route to Market, FMCG, Brewing & Beverages, SKU, Customer service

Form Lasting Alliances with Key FMCG Customers at Almost Zero Cost, How? - Third Degree Partnerships (3DPs)

Posted by Ross Marie on Mon, Jan 28, 2019

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the detail of the first 15 steps of my model. The focus of this post is Step 16 ‘Third Degree Partnerships (3DPs)’.

Step 16 represents a different concept and approach to motivating your customers to want to deliver on your targets. I hope it is helpful, and I welcome any feedback. So, what are Third Degree Partnerships (3DPs)?

incentives for fmcg customers with third degree partnerships in rtm

Third Degree Partnerships (3DPs) are where a Fast-Moving Consumer Goods (FMCG) company identifies its customers key issues, costs or constraints, and then forms a partnership with a service provider who can solve them for the customer, at a significantly reduced cost.

The benefit for the customer is access to cheaper services. The benefit for the service provider is access to more customers. The benefit for the FMCG company is the ability to use the provision of a 3DP service as if it was a trading term or key account payment to the customer, with almost zero cost.

In short, we identify our customers key issues, we then identify a service provider who can solve them, and we use our size and clout (maybe even our global reach?) to negotiate a much-improved price or access to the service for our customers. We then decide what we want in return for providing our customers with access to this 3DP club.

What would we want in return? Examples include, product listings, exclusivity of some form, increased product range, pricing or other promotions, improved display, minimum volume targets, brand dialogue, use of a new distributor, access to a territory, etc.

Why would you use 3DPs instead of a cash payment or discount? Several potential reasons. For example, maybe you have significant pressure on Route to Market (RtM) budgets and need to spend less in the key account or customer payments area. Maybe you need access to a new strategic channel and the costs of entry would eliminate profitability. Maybe you are facing pressure and need to boost sales but have no budget for promotions. Maybe you are facing significant competition and need a fresh approach to work with certain customers.

Think of 3DPs as a type of rewards club for our customers. They may require time to set up but have little associated cost for us as FMCG leaders, provided we do the ground work.

Here are some examples of questions you can ask under Step 16 ‘Third Degree Partnerships (3DPs)’:

  1. Based on the Channel Classification in Step 7, what are the different segments of customers in our market?
  2. Looking at each customer segment, which are the most appropriate or suitable for 3DPs? Where will 3DPs have the most potential value or be the most valued?
  3. Would there be a greater applicability in the less organised General Trade versus the more organised Modern Trade, for example?
  4. Do we feel providing our Horeca owners with access to reduced cost services will be as beneficial as providing reduced cost services to international retailers?
  5. Could the customers in question get access to these reduced cost services themselves? If so, why have they not done so? Is there still a value in these services?
  6. Is there any specific channel in which we are under-performing? What are the reasons for this? What are the defining characteristics of the channel? Could a 3DP help us here?
  7. Have we included and looked at the specific geographic issues, challenges and nuances within our specific market, to map out our local customers’ challenges? For example, the islands of Indonesia, the congestion in Bangkok, the vast geography of African countries, the severe temperatures in Russia, to name a few?
  8. Considering each customer segment, what are the customers’ key issues, costs or constraints? In other words, what are the problems our customers are facing for which we could provide solutions?
  9. Looking at each of these key issues, costs or constraints, can we identify service providers who can solve these?
  10. Are these potential service providers local to the market? Is there a potential for us to bring in external suppliers to the market? Would we want to do that? Does that create more issues for us in setting up the 3DP or does it make the 3DP more powerful?
  11. Can bringing in external service providers as part of a 3DP create barriers to entry for our competition and barriers to exit from the 3DP for our customers?
  12. Are there particular services that we, as an FMCG company, benefit from, that we can in turn provide to our customers through 3DPs? Can we use our size and scale to negotiate a package or price and offer access to our customers in return for something?
  13. What services might we offer as a 3DP? For more inspiration, download our Implementing Third Degree Partnerships (3DPs) in Route to Market Guide here.
  14. Have we prioritised the potential services that we may offer as part of our 3DPs? Have we ensured that the 3DP programme will not reduce focus from achieving our RtM targets but instead assist with them?
  15. Have we looked at why we would use a 3DP instead of another incentive? Have we detailed what we would ask for in return for access to a 3DP?
  16. How will the 3DP programme be managed? Will key accounts manage the programme? Will we require additional resources in the RtM function to do this? Must this be done on a national level or will we allow regional implementation?
  17. Have we involved our legal colleagues in the contracting process to make sure there is no exposure for us from the services provided by the service provider(s)?
  18. Have we conducted a risk assessment to look at any specific local or other issues that may affect the 3DP programme?
  19. Taking all the above into account, what would the overall 3DP programme look like?

I hope you find this useful, and as I said, views and comments are most welcome.

