Recently, while providing consulting services to a leading company in a certain category, I visited the Henan and Hebei markets and had in-depth communications with its dealers. I discovered an interesting phenomenon: On the positive side, dealers are increasingly aware of digitalization. Many have already started paperless operations, with data collection at the front-end sales, data analysis at the mid-end, and operational decision-making at the back-end all systematized. On the negative side, data analysis capabilities remain weak. Many still process data with the business thinking of a decade ago, greatly diminishing the value of data. Today, I will briefly elaborate on a few of these "inertial thinking" issues among dealers.

01 Outlet Focus Is Always on High-Volume Stores For dealers, high-volume outlets indeed deserve close attention, but another important factor should not be overlooked: high-profit outlets. During dealer visits, we discussed how to manage outlet operations, including sales volume classification, display investment classification, channel priority, etc. However, we never discussed profit classification of outlets. As the smallest operating unit for dealers, the profit contribution of a single outlet is the most easily overlooked. For example, I met several dealers who use systems to rank service outlets by sales volume, define outlet levels based on different sales volume tiers, and then arrange different visit frequencies, investment levels, and sales policies. Is this wrong? Of course not, but it has significant shortcomings. Here's a question: Are high-volume outlets necessarily the most profitable? Could some outlets be just "selling for the sake of selling"? Some outlets might be a bottomless pit for expenses—meaningful but not valuable? Therefore, while high-volume outlets should be monitored, high-profit outlets deserve even more attention. Outlet classification should include not only total sales ranking but also key item sales ranking and profit contribution ranking. What we need are outlets that are both big (high sales) and strong (high profit).

02 Only Focusing on Distribution Rate and SKU Count, Ignoring Customer Acquisition, Repurchase, and Average Order Value Medium and larger trading companies have started using SFA systems to track market distribution rate and per-store SKU count, which is commendable. Distribution rate represents horizontal growth, while average SKU per store represents vertical growth. Dealers, driven by inertial thinking, focus on these two metrics, believing they can effectively boost market sales, but they overlook the conditional constraints. For example, for mature products of established brands, focusing on these two metrics can effectively increase sales. However, for new products of mature brands or products of less established brands, focusing only on these two is insufficient. We also need to pay attention to three additional points: 1. Consumer Acquisition: The idea that if consumers love brand A's product A, they will love brand A's product B is a false proposition. In today's information age, with individualized consumers, brand endorsement power is diminishing. This isn't new; it existed a decade ago. For example, many consumers like Master Kong's black tea but prefer Uni-President's green tea. For consumer acquisition, a few reminders:

  • ** Do consumer trials honestly; the simple, old-fashioned methods are still the most effective;**
  • ** Trials should follow a standard process, strictly adhering to it (product selection, scripts, frequency, sampling, etc.);**
  • ** _After the trial, encourage purchase; purchase is deep engagement, so pair it with promotional items. _** 2. Consumer Repurchase: Repurchase reflects consumer loyalty, which is hard to build. But if we trace back to the root, we find that consumer loyalty stems from the product's ultimate satisfaction of their needs. The carrier of satisfaction is the product, its ultimate quality. Therefore, the first factor in improving repurchase is selecting a product of exceptional quality; otherwise, if the choice is wrong, later promotion efforts are wasted. 3. Increasing Average Order Value: Increasing the average order value is the most overlooked aspect for FMCG manufacturers and dealers. Consumer loyalty is hard to build, but once established, its maximum value should be tapped—that is, the average order value. There are only two ways to increase average order value: one is from buying less to buying more. Common examples include instant noodle manufacturers offering a stool or basin with the purchase of a case, and many companies promoting whole-case purchases. The second is from buying more to buying more expensive. This is also common: many brands upgrade their products, with the core being price increases and profit enhancement. So, the market is changing, and the granularity of competition is changing. Dealers should retain their previous growth methods but also pay more attention to new focal points.

