Click 'Read Original' to view details. This article discusses how distributors can set up incentive mechanisms for frontline salespeople. It is over 7,000 words and takes about 20 minutes to read. It is recommended to read carefully. Almost every distributor is troubled by one thing: salespeople are increasingly difficult to manage, and their work enthusiasm is getting worse. To address this, many distributors try to find solutions, such as consulting peer distributors to see how they manage, or seeking guidance from experts and paying for courses. In the end, they look, learn, and attend classes. They are excited at the time, and when they return, they want to take action, but then they think: "Wait, that distributor sells grain and oil, while I sell water. The product categories are different, the outlet management is different, and the average order value is different. I can't use their methods. Their methods may not suit me. If I try to apply them, I might create problems." Then they continue searching, learning from experts and asking peers... always on the path to finding answers. There are two universal views on learning: First, learning is definitely useful. But if you learn and don't apply, it's useless. Second, no matter what you learn, you must fully consider the logic behind it. Any model or method has its applicability. Ultimately, what we learn is not the methods and models, but the thinking logic behind them. Why did I say the above? Because I often frequent various distributor groups, and I find that many distributors repeatedly ask "silly" questions.

Salespeople are hard to recruit. How do you recruit them?

I already pay a base salary of 4,000 yuan, but my subordinates are still dissatisfied. How do you set your salaries?

I sell grain and oil brands, with multiple brands and products, hundreds of SKUs. How do you assess performance? If I pay commission based on sales amount, what if salespeople only sell bestsellers? In fact, many experts and excellent distributors have many good solutions to these problems and difficulties, which can be used for reference. Unfortunately, distributors often want to obtain the "secret recipe" of a successful distributor who sells the same product categories, has the same scale, and even operates in a similar market environment. Is there a set of secret recipes that can be used directly and effectively? No! In the past, New Distribution has reported many cases of distributor organizational innovation and assessment, and has also summarized some methodologies. But New Distribution believes that knowing the 'what' is not enough; we must also know the 'why'. Regarding the methods for distributors to incentivize and assess frontline salespeople, for the convenience of distributors to understand and master, we define it as the "Little Boss Project." This article hopes to analyze the implementation strategy of the "Little Boss Project" for FMCG distributors in terms of sales incentives, based on past case reports and combined with the thinking of the New Distribution team. Core content:

1. What is the Little Boss Project?

2. What kind of distributors are suitable for the Little Boss Project?

3. Designing management and marketing standards

4. Design framework of the Little Boss Project

5. Precautions for the Little Boss Project What is the Little Boss Project? In a distributor's business, the most critical factor for success is the salesperson. The distributor bears the capital, represents the products, and provides warehousing and distribution, but this is only the most basic part. Only through salespeople selling the goods and turning them into money can a positive business cycle be formed. Salespeople are the most value-generating link. What does a person value most in sales? Relatively free and flexible work, with freedom to play within a set circle, and more work means more reward. Essentially, he is also a boss. Sell one more item, get one more commission. In fact, every salesperson harbors a dream of being a boss, and what the distributor needs to do is to stimulate his "entrepreneurial dream." Of course, for the distributor, the core is to solve the operational problems of the trading company and achieve sustained growth and profit. At this point, the distributor faces two things: First, stimulate his "entrepreneurial dream"; Second, the trading company achieves growth and profit. The essence of incentive measures, or the core purpose of the Little Boss Project, is to effectively combine these two. To sum up, what is the Little Boss Project? Simply put, the company provides goods, tools, vehicles, and warehouses, sets basic management and marketing standards, and under unified company goals, lets employees clearly know how much they have done and how much they should get! What kind of distributors are suitable for the Little Boss Project? Seeing this title, you might wonder: since the Little Boss Project is a method to incentivize frontline salespeople, are there distributors for whom it is not suitable? Yes, First, distributors without management thinking; Second, distributors without marketing thinking. 1. Without management thinking The founder of Fan Deng Reading Club once expressed this view in "Replicable Leadership": In the past, the core driving force of management was "fear"—fear of being fired if you don't do well, fear of being fined for not meeting KPI indicators, fear of being at the bottom of rankings, fear of losing face. Ten years ago, if the boss said he wanted to fire an employee, would the employee be afraid? Yes! Especially if they had just bought a house and were paying monthly mortgage. Now, if this place doesn't keep me, there are other places. Why are they not afraid? Because the internet has created more and more opportunities for personal development and survival. Didi drivers, food delivery riders, couriers, WeChat business agents... If distributors still want to manage employees with "fear," it is increasingly unrealistic. Lack of management thinking is also reflected in another aspect: some distributors particularly like to "control," not trusting employees and interfering excessively. Of course, sometimes this is not malicious; they worry that employees won't do well and have a desire to interfere. You might think that maybe managing a bit more would be better. Originally you sold 100 pieces; if you manage and watch, maybe it becomes 120 pieces. More extreme distributors simply don't trust salespeople and want to watch and monitor them. A typical example is installing a sales management system that uses location, photo, and other functions to keep an eye on people. Cao Jun, CEO of Molihutong, said: The more you want to use system software to watch over employees, the more they will figure out how to fake it. In the end, business becomes catching thieves, and the boss becomes the sheriff. Why do distributors like to control? Because they lack a sense of security! The reason is that distributors lack management thinking. Simply put, distributors have never designed work standards and rules. Business management is never achieved by controlling, but by operating through rules and standards. 2. Without marketing thinking The Little Boss Project emphasizes frontline business execution and improving the enthusiasm of grassroots salespeople. So frontline salespeople only need to execute according to the company's strategies and tactics, focusing on the terminal level, actively building good relationships with small shops, negotiating well, seizing terminal display space, and reducing display costs. But often, distributors do not have marketing plans for the market. Simply put, they don't have a "battle map." They haven't thought about how to fight this battle, where to fight, and when to fight. They just recruit a group of salespeople and let them fight randomly. If they win, they are great; if they lose, the employees are not good. In addition to providing hardware like warehousing and distribution and products, distributors must also give salespeople a clear marketing map, standards for expense investment, distribution standards, display standards, visit standards... Therefore, in summary, the premise for distributors to implement incentive assessment is to fully design management and marketing standards. Designing management and marketing standards 1. Designing management standards Regarding distributor management standards, Cao Jun summarized three points: First, attention; Second, fairness; Third, incentives. Frontline employees don't want to be "watched," but they want to be "noticed." For smaller trading companies with fewer than 20 people, salespeople can still be noticed by the distributor in real time. Once the company grows to 30 or even hundreds of frontline employees, it is impossible for the distributor to give equal attention to everyone in daily work. Distributors who use systems should check the system at least two or three times a week, if not daily. They should comment on and publicly praise employees who do well. This is attention, letting frontline salespeople feel the distributor's care. Regarding fairness, in the movie "Let the Bullets Fly," Jiang Wen's character Ma Bangde, when taking office in Goose City, says, When I get to Goose City, I need to do three things: fairness, fairness, and still fairness! Fairness is the most easily overlooked and least valued by distributors. As the saying goes, "One achievement covers a hundred ugliness!" Some distributors, regardless of the situation, only focus on "sales volume." They judge employees solely by daily and monthly sales performance, without considering whether it affects the healthy operation of the market. It is not wrong for distributors to look at performance indicators, but only looking at performance indicators can easily lead to problems. The level of sales in a region depends on the combination of multiple factors. In addition to the employee's personal efforts, there are many external factors, and even luck. To do well in FMCG distribution, outlets, displays, and visits are key. Therefore, when distributors judge employees, they should not only look at sales volume, but also at the basic actions in the visit process. Distributors should create a fair environment for employees: Don't only look at sales volume; while looking at result indicators, also look at process indicators. Regarding incentives, many distributors like to impose fines. But the truth is, fines are not very