Click 'Read Original' for details Promotional activities have always been the first point of contact between manufacturers and consumers, and a crucial part of consumer communication. Through scene setting, product introductions, and tasting experiences, they enable warm, face-to-face interaction with consumers. In recent years, with the continuous advancement of internet tools, many FMCG practitioners have become restless, hoping to reach all target consumers at once through a single internet tool. In reality, there are only two outcomes: either you become an internet sensation or a dud. The emotional connection between people is always built and accumulated through face-to-face communication, leaving a deep impression in memory, rather than through the cold phone screen. Recently, I used a mini-program in the market to run a B2C-linked promotional activity. In essence, it moved offline promotions online, but the mini-program is just an auxiliary tool; real market operations still rely on the old foundations. Today, I will systematically analyze how manufacturers can effectively run market promotional activities, to help you build a solid foundation for promotions. (A 20,000-word long read; it's recommended to save it for later reading.) 01 Can market promotions be contracted out? 02 How can manufacturers plan annual promotions? 03 The five core elements of promotional activity design 04 Steps for implementing promotional activities 05 How to improve promoter productivity? 06 How to evaluate promotional activities? Can market promotions be contracted out? Many companies position hypermarkets as the main battlefield for sales in offline channels. Take mushroom sauce, for example: for the well-known brand ZJ, hypermarket sales account for over 50% of total sales, and even higher in some regions. In terms of staffing, many distributors have promotion teams several times or even a dozen times the size of their marketing teams. The saying "iron barracks, flowing soldiers" applies; promoter turnover is even more extreme. I've seen a promoter work for Mengniu on Sunday and then switch to Yili in the same hypermarket the following Monday. Such sudden defections are common. How can these promoters be managed to maximize their value? Can we learn from hypermarket contracting to stimulate their initiative? Let's explore this model. I. Current state and drawbacks of the promotion team 1. Types of promoters: From a communication perspective, there are three types: a. Social promoters: For example, for ham and milk, they invite consumers to taste and chat casually to sell. b. Knowledge-based promoters: For example, for health products, they act like lecturers, guiding consumer needs. c. Skill-based promoters: For example, for cosmetics, they sell different products based on different consumer characteristics. From a functional perspective, there are five types: a. Standing promoters; b. Consumer experience promoters; c. Sales-driving promoters; d. Real-time display organizers; e. Door-to-door visiting promoters. 2. Mindset issues: a. Promoters have a weak sense of belonging to the company; most are paid by distributors, so they are essentially casual workers. b. Income gaps are large, and there is almost no social insurance, leading to psychological imbalance and poor stability. c. Companies provide few training and learning opportunities, greatly limiting personal development. 3. Compensation: Base salary + commission + performance bonus (a small portion, many don't have it). The base salary has basic performance assessments and accounts for a high proportion of income. Commissions are often not given enough attention for promoters. Performance bonuses are usually small amounts given for achieving certain indicators, not very attractive. Overall income is low, so many people use it as a temporary stopgap and leave when a better opportunity arises. Some promoters jump between companies. 4. Common drawbacks: a. They don't care about the business's stocking situation in the hypermarket, don't give salespeople suggestions, leading to unreasonable SKU stocking and improper FIFO, resulting in large amounts of old-date products. b. They lack passion for work; they just pass the time. c. They don't interact with the hypermarket, missing many opportunities. d. They may damage the company's image when dealing with consumers. To solve these drawbacks, on one hand, we need to increase their willingness to work proactively; on the other hand, through proper guidance, increase product sales and boost their overall income. Combining these two, we can strengthen their sense of team integration. Can contracting solve these issues? Let's compare. II. Core content of sales territory contracting The core of sales team territory contracting is the decentralization of allocation rights, using effective incentives to stimulate employees' initiative and value. Take Jinmailang's "Four-in-One" as an example: through regional market contracting, workers have their own fields; through vehicles, contractors can serve efficiently; through outlets, contractors can achieve higher output; through terminal systems, daily operations are standardized, incentivized, and guided. The core logic is to solve outlet service issues by improving personnel efficiency. Two problems need to be solved to improve personnel efficiency: First, the distributor mindset: "I'm not the brand owner; the products aren't mine; there's no guarantee of long-term cooperation. I might lose the agency rights once I build it up. My goal is to make money from the products and my team as quickly as possible." This mindset prevents distributor bosses from improving their own personnel efficiency. Second, the distributor's worker mindset: "The market isn't mine; the products aren't mine; only my salary is mine. If the pay is good today, I work for this distributor; if another offers better pay tomorrow, I'll switch." This is the main reason for low personnel efficiency among distributor workers. It's human nature to seek advantage and avoid harm, which cannot be changed. But Jinmailang's Four-in-One leverages strengths and avoids weaknesses, aligning with human nature: it returns the market to the workers, the products to the distributors, and builds the agency on the joint efforts of distributors and their workers. Sweat for your own bread, eat your own food, do your own work. This fundamentally aligns with human nature and improves personnel efficiency. By improving personnel efficiency, we unleash the power of employee initiative, leading to more attention to outlets and services, gaining competitiveness in the market, increasing sales, output, and income. III. How can promoters achieve contracting? To achieve contracting, first, there must be "fields" for the promoters. Where is the promoter's field (equivalent to the contracted area)? Second, how to attract more consumers to buy your products? Where is the guidance (passing consumers are equivalent to outlets)? Then, how to get consumers to buy more products? Where is the support (equivalent to vehicles serving outlets)? Finally, how to connect everything and incentivize? It also requires terminal system support. After mapping these one-to-one, I propose the first promoter contracting model. 