Next, I will cover Step 17 ‘Key Account Management (KAM)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

 

3rd degree partnership download

 

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Promotions, RTM, Retail, Communication, Doing Business in Africa, RTM Assessment Tool, Distribution, Sales, Cost Reduction, Performance Improvement, Traditional Trade, Route to Market, FMCG, Brewing & Beverages

Beat the FMCG Competition with an Outstanding Distributor Partnership Programme

Posted by Ross Marie on Fri, Jan 18, 2019

A Distributor Partnership Programme, if designed and implemented correctly, can be one of the most powerful tools in the Route to Market (RtM) armory for delivering sales growth.

distributor-partnership-programme-webA Distributor Partnership Programme sets out which individual distributors or distribution network(s) you will work with. It details, ideally within individual simple Distributor Development Plans, how you will work with them, what specific areas they need to improve on, exactly what they need to deliver and what is in it for them. All of this will be done with the back drop of the specific market you operate in, set against agreed timelines, and the programme must map out a win/win for all sides.

The Distributor Partnership Programme works best as part of an overall RtM improvement plan, but at the very least needs to be coupled with Distributor Assessments, which I covered in an earlier post. Once we have assessed what we already have/what is out there, we can then decide who, and on what basis, we want to partner.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 14 steps of my model. The focus of this post is Step 15 ‘Distributor Partnership Programme’.

Here are some examples of questions you can ask under Step 15 ‘Distributor Partnership Programme’:

  1. Based on the RtM Strategy & the 4D Approach chosen in Step 5, what is our DIME approach for our Route to Market?
  2. What is a reasonable expectation of our distributors? Have we defined exactly what this is in terms of process and performance? Have we included sales processes, logistics performance and back office performance? How do we measure this?
  3. Based on the Distributor Assessment in Step 3, how many of our current distributors do we want to continue to work with? What is the minimal size of a viable distributor, including the ability to fund any required investment? What is the optimum number of distributors? What is the current contractual arrangement with our current distributors?
  4. How many of our current distributors are we looking to end our relationship with? Upon what basis can we make such a judgement? What is the current contractual arrangement with them? What is our approach and plan for ending this relationship? Will there be financial or other implications to ending any relationships?
  5. Have we conducted a risk and continuity of supply assessment? Have we included factors such as resource (specifically cost), product supply, politics, competition, timing, future relationship, perception, etc.?
  6. Will we look to engage with any new distributors? What criteria will we use to make these decisions? Who are these new distributors? What is our engagement plan with them?
  7. Are we currently operating on an exclusive distribution system? If not, is that something we have identified as a priority going forward? If not, how will we manage potential conflicts that could arise?
  8. Have we considered the output of our Competitor Analysis in Step 4? What impact will this have on, for example, looking at distributor exclusivity, starting and ending relationships, distributor development plans, etc.?
  9. Based on the Distributor Assessment in Step 3, what does our ideal or model distributor look like? What criteria are we using to create this ideal distributor? Have we taken local geographic, technological, political and economic conditions and nuances into account? What does the Balance Sheet of a Model Distributor look like?
  10. Based our RtM targets identified in Step 5, and looking across all of our distributors, existing and new, what will the Distributor Development Plans of each distributor look like?
  11. Will the Distributor Development Plans include areas of, for example, geographic coverage, number of vehicles, availability of data, inventory levels, reporting, calls per day, steps of the call, route planning, flexibility (e.g. new brand launches), brand distribution criteria, point of sale material placement, planogramming, display, brand dialogue, promotions, pricing, product returns/complaints, retailer engagement, to name a few?
  12. Out of these Distributor Development Plans, do we have a simple specific strategy for each distributor – e.g. defend / increase market share, improve selling processes, develop or expand van selling etc.?
  13. What will our partnership programme look like? What criteria will we use and how will this be measured? Will we categorise distributors into different performance categories? If so, what will these categories look like, how many will we have and how will this be measured?
  14. What will the rewards in the partnership programme be? Will we use a discount system, a rebate system, a prize-based system, a combination of these, etc.?
  15. Have we considered budgetary factors? Will this be self-financing through volume gains? Have we mapped out the success of different scenarios to fully uncover maximum cost exposure?
  16. Will we differentiate distributors based on, for example, size, volume, market share, reach, coverage, reporting, data, access, etc.?
  17. Will this be a national programme? Will we need a pilot in one region for example? Will we allow geographic nuances and differences to be considered? Will here be any effect on headcount in the RtM team to support the programme? Will we need specific Distributor Development roles, or will these activities be accommodated in BAU?
  18. What will the training programme be for our key account and RtM team? What is our roll out plan for this?
  19. Have we developed new SLAs or key account agreements to take account of the above?
  20. All Distributor Programmes should increase sales and market sharer, so what expectations do we have for our programme?
  21. Based on all the above, what is the implementation & engagement plan for the Distributor Partnership Programme?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 16 ‘Third Degree Partnerships (3DPs)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Promotions, RTM, Retail, Inventory Management & Stock Control, RTM Assessment Tool, Distribution, Sales, Logistics Management, Traditional Trade, Route to Market, FMCG, Brewing & Beverages, SKU, Customer service