meaningful. If there are more fines than rewards, the incentive designer has a problem; if there are more rewards than fines, there is no need for fines. Because in China's relationship-based society, as long as 8 out of 10 people are rewarded, the other two are actually punished. These two employees will either reform or leave. Some distributors might say, "I also want to reward, but it costs money." On this point, Xu Min, chairman of Anshan Hongye Hengda Trading, has a set of methods: Points-based quantitative management, zero-cost investment, using points to manage employees. Every distributor has experienced being praised because subordinates did well, but "praising for doing well" is immediate and even repetitive. If you praise too much, it loses value; if you praise too little, employees' enthusiasm cannot be mobilized in time. Points-based quantitative management method. In short, it is to quantitatively assess people's abilities and comprehensive performance using reward points and deduction points, and use software to record and use them permanently. The core purpose is: to give full play to employees' subjective initiative, so that excellent employees don't "suffer losses." For example, for new employee mentoring, the mentor is rewarded 1,000 points; for assisting promoters on weekends to carry out promotional activities, reward 1,000 points, etc. What can points be used for? Many trading companies have the tradition of giving benefits during festivals. How do regular companies distribute? Either equally, by seniority, or by position level, but no matter which form, it is difficult to be fair. Another example: when completing the manufacturer's quarterly task, the manufacturer gives a free trip to Thailand. Who is more suitable for this spot? The most effective way: whoever does more and does better gets it! Match rewards based on points! Ultimately, these points can be used for: travel, gift exchange, red envelopes, salary increases, external learning, and various honors. In addition to attention, fairness, and incentives, I want to emphasize one more point: timely feedback. Before explaining "timely feedback," let me give an example: WeChat's first game, "Fight the Plane." Compared to other games, this is an extremely boring game with pencil-drawn graphics and extremely simple controls, but it was extremely popular back then, and people played it day and night. Why? Because after the user finishes playing, a friend ranking immediately pops up. When they rank first or second, they can take a screenshot and post it on Moments. The ranking result appears immediately after the effort, and the user receives feedback on the spot. If ranked high, they post on Moments to show off; if ranked low, they continue playing, determined to surpass a certain friend. This is the effect of timely feedback. Li Bin, head of Hebei Dunjie Supply Chain, once told me, "We arrange the work of merchandisers like issuing tasks every month, week, and even day. Completing work tasks earns rewards. Let merchandisers' work be like playing a game, like fighting monsters. Every time you defeat a monster, you get corresponding gold coin rewards." Many distributors assign tasks and set assessment indicators for salespeople, but why is the effect minimal? The core reason is delayed feedback. They complete the day's or week's work, but the reward feedback comes next month. Sometimes the delayed reward temptation is not enough to drive the current work of salespeople. Let's make an assumption: if we put a large TV screen in the company lobby or conference room, with data rankings on sales, gross profit, etc. For those with tool software systems, after salespeople place orders, the screen updates immediately; for those without tool software, let financial and administrative staff enter the data into the TV screen immediately after the first day's business ends. When salespeople come back from work or come to work the next day and see the day's or yesterday's rankings, how would they feel? 2. Designing marketing standards Distributors often say, "Whether it's a black cat or a white cat, if it catches mice, it's a good cat." Sometimes distributors treat this as a motto, but for the frontline market, especially in a fully competitive environment, the market needs tactics and strategies, and it has basic operating rules. In a blank or new market, the "black cat, white cat" theory can exist, but in an existing market, marketing standards must be established. Otherwise, each salesperson has their own business methodology, and eventually, chaos will ensue. What are marketing standards? Formulate clear and specific strategies and tactics. Distributors and managers set stage-specific indicators, such as pursuing the distribution rate of a new product, or a stage-specific sales task for a certain product. The company formulates overall strategic goals, and when transmitted to grassroots salespeople, they are no longer goals and strategies, but have been broken down into specific and clear tasks accompanied by incentives. Frontline salespeople just need to execute. Stage-specific key indicators are set according to different stages of the company, product, and brand. For distributors, the two core points are: distribution + sell-through. Variables affecting distribution: stores (existing and new); product (SKU count) + price (product mix, promotional policy rebates); Variables affecting sell-through: display, promotion (material display), consumer promotions, etc. Break down the sell-through and distribution indicators into more detailed sub-items, so that salespeople fully understand and clarify the stage-specific work content. Decompose strategic goals into specific, clear, and easy-to-understand actions, thereby driving grassroots business implementation. When companies do marketing strategic planning, they often use a term called 'top-level design.' New Distribution believes that even for a trading company, in addition to the business direction, there also needs to be top-level design for business incentives: designing management and marketing standards. Design framework of the Little Boss Project Why is it called the Little Boss Project? Because in addition to stimulating the "entrepreneurial dream" of salespeople, the most critical thing is to make salespeople stand on the same side as the boss and have operational thinking! Xu Min once told me that the key to solving sales enthusiasm is to make salespeople stand on the same side as the boss. Whether it's the level of sales, the level of selling price, the amount of expenses, or whether the terminal has credit terms and the length of the credit period, these things must not only be related to the distributor, but also to the salesperson. How to make it related? I will use the sales business dividend reward system of Hongye Hengda Trading as an example: According to Xu Min, the dividend reward for all salespeople accounts for 40% of the total compensation. Salespeople pay extra attention to dividend rewards. To increase dividends for salespeople, Xu Min proposed the theory of "managing 3 1% to bring 29% profit growth." What are the three 1%? Assume standard dividend: Sales revenue - cost = 1 million (gross profit) - (cost + expenses) 900,000 (terminal support expenses and interest on arrears), other income 100,000 (manufacturer investment), multiplied by 10%, the standard dividend is 20,000 yuan.