1. Three key points for promoters contracting their own hypermarkets: a. Combine promoter performance with return/exchange rates: The performance truly purchased by consumers is the foundation of profit. Performance commission should first assess the sales comparison with the previous month and the same period last year, and also pay attention to the return rate comparison. Selling more but returning more is worthless. So, hypermarket contracting should focus on return rates. Performance and return rates complement each other: high performance gets positive incentives, high return rates get negative incentives. If the return rate is low, the saved costs from returns should be calculated and the surplus rewarded to the contracted promoter. b. Give promoters full trust and resources: With responsibility fields, resources must also be allocated. The right to use these resources belongs to the promoter, giving them a sense of ownership. Provide display cost support tailored to local conditions. Promoters are in the hypermarket daily; with resources, they can seize prime display positions at low cost and efficiently. For example, during the hot pot festival, a mushroom sauce promoter can communicate with the hypermarket manager themselves, use cost support to place the sauce near hot pot condiments, increasing sales. After the regional salesperson checks and approves, a reward is given. c. Provide guidance and establish a systematic operation: Many promoters lack ideas. For regional contracting to succeed, you need both the "field" and the "know-how to farm." Both are indispensable. So, proper guidance and establishing a farming model are essential. First, provide skill training, clearly explaining key points like how to acquire customers and increase average transaction value. Second, use incentives to guide good operational habits. For example: after a day's promotion, tidy up your display. After competitors' promoters leave, maximize your display so that at least before the competitor promoter arrives the next day, consumers see your brand as dominant. Take a photo and upload it to the system, and we can give a certain incentive. Finally, combine all skills and habits to form your own "farming" model. 2. Salesperson contracting model Currently, it's common for salespeople to handle several hypermarkets simultaneously, but they only handle stocking, while promoters handle selling. The two are not closely linked, and mutual care is low. This is wrong—without selling, how can there be buying? So, contracting hypermarkets to salespeople to stimulate their initiative and improve performance is also a viable approach. This way, salespeople will care more about promoter output and provide guidance. Promoter management becomes not just the "head" but the salesperson whose interests are closely tied, leading to more meticulous management. Of course, there are three points to note: a. Salesperson hypermarket contracting should be based on geographic proximity. Within the contracted area, single-store sales vary; they should be mixed high, medium, and low. Proximity improves service efficiency and promotion management density. b. The area and performance should correspond, with display, performance, and return rates managed together. The goal is to use outcome-based rewards to stimulate salesperson enthusiasm, thereby increasing output; encourage salespeople to pay more attention to the process indicators of their subordinate promoters; and encourage salespeople to focus more on point-of-sale displays and product age. c. The salesperson contracting model is not a "small boss" model but a "big boss" model. It's not just about doing well yourself, but leading the promotion team to "prosperity." Assessment and incentives are for the results of process goals, not the process itself. Summary: The promoter contracting system can be implemented. Its contracting logic is the same as the regional contracting logic for circulation market salespeople. The hypermarket is their responsibility field, consumers are their outlets, support is their vehicle, and the system is still the system. If we want to call it Four-in-One, it would be: hypermarket, consumer, support, and system. But this requires building a complete contracting mechanism and matching methods, which every enterprise with a large promoter team needs to explore and implement. How can manufacturers plan annual promotions? Many companies run promotions passively, often in the following situations: 1. Hypermarket anniversary events require activities, otherwise they block listings, so they have to do it; 2. A single SKU has inventory pressure or large old-date products need handling, so they have to do it; 3. Competitors are all doing it, so they must follow, they have to do it; 4. Important holidays seem like they must be observed, so they have to do it; 5. Brand owners have targets and KPIs, so they have to do it. A series of promotional activities may seem orderly, but in reality, they are scattered and uncoordinated. There's no annual plan for products, prices, costs, or sales share. The result is that promotions are always running, but results are never visible. They pull the cart without looking at the road, working hard but without merit. 1. First step in annual promotion planning: Break down goals The core of goal breakdown is to break down the annual sales target, including product positioning, time positioning, and sales positioning. 1) Product positioning: One main product, two supporting products. For first-tier brands, the purpose of promotions is simple: based on existing consumer awareness, increase repeat purchases and average transaction value. I won't elaborate. For non-first-tier brands, my suggestion is: one main product, two supporting products. One main product: Choose a super single product from your brand for year-round promotional activities, aiming to cultivate the main force and drive sales of other SKUs. It's easy to see that many first-tier FMCG brands have one or two high-traffic products leading the overall pace. Nongfu Spring's 550ml water drives traffic, Master Kong's braised beef noodles classic bag drives traffic, Master Kong beverages' iced tea drives traffic, Blue Moon's laundry detergent drives traffic, White Cat's dishwashing liquid drives traffic, etc. So, all non-first-tier brands need to find their own potential stocks and engage consumers through promotional activities year-round. Once chosen, don't change easily. Two supporting products: Choose your second and third tier products for alternating promotional activities. The purpose is, on one hand, to prevent a gap in brand power—if something happens to the main product, you won't be caught off guard—and on the other hand, to supplement and ensure brand sales. So, non-first-tier brands need to identify their second and third tier products, expanding brand influence while increasing output. Summary: Many brand owners like to use promotional activities to cultivate multiple products at once, with different products each year. The result is biting off more than you can chew, leaving everything half-baked. 2) Time positioning: Fixed holidays, planned in advance Many holidays are fixed each year, such as the three major lunar festivals: Dragon Boat Festival, Mid-Autumn Festival, and Spring Festival; and the three major solar festivals: May Day, National Day, and New Year's Day. These holidays are fixed, and each year's promotions should improve on the previous year. My suggestion: Create an annual important holiday planning chart, with themed promotional activities. The chart should reflect last year's achievements and shortcomings, and where this year's focus lies. First, ideally, promotional activities for the same holiday and product should be a continuation across years. For example: This Qixi Festival, our promotion gives a box of chocolates to a couple. Next Qixi, we invite them again (still as a couple) to participate. The year after, we do the same, taking photos and videos to evoke emotional resonance. Second, non-holiday occasions should also be planned, such as the annual college entrance exam season, graduation season, etc. These fixed, high-traffic occasions are also important times for promotion planning. Finally, the chart should specify the duration of promotional activities, such as 5 days for May Day, 7 days for National Day. Without time planning, sales and cost planning cannot be defined. 