How to Master Technology in Route to Market Strategy to Save Resources and Fuel Sales

Posted by Ross Marie on Fri, Jan 11, 2019

When we discuss Technology in terms of Route to Market (RtM) Strategy we are looking at our overall approach to and use of Technology at every stage of our RtM Strategy and Execution.

rtm-technology-webThis includes, for example, the hand-held system we take orders on, the ERP system the company uses, the tracking method we have for targeting the RtM team, the way we measure and track our key account agreements, how we optimise our route planning, and everything else across the RtM space.

The key in many cases will be minimising the number of systems we use, facilitating their integration, ensuring their simplicity and allowing them to minimise human intervention.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 13 steps of my model. The purpose of my blog series is to stimulate your thought processes around RtM, and to allow a moment to think and to ask some key questions. The focus of this post is Step 14 ‘Technology’.

Here are some examples of questions you can ask under Step 14 ‘Technology’:

  1. Based on the RtM Review in Step 1, what is our current approach to and use of Technology across our Route to Market?
  2. What is the Systems Landscape operating across our RtM function? To what extent are the systems integrated?
  3. Do we use an ERP system? Is this linked to any other RtM systems? How does this integration work? Have we adopted systems that are no longer fit for purpose?
  4. Do we get distributor, customer or third-party sales data? If so, what do we do with this? Is this fed into our own RtM system? Can we measure and report on this? What manual intervention is involved?
  5. What is our use of spreadsheets across the RtM function, including strategy, execution, monitoring and reporting? How many different departments are using them? Have we looked at this aspect in the past and what view did we take at the time? To what extent are we managing the risks associated with spreadsheet usage?
  6. What is the current order capture method? Do we use a CRM? Do we use a hand held, tablet or phone? If so, what is their current ease of use and performance? How integrated is the order capture method into the overall company system(s)?
  7. What systems for we use to monitor the performance of our RtM representatives? For example, do we know how many calls they are doing per day, what their location is at any given time, what their stock levels are, etc.?
  8. Do we track our distribution and RtM vehicles electronically? If so, what do we do with the data?
  9. Do we have a solution for setting and monitoring our RtM targets? Is this automated and integrated into our overall RtM system?
  10. How do we measure product display across our retail, Horeca and customer network? Is there a technology solution for this?
  11. How do we track, monitor and report on compliance to customer agreements, whether they are national trading terms with key accounts, of single store contracts?
  12. Do we have any connectivity constraints in our marketplace? Does our RtM team have access to mobile/cellular data across the country or does connectivity wait until the end of the day? How does this impact on our approach to Technology?
  13. Do we use RtM data analytics across our RtM? If so, what do we do with the data? If not, have we looked at this in the past? What are our next steps for RtM data analytics?
  14. Do we have a solution for capturing cost to serve data across the RtM? Is this a simple automated process or does it require manual intervention? If so why? What are we doing with this information?
  15. To what extent do we use technology to set up sales territories and look at route planning? If not, why not? If we do use Technology here, what have the results been?
  16. What is the current amount of time our RtM team spends using technology? Is this what we want and expect? Is this the best use of the RtM team’s time or have we over complicated any process?
  17. Do we use social media and other form of digital marketing for RtM? Does it form an integrated part of our RtM strategy or has it been deployed in silo from other RtM initiatives? What have we used it for and what have the results been? Who in the organisation uses social media for RtM? Do we have a clear strategy and guidelines in place for the use of digital tools?
  18. Do we train our RtM team on all aspects of Technology that we use in RtM strategy and execution? Is it very clear which aspects of Technology are ‘in scope’ and ‘out of scope’ for certain roles/departments?
  19. Does our RtM team currently employ workarounds due to current system set up?
  20. What are the current technology gaps in our RtM? Where are the manual processes that need to be automated? On the other hand, are their examples where we are over complicating an area or issue for the sake of technology?
  21. Given all the above, what is our overall Technology plan across the RtM, Sales and/or Trade Marketing and Distribution function?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 15 ‘Distributor Partnership Programme’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, ERP, Promotions, RTM, Retail, Information, RTM Assessment Tool, Distribution, Sales, Cost Reduction, Traditional Trade, FMCG, Brewing & Beverages, SKU, Route to Market

Realise Route to Market Excellence with a First-Class Trade Incentive Programme

Posted by Ross Marie on Wed, Dec 19, 2018

What are Trade Incentive Programmes (TIPs)? TIPs are the mechanisms that you put in place to incentivise and encourage your trade partners (e.g. retail, distributor, cash & carry, wholesale, Horeca) to engage with and deliver on your Trade Marketing & Distribution (TM&D) and/or Route to Market (RtM) objectives.

trade-incentive-programme-for-rtm-success

TIPs can include what may traditionally be associated with key account agreements, like sales volume discounts, or sales volume rebates. But they should also encompass so much more.

