Distributors rely on downstream customers for their livelihood, and the quantity and quality of these customers largely determine the distributor's overall sales performance and profit contribution. Development of downstream customers is an ongoing process, as only a few distributors achieve 100% coverage of the local market. Moreover, the downstream customer base itself is dynamic, with new stores opening every day, so development efforts must be sustained. Distributor owners are aware of the necessity for continuous development, but the actual implementation is often straightforward and direct, typically requiring all sales personnel to take on the development of new outlets. Of course, some owners offer additional incentives, such as a fixed amount per new outlet developed. However, the problem is low development efficiency; sales personnel show little interest in developing new outlets, and the efficiency is low, with few outlets opened per month. Additionally, the mortality rate of newly developed outlets is high, often resulting in only one order and then no further contact. The low efficiency in developing new outlets cannot be blamed on the sales personnel or the outlets themselves. The main reason is that the owner's approach to new outlet development is too simplistic, lacking overall planning and a systematic process, as well as quantitative standards and operational procedures. There is also no development strategy; it's just direct and to the point. In the matter of new outlet development, certain basic processes and routines are necessary:

  1. Clarify the types of terminals: That is, how many types of terminals exist locally, such as hypermarkets, chain supermarkets, department stores, tobacco and liquor stores, small supermarkets, small restaurants, chain restaurants, and small shops in wet markets.
  2. Total number of each type of terminal: Although 100% development is not feasible, at least know the total number of each type of terminal in the local area.
  3. Set coverage rate targets: This refers to the distribution rate, which includes two indicators: the distribution rate within each type of terminal (e.g., distribution rate in department store terminals) and the overall distribution rate. Of course, 100% is impossible; set a reasonable value based on your actual service capacity.
  4. Outlet quality targets: In addition to quantity targets, there should be quality targets. The quality of downstream customers is mainly reflected in two aspects: one is the proportion of high-end and new products, generally considered qualified if it reaches 20% or more. The other is the level of cooperative relationship, whether it is average, poor, or good. This cooperation, also known as customer relations, involves mutual respect and directly affects order volume, display position, and even settlement efficiency.
  5. Basic setting of development targets: Since 100% coverage is impossible, distribution is selective. Therefore, corresponding development targets must be set, i.e., what kind of customers are worth developing. Generally, this should be based on the following factors:
    • Location: Whether it overlaps with the current normal delivery route. If it's too remote, driving dozens of kilometers to deliver 300 yuan worth of goods to a supermarket is a losing deal.
    • Store reputation: This needs to be investigated. Do not deal with store owners with poor reputations, as it may jeopardize profits and even payment collection.
    • The main customer group and consumption level of the store: Whether it matches the company's main products. Expecting a supermarket in an old factory residential area to promote imported high-end red wine is off track.
  6. Map-based marking: Set up a large local map and mark the geographical locations of various outlets. Generally, there are three types: currently operating outlets, planned development outlets, and known but not planned outlets (even if not developed, they should at least be marked).
  7. All-staff development or dedicated specialist: The traditional approach is all-staff development, where every salesperson is responsible for developing new outlets. Actually, this is unnecessary because considering the actual situation, developing new outlets requires higher professional skills, communication skills, psychological resilience, and even appearance. Not all sales personnel possess the ability to develop new outlets. Sending incapable salespeople to develop new outlets not only reduces efficiency but also harms the company's image. Therefore, consider selecting one or two salespeople with strong comprehensive abilities from the sales team as development specialists. Of course, they should not only do development work; they should primarily handle regular business, setting aside a few days each month for new outlet development.
  8. Preliminary groundwork: The most taboo thing in new outlet development is rushing in directly. At least other sales personnel should conduct basic street-level research, collecting basic store information such as operating status, owner (with photo), main products, communication characteristics, and peak and off-peak seasons. This information should be provided to the development specialist as a reference, improving the efficiency of their in-store communication.
  9. Establish relationship first or get order first: The traditional development model hopes to get an order on the first visit, which the owner considers successful. This requirement seems quick and direct, but the actual effect is poor. After all, on the first contact, there is no established recognition or trust, making it difficult to get an order. Even if an order is obtained, it is small and adds significant pressure on the development specialist. Therefore, the first one or two visits should focus on building relationships, not rushing to get orders. Around the third or fourth visit, shift focus to orders.
  10. Prevent dead orders: Some stores only place an initial order and then go silent. These are called dead orders, mainly because salespeople are greedy for large orders and fail to manage the first order well, overemphasizing sales volume (i.e., their commission), which chokes the store with the first order. In setting the first order, it is essential to control the total volume, generally leaning towards smaller rather than larger, and the product mix should align with the store's sales characteristics. If necessary, consider (third-party) buyback measures to ensure the store's confidence in the first order. Author: Pan Wenfu Originally a private business owner, he managed a family-owned distribution company for many years, during which he also served as a business manager and trainer in several manufacturing companies. His research focuses on internal management of small and medium-sized private enterprises, with main topics including personnel management, cost control, management backend setup, and the integration of retired military personnel into private enterprises. He continuously breaks down over 400 topics related to internal management of private enterprises and keeps updating his material collection and solutions. -END-