3) Sales planning: Ensure quality and quantity, meet targets The ultimate goal of promotions is to feed back into sales targets. Sales targets are an important measure of whether promotional activities are done well. Promotions are not just consumer interaction; they are about actually selling products. Goal breakdown should be planned well, with sales targets for each important time node, each promotion, and each SKU, and ensure promoters meet them. Here, I want to emphasize again: after each promotional activity, consider three questions about sales: a. How many times did sales increase during the promotion? b. How much did sales drop after the promotion ended? c. How much did the promotion help daily sales? Comparing these three horizontally can effectively measure the positive impact of the promotion on sales. 2. Second step in annual promotion planning: Budget for promotion share Sales are the foundation of a business; promotions are a means to achieve sales, but not a normal means. So, we must clarify how much of sales are completed through promotions. If sales don't change after a period of promotional activities, then the promotion's significance is minimal. Promotion planning aims to end the situation of "no promotion, no sales" as soon as possible. 1) Set the share: Brand owners' annual budget plans break down annual tasks into monthly targets. Annual promotion planning is to budget the share of sales to be completed through promotions each month, thereby allocating resources. This is also the core mission of each promotion. 2) Make adjustments: When the plan doesn't match reality, adjust immediately. a. Monthly sales met, but promotion share not met: One possibility is to adjust the budget plan; the promotion budget input amount or direction may be problematic. Another is to incentivize the promotion team, indicating execution is far better than expected. b. Monthly sales met, and promotion share met: This aligns with the budget plan; continue. c. Monthly sales not met, but promotion share met: Promotion effectiveness didn't meet expectations; review all promotion processes. d. Monthly sales not met, and promotion share not met: Promotion effectiveness and execution didn't meet expectations; review all processes and execution. 3. Third step in annual promotion planning: Set the price system The promotional price system not only affects corporate profits but also consumer value perception. Many brand owners have two prices all year, such as a regular price of 13.8 and a promotional price of 9.9, with obvious patterns. Some loyal fans wait for promotions to buy, which loses corporate profits and makes consumers feel bored. Over time, "die-hard fans" will inevitably be lost. 1) Plan promotional prices monthly: How much discount is needed each month to meet the monthly sales target? Promotional prices are constrained by task targets. Only when the marketing department and sales department are in sync can promotions maximize their advantage. If each goes its own way, they hinder each other. 2) Plan promotional price space: What is the annual lowest price (shock price)? When will it be implemented? What is the annual average price? What is the price between the shock price and the average price? These three price levels must be clear; they are the general policy for promotional price planning. 3) Annual price chart: Based on time points and price ranges, create an annual price chart. The promotional price system becomes clear at a glance, allowing macro control. 4. Fourth step in annual promotion planning: Estimate costs Promotions without cost estimates are blind. Spending without limits, and results cannot be evaluated. The purpose of promotions is to increase sales; the purpose of increasing sales is to gain profit; costs are the biggest killer of profit. 1) Total promotion cost budget: The sales revenue at non-promotional prices minus the sales revenue at promotional prices. In other words, it's the money the company earns less due to promotional sales. This money is defined as cost. When making budget estimates, be sure not to exceed the cost ceiling. 2) Can profitability needs be met? Hypermarkets have many costs: front-end and back-end deductions, display fees, management fees, promoter costs, etc. After deducting discounted gross profit and all hypermarket costs, can the promotion still be profitable? The profit bottom line must be protected. If it must be broken, think about what value is gained in return? 3) Form and timing of cost input: After all budgets are set, consider when to use the costs, how much to use, and in what form. What adjustments are needed if expected results are not achieved? 5. Fifth step in annual promotion planning: Annual promotion profitability Promotions are not about losing money for publicity. The marketing team must also be responsible for profits. The annual promotion budget should clarify how much profit can be created and whether it can meet the brand owner's profitability needs. Profit calculation: Gross profit from actual prices minus all cost expenditures. 1) Gross profit from actual prices is greater than all cost expenditures: If profitability needs are met, the annual promotion plan can be implemented. If not, fine-tune the plan. 2) Gross profit from actual prices equals all cost expenditures: Consider what is gained while losing profit. Is it valuable to the company's development? 3) Gross profit from actual prices is less than all cost expenditures: If the product has no brand power locally, consider whether to run the promotion or how long losses can be sustained. What does it ultimately bring to the brand? If the product already has some brand power, I suggest replacing the planner. Summary: Annual promotion planning is an eternal topic. No planning, no promotion. But the reality is: either you plan carefully, the plan is reasonable and approved, but when executing, you don't follow the plan—execution is poor, supervision is poor, and at year-end, there's finger-pointing; or you don't plan at all, follow your gut and experience, and the results are predictable. Here, I want to emphasize: for many promotion planners, after year after year of promotional activities, is the brand power of the company's products increasing? Is the sales share of products without promotions growing? Is there progress in overall profitability? If you can't answer these three questions affirmatively, I suggest you step aside. The five core elements of promotional activity design First, let's look at the purpose of promotions: Under any socialized mass production and commodity economy, on one hand, brand owners cannot fully know what products consumers need, where they need them, when they need them, and at what price consumers are willing and able to accept. On the other hand, consumers cannot fully know what products are supplied by whom, where, when, and at what price. Because of this objective "information separation" between brand owners and consumers, the "production" and "consumption" contradiction, companies must use communication activities—advertising, publicity, personal selling, and other promotional tools—to convey product information to consumers, enhancing their understanding, trust, and purchase of the company's products, to achieve the goal of expanding sales. In summary, the purpose of brand owners' promotions is to tell consumers: promotional intensity, promotional form, promotional price, promotional time, and promotional communication. These five aspects constitute the five core elements of promotion. I. Core element one: Promotional intensity Before planning a promotion, the most important thing is to clarify the intensity. The intensity is related to the purpose of the promotion. Only by clarifying the purpose can you better design the intensity. What are common promotional purposes? 