Whilst sales volume may be one of the most important KPIs, incentivising on it alone, or being too reliant upon it, may be counterproductive in the long term. For example, we may encourage certain customers to forward buy, thus bringing sales from next month or next period into this one, and therefore costing us more now, in terms of higher incentives, poor productivity and increased overall supply chain costs.

But focusing our TIPs on the individual trade marketing objectives (the building blocks of sales volume), can really help us to engage with and become partners of the FMCG trade, both with the owners, and in many cases more importantly, their staff.

A well thought out TIP can start to create real trade partnership with our company, encouraging and motivating those who want to work with us for mutual success, rather than customers who simply expect a discount.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 12 steps of my model. The focus of this post is Step 13 ‘Trade Incentive Programme (TIPs)’.

Here are some examples of questions you can ask under Step 13 ‘Trade Incentive Programme (TIPs)’:

  1. Based on the RtM Review in Step 1, what are the current TIPs we have in place? What have their results been?
  2. To what extent does our TIP accurately reflect and support our channel strategy?
  3. Who are the current TIPs focused on? Who within the trade are they incentivising?
  4. Are the current TIPs focused on, for example, the owners of a retail chain, on the managers or operators of the retail stores or do they focus on the staff?
  5. Do we operate different TIPs based on whether the outlet is owner operated or managed by the owner’s staff?
  6. Do we have a different TIP approach based on channel? If so, what is that approach and how do they differ?
  7. What are the current TIPs trying to deliver? Are they based on volume, on achieving a target, on running promotions, on brand knowledge, on brand range, on product presentation, on pricing, on display, on exclusivity, on anything else?
  8. What incentives do we offer in these TIPs? Have we had the same incentives in place for a long time? Have we asked the target audience if they have any views on our incentives?
  9. What TIPs do our competition use? To what extent have they achieved success with them? Is there anything we can learn from their TIPs?
  10. How are our TIPs measured? What does success look like? How do we measure their usage by the TM&D team, their implementation, their success? Do we use mystery shopper programmes?
  11. Do we receive data from our trade partners on the implementation and results of TIPs? Is the receiving of data a condition of the current TIP?
  12. Who coordinates TIPs? Is there a centralised approach? Do we have a policy and an agreed process for TIPs? Do we have a key accounts department? Do they have control or oversite of TIPs or do they keep focus to key account agreements and trading terms? Where do these cross over and how is this managed?
  13. Who implements TIPs? Is it done centrally at HQ, is it done by channel, by key account, by region?
  14. Can a trade marketing representative or territory manager implement and run TIPs in their own patch? If so, who coordinates that approach?
  15. Are TIPs used to create and foster a culture of empowerment across our TM&D/RtM teams? Are we capturing the learning from TIP successes in one geography to allow us to roll this out to others?
  16. Do we have the ability to test market our TIPs in specific geographies?
  17. Who holds the budget for TIPs? How is it controlled and managed? Is it one central budget or, for example, split up by geography or by channel?
  18. Can a TIP be run at a local level in a modern trade outlet where there is a central key account approach? If not, then why not? If yes, then how is this managed? What is the link to key accounts? Is there an agreed process and communication set up?
  19. How does the above inform our approach to future TIPs? What is our overall approach to TIPs and their management?
  20. What will our TIP training needs be and how will this be translated into our training programme?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 14 ‘Technology’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Promotions, RTM, Retail, RTM Assessment Tool, Distribution, Sales, Traditional Trade, Route to Market, FMCG, Brewing & Beverages, Customer service

Empowering Sales People with the Right Trade Tool Kit Can be Spectacular

Posted by Ross Marie on Fri, Dec 14, 2018

Firstly, what are Trade Tool Kits? They are the specific commercial tools and materials that we provide to our Trade Marketing & Distribution/Route to Market (RtM) teams to help get their jobs done and to deliver on their targets. They are the trade incentive schemes, CRM systems, planograms, promotions, budgets, pricing initiatives, trade samples, etc. that they will implement, create, manage and report on.

fmcg-sales-toolkit-web

They are shared across the Trade Marketing & Distribution Team (TM&D Team). The TM&D Team in this case can include the Trade Marketing, Distribution, Sales, Merchandising, Promotions, Horeca, Events, Key Account, Customer Service and Telemarketing Representatives.

Much of the focus of Trade Tool Kits will be around providing “stuff” that the TM&D Team can “put” in the field to increase sales. But Trade Tool Kits can be so much more. They can effectively harness the creative power of every member of the TM&D Team by empowering them to look at, and examine, what they believe might work for their customers in their geography. Trade Tool Kits can be used to foster a culture where we believe in our TM&D Team and want them to contribute. I have seen this first hand and it can be amazing. This does not take away from the ABCs of what a Sales Rep should and must do, but maybe they can do more?