03 The Meaning of Display Is Not Only Aesthetics and Brand Showcase, but Also Competitiveness A decade ago, simply displaying products was enough to sell them, thanks to the demographic dividend. It worked repeatedly. Today, many dealers still do the same. Is that right? Of course. Placing products in the first display position, from top to bottom, left to right, defining the position of each product, certainly helps sales. But is the help significant or minimal? It's hard to measure. Many dealers, driven by inertial thinking, believe that doing just this is sufficient, but it's far from enough. Products on the shelf have a language. Under the impact of the pandemic, consumers are tightening their wallets. They need to read the product's language on the shelf before purchasing. For example, at the same price, they compare product volume; in the same category, they compare ingredient lists; at the same price, they check whether it's a promotional price or regular price. Therefore, when making displays, dealers should also focus on persuasive language for consumers. Through display comparisons (e.g., easily showing price or volume advantages) and through vivid displays highlighting product advantages (e.g., explosive tags noting raw material advantages), consumers can be led to choose your product proactively. This is what I've often said: dealers should place more emphasis on competitive displays.

04 Outlet Visit Service Is Not Only a Process Item but Also a Result Item Dealers now place great emphasis on outlet visit services. Many even strictly require salespeople to follow the eight-step visit procedure and check daily in the sales system. They firmly believe that without process, there is no result. This is correct, but it's far from enough. Visit service is a process, but every process has a result. Let me list a few points: 1. Visit Service Should Ensure Fresh Product Age: The biggest headache for dealers is old stock. They repeatedly tell salespeople before visits, but it can't be effectively prevented. The problem occurs because when checking visit services, they only look at display actions, SKU counts, etc., without paying attention to the product age at that outlet (or even forbidding salespeople from recording it to save time). Even if they do pay attention, they don't give store-specific solutions. The result is that when a large amount of old stock accumulates, they have to spend money to deal with it all at once. 2. The Core of Visit Service Is Maintaining Continuous Cooperation with Outlets: Why do some outlets completely sever cooperation with dealers before the dealer owner even knows? Is it due to cost issues? Competitive battles? Price issues? In short, dealers only see the result, and it's irreversible. How to improve this? One dealer's approach is worth learning from. He requires salespeople to spend a few minutes after each visit writing a visit summary, which should reflect the outlet owner's cooperation attitude, thoughts, demands, etc. Once an outlet terminates cooperation, salespeople who didn't report it in their visit summaries are held accountable. 3. Visit Service Should Ensure Targeted Outlets Are Not Missed: This point concerns new product distribution. Dealers now understand that new product distribution cannot be done randomly; otherwise, the more you distribute, the faster it dies. Targeted outlets are needed, but "targeted" is often vague, decided by inertial thinking on a whim. For example, defining that a product can only be distributed to B-class stores. The definition of B-class stores is itself vague. Are B-class stores necessarily the targeted outlets? The results are naturally unsatisfactory, and you may also lose goodwill with some B-class stores. Therefore, dealers need to define more precisely. For example, for a convenience noodle product retailing at 20 yuan, the targeted definition could be: 1) B-class and above stores; 2) stores that sell Tang Daren and Shin Ramyun; 3) Tang Daren and Shin Ramyun have fresh product age. Only then can it be truly "targeted."

05 Inertial Standards and Inertial Tasks A couple of days ago, I chatted with a dealer about the relationship between salespeople's tasks and execution standards. The first half of 2022 ended, and out of his ten or so salespeople, four completed their half-year tasks. An interesting phenomenon emerged: those who completed tasks did not meet process execution standards, while those who didn't complete tasks actually met the standards well. Why? Could it be that those who follow orders fail to complete tasks and earn less? After reflection, the dealer realized his execution standards were blindly copied from the brand's standards without deep consideration of his own market conditions. His task targets were also blindly assigned from the brand's targets without studying each person's capabilities. This situation is common. Many dealers simply and crudely break down the brand's targets when setting standards and tasks, acting as a relay. This is essentially extremely irresponsible. They should study their own personnel and market to develop reasonable and feasible execution standards. Standards are meant to help the frontline better achieve tasks.

Final Thoughts: After discussing these issues with several dealers, many felt enlightened. In fact, these five cases are just a microcosm of dealers' daily management. I believe many dealers will resonate. The things we take for granted are actually affecting our sales and profits. What's often missing is the awareness that today's market and competition are changing subtly. Many dealers are like frogs in warm water, gradually adapting. Therefore, dealers must change. Take a deep look at what you routinely do, and you can break through. Re-examine your operational thinking, break inertial thinking, and establish a new management system. Go out and explore. Marketing is often like a window paper; communication and learning can poke through it. Open your horizons and take your company to the next level.

-END-