1. Handling old-date products: The older the product age, the greater the promotional intensity. At this point, consider the quantity to be digested or when existing inventory can be cleared to avoid total loss from expiration. 2. Hitting competitors: Promotions here can be proactive or reactive. Proactive promotions adjust intensity to break sales deadlock with competitors. Reactive promotions are when competitors fire the first shot, and you have to follow. The intensity is generally based on competitors, adjusted higher or lower depending on brand power. 3. Consumer experience: The core of consumer experience is the gap between value and price. The more value for money, the easier to experience. The intensity should make the value (psychological price) far exceed the price, at least touching consumers' hearts. 4. Boosting sales: This intensity is easier to calculate: how much money do you have? How much product do you plan to ship? The intensity is easy to derive. 5. Regular promotions: An unchanging price system will cause consumer fatigue. Regular promotions should design intensity according to established patterns, making product prices operate in waves. Summary: Promotion design must first clarify the purpose. Only with a purpose can you match the intensity. Promotions without purpose are just busywork. II. Core element two: Promotional form There are many promotional forms. From the consumer's perception, there are two extremes: one is straightforward, like common original and promotional prices, where consumers easily see the discount; the other is "hidden," like gifts with a huge gap between purchase price and retail price, where consumers don't easily perceive the discount. Let's analyze. 1. Discount promotions: Direct, such as discounts, special prices, coupons. For example, original price 15 yuan, special price 9.9 yuan. The savings are visible, and consumers like it. Suitable for products with firm prices. 2. Tiered special prices: Relatively direct, such as second item half price, spend X get Y off. The savings require simple calculation. This type can increase purchase volume from loyal consumers. 3. Combo special prices: Relatively direct, such as Coca-Cola often combining Coke and Fanta, or Minute Maid orange juice and Coke. This type can drive sales across multiple items. 4. Gifts of other products from the same brand: More subtle, such as when a brand promotes a new product as a gift with a bestseller. For consumers, it's easier to accept. 5. Gifts of non-brand products: More subtle, such as buying one item and getting an electric oven. The value of the oven is hard to measure, and the gap between bulk purchase price and retail price is huge. If the gift is chosen well, it can be very attractive to consumers. 6. Lottery promotions: Very subtle. Set various prizes with winning probabilities, using big prizes to stimulate consumers' gambling instincts to sell products. Summary: There are many promotional forms. Brand owners need to constantly adjust and vary them to avoid aesthetic fatigue from the same type. III. Core element three: Promotional price In the market, pricing determines the world. Price is both an economic issue—its key is demand elasticity—and a psychological issue—its key is the buyer's shopping psychology. 1. Balance the relationship between price, sales, and profit: Different prices have different impacts on sales and profit. Distributors care more about their own profit; brand owners care more about distributor sales. As a promotion designer, you need to balance the interests of both distributors and brand owners for long-term business. 2. Balance consumer perception and competitor changes after price adjustment: If a product has some influence in the market, promotional pricing is a move that affects the whole. You must fully consider consumer and competitor feedback, and balance the brand owner's sales targets and distributor profits. Summary: Price competition is a core factor in promotion design. For consumers, information travels instantly. So, promotional pricing must fully consider the product, competitors, distributors, brand owners, stores, and consumers, and learn to balance pros and cons. IV. Core element four: Promotional time The choice of promotional time is based on foot traffic, consumption atmosphere, brand days, etc. This requires annual planning and step-by-step execution. Second are unexpected events, i.e., event marketing, where you need the flexibility to respond quickly. Finally, there's the duration of the promotion itself, such as long-term and short-term promotions. 1. Foot traffic selection: Major holidays are times of high foot traffic in hypermarkets. Plan the schedule for these periods each year. 2. Consumption atmosphere selection: In certain periods, there's a concentrated consumption environment, such as the common 618, Double 11, hot pot festival, daily chemical festival, etc. During these times, consumers have the urge to spend due to the environment, so promotional design should pay close attention. 3. Brand days: Many brand owners establish their own brand days, such as May 17 for QiQiang daily chemicals, with online and offline linkage, and large-scale promotional activities. 4. Event marketing: These promotions are random, not included in the annual plan. The design should combine with the event itself, immediately set the activity time, and execute quickly. 5. Long-term and short-term promotions: Long-term promotions should vary the form, intensity, and price. Short-term promotions need explosive power, the ability to instantly penetrate consumer minds. Summary: 90% of promotional time design is in the annual plan, and 10% is random. If this isn't achieved, the year's promotions won't have a resonance effect, and the results won't solve the brand problem. V. Core element five: Promotional communication Promotional communication includes the following aspects. Only with full communication can execution be good. 1. Brand owner communication: Mainly cost input. Is the cost within or outside the plan? What is the reimbursement form? Promotional gift support? Second, the promotional form, intensity, price, and time. 2. Distributor communication: Mainly cost input. Besides brand owner support, how much will the distributor invest? Reimbursement form? Promotional gift support? Second, are there any objections to the brand owner's promotional form, intensity, price, and time suggestions? 3. Hypermarket communication: Confirm whether the promotional form, intensity, price, and time can get hypermarket cooperation. 4. Internal team communication: Design promotional details, communication scripts, work assignments, etc. The focus is on assigning responsibility to individuals. 