In summary, Trade Tool Kits can be the difference between an average TM&D Team and a Great one.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 11 steps of my model. The focus of this post is Step 12, ‘Trade Tool Kit’.

Here are some examples of questions you can ask under Step 12, ‘Trade Tool Kit’:

  1. Based on the RtM Review in Step 1, what are the current Trade Tool Kits we have in place?
  2. Are the TM&D team empowered to conduct their own promotions & trade incentive programmes?
  3. Does the TM&D team have a specific budget for in field promotions or events? How is the monitored and measured? Has training been given? How is success captured and replicated?
  4. Can the TM&D team run local territory incentives with selected customers? Do they have guidelines or training for this?
  5. Does the TM&D team launch, manage and/or implement pricing initiatives? If so, what controls are in place for this? Can they be done on a territory/area or regional basis or is this a national implementation? What materials are provided to the TM&D team for this and how are they managed and tracked?
  6. Do we differentiate trade engagement with owners from trade engagement with staff or operators? Do we see any difference? Have we trained our TM&D team on trade engagement?
  7. What Point of Sale (POS) material does the TM&D team have to place? Do they have guidelines on placement, duration, how to record placement, how to record effectiveness? Are we in regular contact with colleagues in Marketing to refresh and provide feedback on POS material?
  8. Does the TM&D team have or use planograms? Have they been trained on these? How to they monitor or record instore display? How often are they updated?
  9. What is the order capture method? Do they use an electronic method? What tools have the TM&D team been given to monitor their accounts? Are these tools well understood?
  10. Does the TM&D team have a CRM solution? Is this common across all roles? Does management have real time access to the CRM tool, its data, and its ability to set and monitor tasks?
  11. Does the TM&D team have laptops or tablets for use in the field? Does the TM&D team have access to customer data with the ability to conduct business and performance reviews? Have they been trained to do this? Is this a role requirement, is it encouraged, or does it fall out of scope?
  12. Does more than one member of the TM&D team share responsibility for a customer or group of customers? If so, what are the rules or guidelines in place for this? How does this effect the use of trade tool kits?
  13. Who in the TM&D team deals with customer complaints? How do we capture and monitor complaints? Can we report on resolution?
  14. Who in the TM&D team opens new accounts? Is there a clear process and system for this?
  15. How do credit limits get set for each customer? What tools are in place to monitor and inform the TM&D team?
  16. Does the TM&D team get involved in invoicing or payment collection? Do we accept cash? If so, what is our process for this and how effective are controls? Do we provide tools for this?
  17. Do we provide product samples to the TM&D team? Is this on a regular basis? How are they monitored or controlled? Are the TM&D team given additional samples at any time, e.g. around specific promotions or brand launches or events? If so, how are these monitored?
  18. Does the TM&D team accept, manage or control product returns? If so, what is the system in place and what are the tools for doing this? What is its effectiveness?
  19. Do the TM&D team place promotional assets and /or merchandising material in the field, e.g. display units, fridges, coolers, electronic displays, branded furniture or items, etc.? If so, how are they managed, tracked and recorded?
  20. What is your overall approach to trade tool kit management?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 13 ‘Trade Incentive Programme (TIPs)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Promotions, RTM, Retail, Order to Cash, RTM Assessment Tool, Distribution, Sales, Traditional Trade, Route to Market, FMCG, Brewing & Beverages, Customer service

A Crystal-Clear Sales Incentive program is Fundamental to Route to Market Success

Posted by Ross Marie on Thu, Dec 06, 2018

When I say Sales Incentive Program (SIP) in the Fast-Moving Consumer Goods (FMCG) sector, I am referring to the internal company incentive program that is used to motivate and influence the behaviour of sales people and teams to deliver company specific results. This is not to be confused with a Trade Incentive Program, designed to motivate Retailers or Distributors or other Trade Partners.

SIPs in the FMCG sector are crucial in the delivery of Route to Market (RtM) goals. The old adage is true, what gets rewarded gets done. But is it that simple? Well, no. Putting a SIP together can be a minefield unless all the bases are covered. Let’s dig a little deeper.

sales-incentive-program-fmcg-rtm-webWelcome to my blog series on the 20 Steps to Route to Market Excellence model. I am writing this blog to offer guidance on the things that should be considered when putting a RtM strategy together. Over the past number of weeks, we have gone through the first 10 steps of my model. The focus of this post is Step 11, ‘Sales Incentive Programme’.

