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Route to Market & Supply Chain Blog

FMCG Essentials to Improve Distributor Sales & RtM Execution

Posted by Ross Marie on Tue, Sep 28, 2021

Our step-by-step approach to drive and develop FMCG distributor performance is an eight-module programme that we call the Distributor Partner (DP) Development Programme. This programme is used for:

  • Strategy: Implement a new FMCG company approach to DP development/management.
  • Performance: Drive and improve the performance of individual distributors.
  • Training: Train our DPs, FMCG RtM or Distributor Managers.

I have previously shared the first Six modules:

STAGE ONE: INTERNAL PRODUCER FOCUS

  1. Module 1 - Producer RtM Strategy– Translate Producer RtM goals into DP capabilities/actions.
  2. Module 2 - Model Distributor- Definition of Industry & Geo-specific Best in Class distribution.

STAGE TWO: DISTRIBUTOR PARTNER FOCUS

  1. Module 3 - Distributor Assessment- How to identify and rank the best DPs.
  2. Module 4 - Distributor Partnership- How to build a joint approach for sales & profit growth.
  3. Module 5 - Planning & Logistics- How to improve DP Operations.
  4. Module 6 – Finance & Back Office - Understand credit risk & financial health of DPs

This is article will cover the first part of STAGE THREE: EXECUTION FOCUS, with Module 7 – Sales Management.

Improve FMCG Distributor Sales and Execution

What is the RtM Journey to DP Excellence?

Up until this point, we have been looking internally at the Producer and the DPs. We have been making sure that the Producer understands their RtM goals and can communicate them to any DP. We have been ensuring that the Producer knows what good looks like in an ideal or ‘Model Distributor Partner’, and we have looked at how to find and assess our current or potential DPs. Then we looked at how to build partnerships with the DPs, how to improve their key functions in planning, logistics, finance, and back-office management.

Now we need to look externally at how the DPs can deliver excellence in RtM execution, and how we can help them to do so. The specific areas that we will focus on for each DP will very much depend on what was found out during the DP Assessments in Module 3 above.

What are the characteristics of a DP with Excellence in Sales Execution?

FIELD TEAM

  1. STRUCTURE: The Sales force has a suitable structure, organisation, time, and equipment to cover the entire universe allocated by the Producer.
  2. RETENTION: Sales force staff turnover does not represent a major concern for either company.
  3. REWARD: Field Team has effective incentives in place that focus on achieving producer KPIs.
  4. NEW BUSINESS: DP shows a clear knowledge, willingness, and capability to gain new customers and increase Producer Numeric and Weighted Distribution.

POINT OF SALE (POS)

  1. TOOLKIT: DP RtM Team is equipped and trained for outlet execution and activation, including order capture, order method, POS material placement & management, planograms, portfolio & pricing process & initiatives, trade incentives & promotions, trade engagement options, etc.
  2. CONTROL: Clear rules are in place explaining the correct use, and records, of POS Toolkit and other sales aids provided by the Producer, including sales asset placement.

OUTLETS

  1. TRADE CENSUS: There is a living outlet database, regularly updated, which covers the market and splits the outlets by channel, and this matches Producer channel definitions.
  2. SEGMENTATION: The outlets are segmented based on criteria agreed with the Producer and this split corresponds to a service package for each segment.
  3. TERRITORIES: The sales force has clearly defined, resourced, and performing territories.
  4. ROUTES: Effective route planning is carried out and routinely refreshed for all Sales Reps. The route planning journey is aligned with the Producer.
  5. FREQUENCY: Call frequency is aligned to customer sales patterns and the operational and strategic goals.

SCORECARDS

  1. SUCCESS: DP has relevant KPIs in place to allow measurement of success and reward per DP Sales Representative.
  2. SUPPORT: The DPs KPI's support the overall key strategic, tactical, and operational requirements of The Producer, including investment and margin (front & back).

CONTINUOUS IMPROVEMENT

  1. TRAINING: There is a real capability to participate in and deliver relevant training programmes to the RtM team, and this includes coaching by senior DP or external employees.
  2. SHARING: Data and market intelligence is openly shared between DP and Producer to improve and sell more, including outlet sales data, pricing, margin, trends, etc.

The degree to which the above characteristics apply to each DP will determine the actions that need to be taken and the individual DP plan elements that must be put in place.

In my next blog, we will move on to the final Module of the DP Development Programme, Module 8 – Execution JBP & JAP. This last module will bring all elements of the DP Development Programme together to create the DP and Producer Joint Business Plan (JBP) and Joint Action Plans (JAP).

What should you do now?

Tags: FMCG, Route to Market, Performance Improvement, Sales, Distribution, Retail, RTM, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

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