5. Consumer communication: Design communication scripts, including how to attract customers, introduce products, close sales, etc. Summary: Promotion is essentially a communication activity. The brand owner sends various information to stimulate consumption, transmitting it to consumers to influence their attitudes and behaviors. Promotional communication tests the basic skills of a promotion designer. It seems simple, but in practice, it's often full of holes. Many promotions fail to meet expectations because of communication problems. Summary: We often hear salespeople complain about promotional plans from manufacturers. Besides the salespeople's emotional factors, another key factor is that many promotional plans are too difficult to execute and lack effective interest-driven incentives. This not only increases work pressure on salespeople but also doesn't bring substantial growth to hypermarket sales. Additionally, many promotional plans are similar, so hypermarkets aren't very interested. Often, money is spent without obvious results. Designing a perfect promotional activity is not easy. First, you need annual planning ability, combined with the brand owner's annual product strategy. Second, you need multi-party communication skills to ensure multi-department coordination. Finally, you must be responsible for the overall promotional effect. So, practicing basic skills is the most basic requirement for promotion designers. Steps for implementing promotional activities Earlier, we discussed many key points and methods for promotion design, but they are just important items. In my view, plans that aren't implemented have no value. Regarding promotional activities, I've always strived to create an operation manual, systematizing and process-oriented execution of every action in each promotion. Especially for execution-level personnel, it's best to have step-by-step execution details like a product manual. How to implement specific operational steps into each month or each promotion? Let's elaborate further. I. Decompose the promotion plan Before running a promotion, you must understand: What is the purpose? What is the plan? Where are the opportunities to achieve the goal? Without purpose, it's blind; without a plan, it's chaotic; without seizing opportunities, it's foolish. Look at promotions with the end in mind. 1. Determine promotional goals: There are three questions to clarify: First, what do you want to achieve? Sales or consumer experience? Handling old-date products or new product promotion? Proactive or reactive? Second, what is the scope of this promotion? Channel scope? Hypermarket area positioning? Third, which items will be promoted? Does it match the annual plan? 2. Determine the promotion plan: How many promotions this month? If it's consumer experience, how many consumers to reach? If handling old-date products, how many units? If boosting sales, to what extent? The plan is an important part of achieving the goal, with an overall evaluation after the activity. 3. What opportunities exist to meet the promotion target? First, where are consumer opportunities? Where are events that can bring more foot traffic? Second, where are sales opportunities? What activities can be combined to increase average transaction value? For example, in 2020, there was a period when lollipop backpacks went viral online. Many lollipop and dairy companies seized the opportunity to run several promotions and sold out. II. Determine promotional intensity There are no unachievable sales targets, only promotional intensities that can't achieve them. So, grasping the intensity is crucial. You must balance profit and sales, seeking the optimal value that considers both from the profit-sales function. Set the per-unit intensity that matches the sales budget. Simply put, it can be divided into three steps. 1. Determine the sales target: That is, how many products need to be sold through the promotion? The sales target is basically set in the annual budget. At this point, calculate the share of sales from promotions. For example, to achieve 1 million in monthly sales, promotions must reach 400,000. That's the mission of promotional sales. 2. Determine the cost budget: Following the previous example, how much promotional cost is needed to achieve the 400,000 promotional sales target? Of course, the upper limit of this cost is already set in the annual budget. At the same time, calculate the cost estimate for each SKU. Now consider whether it's enough. If not, what remedial measures are there? For example, if direct special pricing isn't enough, change the promotional form, make the promotional price more subtle, and use high-premium gifts to solve it. 3. Determine per-unit intensity: With the above planning, the intensity for each product is easy to calculate. At this point, emphasize that promotional intensity is relative. Adjust based on competitor intensity; never act alone. III. Determine the elements of the promotional activity This requires on-the-ground thinking before implementation. The same promotion should first consider the promotional form, time, and price. These are the most important things for the execution team. They should be clear, simple, and easy to execute. 1. Promotional form: The form should remain consistent within a promotion or a certain period. I mentioned six promotional forms earlier. Consumer price perception ranges from straightforward to very subtle. So, the promotion planner should choose the form that best matches the product's current situation based on cost, brand power, and competitor promotions. Once chosen, don't change. 2. Promotional time: The longer the promotion, the lower the consumer's purchase intention. Combine long-term and short-term promotions. Long-term should be long enough, adjusting main and supporting products. For example, if you're running a long-term promotion on a floor display, do one product this week and another next week, making consumers feel the brand has many promotions. Short-term should be short enough (or longer if costs allow), accompanied by shock prices to instantly penetrate consumer minds and provide a different experience. It's important that promotions aren't flat; create freshness. For example, if a product is 15 yuan in the first half of the month and 9.9 yuan in the second half, month after month, consumers will lose the desire to buy. 3. Promotional price: Price is the most sensitive purchase factor for consumers. There's a logic here: it's not that the cheaper the product, the better; it's that consumers feel they're getting a better deal. The highest level of getting a deal is value for money. So, I suggest choosing more subtle promotional plans. Of course, when implementing, you still need to think about product pricing. For pricing, you can refer to my previous article "A Beverage Distributor's Practical Case: Net Profit Increased 10% with Full-Year Price Adjustments in 2020." IV. Confirm communication with three parties Only with good communication can implementation go smoothly. Communication is divided into three levels: brand owner, distributor, and hypermarket. If any one party doesn't explicitly agree, postpone execution; otherwise, there will be endless trouble. 1. Brand owner level: Need approval from leaders at all levels, gain leadership support, and provide a detailed implementation plan, especially for cost usage, sharing plans, reimbursement methods, and expected results. 2. Distributor level: Besides feeding back the results of communication with the brand owner in detail and obtaining consent, also discuss details: who is responsible for material delivery before the activity? Who is responsible for applying for and shipping out trial products? What about the wrap-up after the activity? 