Here are some examples of questions you can ask under Step 11 - Sales Incentive Programme (SIP):

  1. Based on the RtM Review in Step 1, is there a SIP in place? If yes, what is the current SIP? How is it performing? What were the key factors that led to any past successes?
  2. What does the current SIP measure? How is the performance of the sales people measured and what are their targets?
  3. To what extent are we targeting volume, revenue, profit, share, brand distribution, display, range, TM&D activities, point of sale material, promotions, new accounts, new brand introductions, out of stocks, cash in, etc.? What are the top 3 or 4 metrics that we currently measure? How would this be used in developing any new SIP?
  4. How do we currently assign targets between the different Regions, Areas, Channels, Territories, Key Accounts, etc.? How will this be done in the future?
  5. Is the current program complex and difficult to understand or administer? Or is it simple, easy to follow and understood by all?
  6. How attainable are the rewards in the current SIP and how will this inform any new programme?
  7. Is the current programme based on short terms incentives, e.g. monthly or quarterly, or is it based on longer term, annually or 3 yearly? How will this influence any revised programme?
  8. How achievable is the current SIP? To what extent are targets achievable? Does it favour a small group within the sale force? How will this knowledge be used to develop any new programme?
  9. Based on the new, revised or reviewed RtM approach, what measures will we use in future for our sales/RtM department?
  10. How will we report the new SIP? What method of reporting will we use and what will the frequency be?
  11. Will we operate a leader board system where every sales person knows where they rank? Will sales people have real time visibility of their and others performance?
  12. What are the primary motivating factors within our organisation, country, culture, etc? Are they financial, recognition, skill acquisition, team based, career progression, etc.? Are they a mix of them all?
  13. If we choose a financial route, will it be a percentage of the sale, their salary, the monthly revenue, a fixed amount? Have we considered using a physical item equal to the value of the financial reward as the incentive? Would a personal item that the sales person keeps in their home be more rewarding than cash?
  14. Will any targets and rewards be individual, or team based and how does this reflect how the sales people actually work in the real world?
  15. What will be the elapsed time between achievement of an incentive and the attainment of the reward? Could we lose motivated sales people through extended time lapses?
  16. Have we ever asked our sales people for feedback on the current SIP? Have they ever been asked how they would change or structure a programme? Do we know what motivates them? Have we directly asked them what they want as an incentive?
  17. Will managers have the ability to adjust sales targets or quotas based on specific factors? Will there be a need for a process for this? If so, what will the process look like?
  18. How will any new or revised programme be ‘sold’ into the organisation? How will we achieve, and measure buy-in?
  19. Has any new SIP been tested and modelled before rolling out?
  20. Based on the above, what will the new SIP look like?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 12 ‘Trade Tool Kit’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Promotions, RTM, Retail, RTM Assessment Tool, Distribution, Sales, Traditional Trade, Route to Market, FMCG, SKU

The Right Data and Metrics are Vital for FMCG Route to Market Success

Posted by Ross Marie on Thu, Nov 29, 2018

For a successful Fast Moving Consumer Goods (FMCG) Route to Market (RtM) Strategy, we must be able to measure our performance across the market, internally within the company and externally against the competition and wider benchmarks. We must be able to measure the full spectrum of our RtM Targets, for example, our own sales performance, brand/SKU distribution, new product introductions, volume, revenue, mix, share, displays, in-store facings, pricing, promotion performance, payment terms, merchandising equipment & Point of Sale (POS) placement, visits, etc.

essential data and metrics for rtm strategy successWe must be able to do this by territory, by area/region, nationally, by channel, by sub-channel, by key account, by distributor, by retail group, etc. We then need the ability to easily compare these measured results against our targets, our competition and any other benchmarks. We must have the functionality to do this historically, against the current performance and against future targets.

The goal here from a RtM standpoint is to get as detailed, reliable and up to the minute information as possible, to allow us to take corrective action against problems or to recognise success as early as possible to spread it far and wide.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Some of you reading this may have gone to ‘Mr Google’ for some help. What I am trying to do here is to point you in the right direction to create an amazing RtM strategy.

Over the past number of weeks, we have gone through the first 9 steps of my model. The focus of this post is Step 10, ‘Data & Metrics’.

Here are some examples of questions you can ask under Step 10 – Data & Metrics:

  1. Based on the RtM Review in Step 1, what is the data that is currently available to us?
  2. What are the performance measures that we are currently measuring against?
  3. What are our current data requirements, in absolute terms and in terms of data capture and maintenance?
  4. Based on the RtM strategy we have chosen what are the likely future data requirements?
  5. To what extent are there any specific areas we need to measure based on external factors (e.g. wider organisation requirements, legislation, regulations, brand launches, restructures, etc.)
  6. Do we currently receive data from our distributors, our retailers, our key accounts, any other customers or partners? What is the data – e.g. sales, stock, etc. If we do, what are we doing with it? If not, is this possible in the future? Have we tried to get it in the past?
  7. Is the data that we will look to measure currently available in the marketplace? Do we need to pay for it? Do we have it internally within our own systems?
  8. If we do not have the data available, will we be able to use a third party to provide it?
  9. Do we currently measure our levels of display, facings or adherence to planograms in the market? How do we do this? How effective it the measurement and our adherence?
  10. Do we have an existing Revenue Management Model? If so, what does it measure? Does our model capture the difference between pricing, mix and volume changes?
  11. Do you have volume that is moving from the traditional trade to the organised trade and eroding margins? Does our Revenue Management Model capture this?
  12. Are our Trade Discounts out-pacing our sales growth? To what extent are we capturing this?
  13. Do we have a cross functional approach to revenue management? Are sales, supply chain, marketing, trade marketing all involved in the process? Are we feeding this information into the correct departments for action?
  14. Which department controls pricing and promotions in our organisation? Is it part of the RtM function and how will it be measured, and the information captured?
  15. Is the current Revenue Management Model fit for purpose? If not, what might a new model look like?
  16. What systems are we using to measure all of this and keep track of performance? Do we have an infield CRM or hand held linked to a back-office system? Can we generate reports with ease or do we have information on spreadsheets? Do we have a system to consolidate this data and information? To what extent are we reliant on spreadsheets for this?
  17. What are the actions that need to take place to have these KPIs measured?
  18. Do we have access to external KPIs, either from the wider organisation or from our marketplace, so that we can benchmark our local activities?
  19. What are the agreed data requirements and set of KPIs that we will capture to measure the success of the RtM strategy going forward?
  20. What is our agreed Revenue Management Model?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 11 ‘Sales Incentive Program’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, RTM, Retail, ERP, Promotions, Information, RTM Assessment Tool, Distribution, Sales, Traditional Trade, FMCG, Route to Market, ERP/SAP, SKU

Get the Sales Cutting Edge With These Essential Tips on Route to Market Structure

Posted by Ross Marie on Thu, Nov 22, 2018

When discussing Route to Market Structure, I am referring to the physical roles and people that will be needed to carry out, back up and deliver on the RtM Strategy, and goals that are proposed or have been put in place.

rtm-structure-tips-final

The types of roles that I am referring cut right through the entire sales/RtM function. From the Sales Director/VP or Head of Trade Marketing level, down through different management levels to the individual executional roles. For example, the country or end market positions in Territories (e.g. Distribution Representative), Areas/Regions (e.g. Area or Regional Sales Manager), Trade Development, Promotions, Revenue, Merchandising, Channels, Key Accounts, Horeca (Hotels, Restaurants & Cafe's/Catering), Telesales, Telemarketing, Customer Service, Modern Trade, General Trade, and so the list goes on. The point here is that my focus is the specific RtM structure and roles you will need, not the support functions (Finance, IT, HR, Supply Chain, Marketing, etc.).

When looking at RtM Structure, the starting point will always be the Strategy that we are trying to deliver on. Strategy first, then the required Structure and then the Systems necessary to support them.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. The purpose of this model and blog series is to get RtM leaders to really look at what they are doing, to ask the right questions and to look at their function in a step by step manner. 

Over the past number of weeks, we have gone through the first 8 steps of the model. The focus of this post is Step 9, ‘RtM Structure’.

Here are some examples of questions you can ask under Step 9 – RtM Structure:

  1. Based on the RtM Review in Step 1, what is the current RtM structure and how does it perform? How does this compare to the competition’s RtM structure?
  2. What is the DIME Approach (Direct, Indirect, Mix & Everything in between) in your Market?  What does that mean for RtM Structure?
  3. Based on our RtM approach, what type of roles could we need? 
  4. Will we have a field force in the areas of distribution, trade marketing, specific channels (e.g. Convenience, Grocery, Modern Trade, etc.), sales promotions, events, Horeca, etc.?
  5. Will we require any brand, product, category specific RtM personnel?  If so, will the personnel be exclusive to one brand, product, category?  Who manages them?  How does this impact on our RtM structure?
  6. How will we manage and service the marketplace, by regions, areas, channels, cities, etc? Will it be a combination of many of these?
  7. Are there any external factors that could influence our RtM Structure?  Do we have specific guidance or rules to follow from our wider organisation?
  8. Is there a global RtM structure in our organisation?   How does that effect our local RtM potential structure?
  9. How will you link into and capture RtM learnings form other countries/markets in our organisation? 
  10. How does integrating the RtM or Sales function with other company departments effect any potential RtM structure?
  11. How will the RtM structure foster two-way teamwork and support across the RtM function and the wider organisation?
  12. Do we have any resource constraints, either internally in the organisation (e.g. financial) or externally in the marketplace (e.g. talent)?
  13. If there is a skill deficiency in the local marketplace how will we address this?  Can we bring in individuals from other parts of the organisation either short terms or long term?  What is our plan then to move to a more locally resourced organisation?
  14. What is the required field force to meet out RtM goals?  What back office is necessary to support this?
  15. What is the required management structure to meet our RtM goals?
  16. What is the available field force in the indirect channels and what influence do we have on Indirect resource requirements?  How will this impact on RtM Structure? How will we measure performance?  How will we support training and development needs in this channel?
  17. To what extent have we clearly defined the responsibilities and the accountability between the different Regions, Areas, Channels, Territories, Key Accounts, etc.? Have we identified any potential areas of crossover or concern?  What is the plan to address these?
  18. Does corporate governance or industry regulation affect our RtM structure?
  19. What are our rules on span of control, how many individuals can report to one manager?
  20. What is the overall RtM structure that will facilitate the delivery on the company RtM goals?