  1. If the unit selling price increases by 1%: 1.01 million - 900,000 + 100,000, multiplied by 10% = 21,000 (dividend)
  2. If the sales quantity increases by 1%: 1.02 million - 900,000 + 100,000, multiplied by 10% = 22,000 (dividend)
  3. If market expenses decrease by 10%: 1.02 million - 800,000 + 100,000, multiplied by 10% = 32,000 (dividend) When all expenses, including interest on receivables, display fees, promoters, contract rebates, and inventory differences, and even miscellaneous expenses in terminal stores, are related to employees' income, after deep binding, what was originally the boss's business will become the employees' business! In Xu Min's understanding, if the boss wants to expand the business, he must always think about how to help employees increase their income. When the benefit distribution mechanism is properly designed, allowing capable employees to have high income, making some people rich, and having benchmarks, it will naturally drive other salespeople, and then the business can be done better and bigger! The above is a design form of the "Little Boss Project." In past reports by New Distribution, Chongqing Rongchang Mingwang Trading adopted the "Amoeba business model" in its operations, which is also worth reference. In the past, the salary standard of trading companies was based on sales commission: sell how much, get how many points, take how much money, and salespeople only focused on sales volume. In the early stage of Mo Wenbin's pilot of Amoeba management, he adopted gross profit commission and disclosed product operating data to salespeople, so that salespeople always pay attention to the gross profit structure of products. Example: Use gross profit as the salary commission standard (the following is not real data, for reference only), set different gross profit levels corresponding to different tiered commission ratios. Assume a salesperson's monthly "balanced" target is 60,000 yuan gross profit, with a commission ratio of 10%; the "guaranteed" target is 50,000 yuan gross profit, with a commission ratio of 8%; the "sprint" target is 70,000 yuan gross profit, with a commission ratio of 12%. In addition to adjusting and upgrading daily sales income, Mingwang Trading also established an annual dividend mechanism. Ensure that every department and every individual strives toward the business goal of "maximizing sales and minimizing expenses." The specific annual dividend mechanism is as follows: Take annual sales of 100 million yuan as an example (the following is not real data, for reference only) The sales department calculates a gross profit of 12%, with an annual gross profit of 12 million yuan. After deducting service fees of 5 million yuan (the fee is mainly for services provided by the distribution center department, calculated at 5% of sales), and deducting sales team expenses of 3 million yuan, the remaining net profit of the sales department is 3 million yuan. Annual dividend standard: If 3 million yuan is set as the balanced target for the sales department that year, the sales department can enjoy a 10% profit dividend at the end of the year; if only the guaranteed target of 2.5 million yuan is completed, the sales department can only get a 5% dividend; if the sprint target of 3.5 million yuan is completed, the department can get a 15% dividend. To achieve the net profit target and get more dividends, employees will spontaneously consider how to maximize sales and minimize expenses. In fact, comparing the sales business dividend incentive system of Hongye Hengda and the Amoeba business model introduced by Rongchang Mingwang, there are three typical common characteristics: 1. Effectively equate the income goals of salespeople with the business goals of the trading company. That is, as Xu Min proposed, let salespeople stand on the same side as the boss, and as Amoeba advocates, change from "I have to do" to "I want to do." 2. Implement highly transparent operations. From sales revenue to sales cost, to detailed operating expense costs and income, all achieve varying degrees of transparency. Whether it is a salesperson with boss thinking or an entrepreneurial individual, it is necessary to let salespeople have a clear concept and understanding of costs and income, and make them closely related to them. Amoeba emphasizes the operation of "quantity, cost, profit" : how much sales this month, how much gross profit of products, what is the cost, how much the company earns, how much the small organization earns; While management emphasizes "responsibility, authority, benefit" : what rights are given to subordinates, and what responsibilities and benefits correspond to those rights. But if responsibility, authority, and benefit are measured by data accounting as key indicators, quantifying them, it is essentially cultivating salespeople with operational thinking. Understanding the above two cases, the design framework of the Little Boss Project is actually to refine business units, break down costs to each salesperson around the business, and match corresponding benefits on the basis of revenue generation. Precautions for the Little Boss Project The above is the overall thinking framework for business incentive assessment. Finally, let me summarize the key points:
  4. The core of the Little Boss Project requires distributors to cultivate frontline salespeople with operational thinking;
  5. The premise of the Little Boss Project is to design management and marketing standards. Without rules, nothing can be accomplished. Never let employees play freely;
  6. Use accounting as an important indicator to measure employee contributions, quantifying responsibility, authority, and benefit;
  7. Implement highly transparent operations;
  8. Provide timely feedback, implement daily and weekly rankings; points-based management, zero-cost investment, reward according to points, improve employee enthusiasm;
  9. To mobilize the enthusiasm of frontline employees, it is not to let them formulate strategies and methods, but for distributors to formulate scientific methods themselves, so that employees can achieve the goals of the trading company while pursuing the maximization of personal benefits!