3. Hypermarket level: First, pay attention to location. Location is the first battlefield of promotion. Choosing a good location is particularly important. I won't go into detail about location selection methods; the principle is to get the highest foot traffic. Second, display. It's best to use special-shaped displays to attract consumer attention. Also, never use bare floor displays; they damage the brand image. If you're spending hundreds or thousands on a floor display, don't skimp on a few yuan for shaped KT boards and other visual merchandising materials. Finally, sales support configuration. My usual experience is to spend more money on good-looking young men and women. After all, we're in the era of the appearance economy; appearance is productivity. The law is irreversible, and human nature cannot be violated. Of course, the number of sales support staff should also be communicated. Some hypermarkets have management fees and caps on support staff, and they may require health certificates. Be prepared. V. Form the promotional plan All the above thinking should be formed into a structured implementation plan, printed, and distributed for training. I've seen too many cases where people say one thing and do another. It's not that the plan is bad; it's that when there are many consumers, execution becomes chaotic and neglects one thing for another. The purpose of forming a plan is to standardize operations, assign tasks to individuals, and clarify responsibilities. Here, I need to emphasize three "don'ts": First, don't use vague terms, such as "estimated sales of about 100,000." Calculate precisely; don't be below 100,000. Second, don't have multiple people responsible for one thing. If multiple are responsible, no one is responsible, and if problems arise, everyone shares the blame. Third, don't make major changes to the established plan (minor adjustments are okay). Trust that the plan was made through careful thought. Even if problems arise, don't make drastic changes. Last-minute scrambling is of little use; besides becoming more passive, it affects team morale. Summary: The specific implementation steps are the core of the activity. Generally, promotional activities are divided into three stages: 1. Early stage: Excitement period. Curiosity about new things; many people participate. 2. Middle stage: Fatigue period. Team performance declines, affecting consumer communication efficiency. 3. Late stage: Sprint period. Racing against time to achieve set goals. Different stages should have different incentive measures, including incentives for the promotion team and reasonable consumer prizes at different stages. Also, with limited resources, don't choose too many promotional forms. Always develop contingency plans for possible emergencies. Finally, do a good job of summarizing the promotion, including strengths, weaknesses, new opportunities discovered, and potential threats. How to improve promoter productivity? Personal view one: For a successful promotion, the promoter's contribution is no less than 60%, but many FMCG companies don't give it enough attention. Personal view two: 80% of promoters are not treated fairly like salespeople (in non-income aspects). The "casual worker" mentality runs through both parties' promotional activities. Personal view three: 99% of FMCG companies don't include promoter recruitment and use in the HR department's scope. Instead, the marketing department simply supervises while delegating to grassroots sales organizations, or even the decision to recruit and use promoters is made by grassroots staff, often resulting in friends and relatives filling positions. Personal view four: Many brand owners only care about the tens of thousands of yuan spent on floor displays, end caps, and special displays, but ignore promoter management, which costs the least and has the most impact. As a result, thousands of yuan in display costs are wasted because of a one or two hundred yuan promoter failure. For many brand owners, such as milk, daily chemicals, and low-temperature products, the promotion team is larger than the sales team. Market cost input far exceeds human resource input, and the construction of the promotion team is far from sufficient. Now, let's analyze how to improve promoter productivity from the six modules of human resource management. I. Human resource planning for promoters 1. Clarify budget preparation and execution: Many brand owners' demand for promoters is reactive: if there are too many, cut a few; if too few, recruit more. Thus, an unstable promotion team is born. Strictly speaking, promoter recruitment should be based on digital operations. For example, select the TOP 50 outlets, and coordinate based on promotion cost budget, venue requirements, number of promotional categories, and activity duration. Once determined, enter the recruitment stage. 2. Clarify organizational structure: Who manages the promoters? Who is the employing unit? What are the employment and management systems? These questions must be clear. In short, responsibility must be assigned to individuals. I once encountered a situation where a promoter, during an activity, took a marker from the hypermarket without permission to write a poster and was penalized. After the problem arose, the promoter's three managers—KA salesperson, supervisor, and promotion planner—all had reasons to shirk responsibility. How much value can such a promotion team have? 3. Analyze supply and demand for promoters: Waste of human resource costs is always the biggest hidden cost. How to avoid overstaffing or shortages? The promotion team should regularly evaluate personnel input and output, balance supply and demand across regions, reduce cost loss due to poor management, and fill gaps in areas with insufficient promoters. II. Recruitment and placement of promoters The core of recruitment is to bring excellent, suitable people into the company and place them in suitable positions. 1. Recruitment channel analysis and selection: Promoter recruitment usually has the following channels: a. campus recruitment, b. promotion company recommendations, c. poaching quality staff from competitors, d. internet recruitment. I recommend poaching quality staff from competitors, as the employment risk is relatively lower. 2. Recruitment implementation: Before implementation, clarify three points: recruitment needs analysis, job analysis and competency analysis, and recruitment procedures and strategies. Here, I need to emphasize two points: First, promoter recruitment is a systematic process and should be treated like regular employees. Second, the promoter's appearance is an important indicator. In today's appearance economy, if conditions allow, recruit as if for car models—not just for product promotion, but for corporate image. 3. Measures to reduce promoter turnover: The most important indicator for a qualified promotion manager is the stability of the promoters under them. Brand owners should develop specific measures to reduce promoter turnover, from income planning to career planning, from entry checks to exit interviews. III. Training and development of promoters Training is the process of teaching promoters the basic skills needed to do their jobs. Development mainly refers to management development, which includes activities that improve current or future management performance by imparting knowledge, changing attitudes, or improving skills. 1. Training that combines theory and practice: Many companies don't train promoters. After recruitment, a few words and they're on the job. Such promoters are better not recruited. If they mislead consumers with product information, it's the biggest help to competitors. a. First, train promoters to be product experts, knowing their products inside out and able to answer professional questions. b. Second, communication experts, using different scripts for different consumers to get them to understand and buy. c. Third, sales experts, selling to more consumers and getting consumers to buy more. d. Finally, management experts, managing their own stores, getting along with the store, and maximizing resources. All the above requirements should ideally be turned into exam questions based on actual past cases. Only after passing should they start work. 2. Common training methods for promoters: a. Lecture method, focusing on product knowledge and communication skills, usually indoors. b. Demonstration method, focusing on display visual merchandising and promotional scene setup, usually at the promotion site. c. Case study method, focusing on summarizing gains and losses, usually at review meetings after the activity. 