I hope you find this useful, and I welcome any views and comments below. Next week I will cover Step 10 ‘Data & Metrics’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, RTM, Retail, RTM Assessment Tool, Distribution, Sales, Route to Market, FMCG, Traditional Trade

First-Class FMCG Territory Planning is Crucial in RtM Strategy for Sales Growth

Posted by Ross Marie on Thu, Nov 15, 2018

Territory Planning for Fast Moving Consumer Goods (FMCG) companies is about dividing up a piece of geography into different subsets, based on certain criteria, usually geographic proximity. It allows FMCG companies to effectively and efficiently service their customers, whilst allowing the organisation to target specific resources at each individual territory.

territory-planning-4 (002)Territory planning saves time and money by avoiding overlaps where more than one resource from the same company tries to service or sell to the same client. It also helps to ensure that all outlets within a specific geography get covered, by assigning management of a territory to one resource. It facilitates local knowledge capture, new outlet openings, closures, understanding competitor activity, capturing consumer and other trends, to name a few. Territory Planning also allows the assignment, measurement and management of Route to Market targets (volume, share, brand distribution, display, range, POS material placement, etc.).

One of the key elements of Territory Planning is simplicity. For example, pick a piece of geography, maybe a city in a state, a district in a country, or one small island out of many, and then assign one TM&D rep to manage and be responsible for that Territory and all the outlets in it. If you need to also assign additional resources like Telesales Reps, Merchandisers, Sales Promoters, Channel Managers, Key Account Managers, and Telemarketing Reps, etc., be careful who carries the overall responsibility. Any territory needs overall management.

Here are some examples of questions you can ask under Step 8 – Territory Planning:

  1. What is the DIME Approach (Direct, Indirect, Mix & Everything in between) in your Market? What does that mean for territory planning? Which outlets do we cover, and which outlets are covered by indirect channels?
  2. Do you have an influence on the territories of your indirect channel? Can you increase your influence? Are these distributors fully cooperative partners? Are they exclusive?
  3. Based on the RtM approach that we are taking, are we looking to take on new distributors or replace existing ones, and what impact will that have on our territory planning?
  4. Are there any existing sales territories in place? Have they been reviewed as part of Step 1 in the 20 Steps to RtM Excellence? If so, what are the results?
  5. Based on the review of the current territory map, what are the key areas for improvement? How would these improvement areas translate into new or revamped territories?
  6. Are there any specific issues that we need to be aware of when reviewing the territories, whether internal (regional, resources, launches, etc.) or external (competitive actions, distributors, government/political, etc)?
  7. How does the local geography impact on forming territories?
  8. Are there specific infrastructure constraints that we need to be aware of?
  9. Are there any existing external geographical factors that would potentially shape any territory formation? Is the geography split into islands, into counties, into districts, into regions, via postcodes, etc?
  10. Are we reviewing or designing territories for field force members who will call to retail outlets (sales reps, TM&D reps, merchandisers, sales promotion, etc.) and/or will there also be territories for back office support and remote activities (telemarketing, telesales, customer service, etc.) or for a combination of both?
  11. Which resource will be assigned to overall territory management? Who will be accountable? Will Key Account or Channel Managers have some or a joint responsibility for certain outlets across territories?
  12. Are we looking to cover the entire geography or are we looking to target specific cities or population concentrations, or volume levels, or other criteria, or a combination of these?
  13. Based on the results of the outlet and channel classification, what impact is there on my current territory map?
  14. How would a potential new territory map look with the required resources to service the outlets?
  15. What would the call frequencies for each outlet look like across the territories and what are the target calls per day?
  16. Are there different activities that need to be assigned to different call frequencies? If so, what are they?
  17. Given the above, have we accurately defined the size, scope and geography of each of our territories?

My goal here is to get leaders in the Route to Market environment thinking about all the elements involved in RtM strategy, one of my key messages is to keep it simple, but we still need the detail.

This post is part of my blog series on the 20 Steps to Route to Market Excellence model. This post focuses on Step 8 ‘Territory Planning’. You can read about the previous steps here. I hope you find this useful, and I welcome any views and comments below.

Next week I will cover Step 9 ‘RtM Structure’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, RTM, Retail, Information, Distribution, Sales, Route to Market, FMCG, Brewing & Beverages