3. Regular evaluation and education: The market is never static, and neither are promoters. So, regular evaluation and education are essential. This is a cyclical process of checking and following up, aiming to solve practical difficulties and guide promoters to maintain their best state. IV. Performance management for promoters 1. Performance forms are not just sales: Promoter performance can be multi-dimensional, especially for long-term promoters. Sales are one aspect; gift usage (promotion cost rate), old-date product control, new product promotion, consumer communication quality, etc., are all dimensions. Performance incentives should consider both increasing revenue and reducing costs. First, increasing revenue: promoters create more value, such as selling more products and generating more profit. Second, reducing costs: promoters reduce losses from old-date products and build good relationships with stores to get free or low-cost display positions. Both should be the core of promoter performance. Be generous and incentivize more. 2. Performance interviews and improvement methods: The essential difference between promoters and salespeople is that promoters deal more with C-end customers, while salespeople deal more with B-end customers. So, performance interviews and improvement methods should also be done properly. Don't apply salespeople's habitual thinking to promoter performance. Regularly organize interviews with promoters to understand consumer dynamics, adjust promotional plans, and improve promoter labor output. V. Compensation and benefits management for promoters 1. Promoter compensation system: a. Fixed salary: pay by the day, same regardless of quantity or quality. b. Base salary + bonus: base salary accounts for over 90%, with additional rewards for achieving certain indicators (not necessarily sales; sometimes consumer communication numbers, etc.). c. Base salary + commission: base salary accounts for about 60%, with relatively high commissions. My view is that the promoter compensation system must better incentivize their work and better unleash their initiative. It can be behavior-oriented or result-oriented. Only such a performance system can maximize promoter value. 2. Build a comprehensive compensation system: a. Job evaluation and pay grades: Promoters shouldn't all have the same base salary. Differentiate based on ability, working hours, etc., giving excellent and hardworking people a sense of superiority and others something to strive for. b. Salary survey: Income should keep up with the times. Understand the industry average income and ideally be slightly above. c. Compensation system formulation and adjustment: Promoters should also have regular grade assessments. d. Labor cost accounting: This needs to be calculated well, operating within controllable costs. 3. Benefits and other compensation issues: Promoters should also have the benefits that salespeople have. Regular important holiday benefits, team building activities, corporate training, etc., shouldn't be left out. Non-regular benefits like social insurance and housing fund should also be given under certain conditions. VI. Employee relations for promoters The core here is to integrate promoters into the company and achieve a win-win for both. I find that few companies sign labor contracts with promoters (except for temporary and short-term promoters). Even to avoid personnel risks, they place promoter ownership under distributors. Some promoters have served the company for a year or two but are still "outsiders." If you don't treat them as family, how can they work hard for the family? So, I suggest signing labor contracts under the principles of equality, voluntariness, and consensus, establishing labor relations and clarifying rights and obligations. Summary: Some might think the above process for promoters is too cumbersome. In fact, I think it's necessary. Take the Jinluo ham general agent I visited in the south before: they had fewer than 20 salespeople, but over 200 promoters (long-term and short-term combined). The salary paid to promoters was several times that of salespeople. I believe there are many similar companies. If such a large cost expenditure doesn't have a well-established system, it's hard to survive in today's increasingly competitive and cost-scarce environment. So, I suggest brand owners and distributors strengthen the construction of the promotion team, steadily improving promoter productivity, step by step, to support corporate development. How to evaluate promotional activities After a promotional activity, many teams symbolically hold an evaluation meeting. Most meetings just cover: how much was sold? What was the competitor reaction? What were the shortcomings and improvements for next time? Any good ideas and suggestions for future activities? Of course, this is necessary. But if that's all, it won't help much for future promotions. Besides sales data, everything else is subjective. Evaluations without data support can only be considered thought reports. Over time, with more evaluations, they become routine. Meeting summaries are strikingly similar, and value diminishes. Next, I'll use my current experience with Unified series product promotions to discuss how to do promotion evaluation well. I. Common evaluation dimensions 1. Sales evaluation: Compare sales of the promoted product before, during, and after the promotion over the evaluation period. This is a common post-promotion evaluation method. Generally, four situations occur: a. Sales before and after are basically unchanged, with a spike during the promotion. This indicates strong promotional impact but lacks substance. It's common; the product lacks content accumulation. b. Sales spike during the promotion, but after the promotion, sales drop significantly compared to before. This indicates the promotion caused adverse effects. There was no in-depth research on target consumers. c. Sales are unchanged before, during, and after. This indicates the promotion had no impact. Such promotions lack basic thinking. d. Sales spike during the promotion, and after the promotion, sales begin to grow. This indicates the promotion achieved expectations and had a good effect. This is the ultimate goal of promotion. Summary: Sales evaluation is an important means of promotion evaluation. In short, only when consumers agree with your communication will they buy the product. Many promotions don't have a long-term effect on sales. The main reason is that consumer communication lacks novelty or doesn't answer consumer needs, or there's no basic thinking at all. Promotions done for the sake of promotion naturally won't change sales much. 2. Effect evaluation: This mainly aims to understand the impact of the promotion on target consumers, such as their evaluation of the activity, impression of the promoted product, and understanding of the promotion's purpose. The specific method is: randomly select a few target consumers from the data collected during the promotion, have a dedicated person communicate with them, and ask about their feelings during the activity, whether they understood the purpose, whether they knew the product, whether they recently purchased the product, etc. Finally, aggregate all results for judgment. If 85% of target consumers correctly answer 90% of the questions, the promotion is considered very effective. This evaluation method is more suitable for new product launches, using promotional activities for consumer interaction to understand their awareness of the new product. From the three dimensions of cognition, transaction, and relationship, effect evaluation focuses more on building consumer awareness, which is the first step of sales and an important foundation for product movement. 3. Perspective evaluation: Multi-angle evaluation is more conducive to reviewing promotions. a. Evaluating a promotion from only one angle means even success can't be replicated. From the retailer's perspective, they care more about which products are worth attention. From the manufacturer's perspective, they care more about which brands are worth attention. Different attention leads to different evaluation results. For example, retailers pursue sales and profit; brand owners pursue sales volume and market share. Retailers think within categories; brand owners think within brands. Retailers have POS data down to the item level; brand owners have SKU data down to the day. b. Multi-angle evaluation of price and sales. Common methods include: Compare price and sales differences with the previous month and the same period last year; Compare price and sales differences with adjacent surrounding products; Compare price and sales differences with main benchmark competitors. II. Essential evaluation data a. Sales amount: Compare sales during the promotion with before and after. b. Gross margin: The final product gross margin after accounting for promotion costs. c. Number of transactions: The number of shopping baskets or receipts, or specifically for a product. Used to judge foot traffic at the promotion venue. The larger the number, the higher the popularity, which is beneficial for the promotion. d. Average transaction value: The total amount paid per purchase. Used to judge consumer spending power at the venue. The larger the number, the stronger the purchasing power. e. Transaction penetration rate: How many baskets contain a certain product or category. Shows the popularity of the product or category at the venue. The larger the number, the higher the product's popularity. f. Various input levels: Including media promotion input, prize and gift input, activity materials input, other costs, etc. g. Return on investment: The ratio of total output revenue to total input cost. An important measurement. h. Activity strengths and weaknesses: Review from both results and process. Summary: Evaluation of promotions cannot be simply described in words. These data must be present and analyzed. III. Key points in promotion evaluation 1. Evaluate the overall thinking of the promotion For brand owners, the purpose of promotions is essentially three points: First, build the brand: Evaluate whether the promotion theme complements the brand theme and whether the creative ideas better highlight the brand. Second, boost sales: Evaluate whether the promotional gifts are practical and attractive, and whether the purchase packages are more acceptable to consumers. Third, clear inventory: Evaluate whether price discounts can move consumers. In short, different purposes require different evaluation dimensions. Always seek the most matching plan. 2. Evaluate the promotion process a. Before the promotion: Are promotional flyers, posters, and POP materials distributed and prepared? Do all hypermarket staff know the promotion is coming? Is the promotional product well-stocked and prepared? Are related promotions ready? Has promoter training and related precautions been implemented? b. During the promotion: Are promotional products complete and quantities sufficient? Is the display attractive? Are POP ads posted? Are products suitable for sale? Do all hypermarket staff know the promotion period and methods? Is the atmosphere and sales scene attractive? Can service desk staff make regular broadcast announcements? c. After the promotion: Are expired posters, POP, and flyers removed? Has the product returned to original prices? Has the display been restored? The core of process evaluation is details. More often than not, the success or failure of a promotion is determined by execution details. 3. Evaluate distributor cooperation The beneficiaries of promotions are not only brand owners but also distributors, so distributor cooperation is particularly core. Evaluate whether the distributor cooperated appropriately and timely, actively supported, and shared some promotion costs and price reduction losses. Whether they ensured timely supply of promotional products and goods during the promotion. Whether they fulfilled their obligations and cooperation during the promotion. It's worth mentioning: if distributor cooperation is insufficient, decisively abandon the promotion. Otherwise, even if forced, the effect will be greatly reduced, losing the meaning of the promotion. 4. Evaluate against competitors In terms of timing, there are three points relative to main competitors: a. Proactive: Start promotions before competitors. Evaluate what inhibitory effect your promotion had on competitors, such as how much their sales dropped and how much converted to yours. b. Follow-up: Start promotions simultaneously with competitors. This is common. Evaluate who had higher sales growth in the same venue. Assess from both increment and growth rate. c. Reactive: Start promotions after competitors. Evaluate the impact of competitors' first-mover advantage on your sales. After your promotion ends, can you reduce losses? Market promotion personnel often do evaluation summaries, but in the end, summaries are summaries, and implementation is implementation. Summaries are either done perfunctorily to get by, for reimbursement convenience, and are all the same; or they are done seriously and rigorously, but the next promotion doesn't use them as reference. Both are wrong. FMCG has come to where it is today, with increasingly fierce competition. Seeking growth in a stock market, every promotion you run is a game against competitors. This game is more about refining details. If you don't handle it well long-term, the possibility of being kicked out by competitors is high. So, please take every promotion evaluation seriously and maximize the value of promotional activities. PS: From August 24-26, 2021, the 2021 (4th) China FMCG Conference, hosted by New Distribution, will open in Shanghai. Focusing on industry trends + practical cases + growth connections, 3,000 FMCG practitioners will gather. 10 themed forums cover new retail O2O, community group buying, short video live e-commerce, distributor transformation, rise of new consumer brands, new wine and beverage interpretation, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications, etc. Operators from various segments will bring the latest case studies. Confirmed heavyweight guests so far include: 1. Tao Shiquan, founder of Jiangxiaobai; 2. Yao Xuhong, General Manager of Meiyijia Holdings; 3. Lu Xiuqiong, Global Expert Partner at Bain & Company and former VP of Marketing for Coca-Cola China; 4. Chen Xiaodong, Senior VP of Nestlé Greater China; 5. Zhang Fujun, President of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, General Manager of China Resources Snow Breweries Marketing Center; 7. Yang Hongbin, VP of Junlebao Dairy Group; 8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, General Manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, E-commerce General Manager of Gold Hong Ye Paper Group... A grand event for FMCG professionals—you must be there! Are you "watching" me?