Scan the QR code in the image to register Today I chatted with Boss Li, who runs a small business with annual sales of 200 million yuan. From his words, I could feel the difficulty of doing business this year, especially making a profit. We talked a lot, from strategy to tactics, from corporate structure to management, and finally returned to the essence of business—profitability. In the afternoon, I followed Boss Li to visit his workshop and warehouse. In one warehouse, there were many materials scattered around, including posters, price tags, drapes, gift boxes, etc. I immediately asked, "Are these all waste?" Boss Li replied, "Probably. We dispose of a batch regularly. Market expenses are allocated to marketing agencies; they submit requests, the company produces, then distributes. These are leftovers from event marketing activities that couldn't be used." I smiled and said, "If these things were planned properly, you could save hundreds of thousands of yuan a year for the company—enough for year-end bonuses." Boss Li was stunned. In fact, the issue of profitability is about increasing revenue and reducing costs. Increasing revenue means boosting sales and product margins, which requires long-term strategies that all companies take seriously. However, cost reduction is often overlooked by many SME owners, and the measures for cost reduction can be implemented without long-term planning. Point-of-sale (POS) materials have always been an important tool for channel refinement, and thus they get a green light in market expense approvals. But often they act like a small knife, constantly stabbing at the company's profit nerve. Today, let's discuss this cost-saving matter in detail. First, let me emphasize: Cost reduction means saving unnecessary losses without affecting normal use. -01- Material Planning and Usage Standards When it comes to material planning and usage standards, many companies' marketing departments are familiar with it, but in my view, many companies' material plans and standards are made on a whim. From bottom to top, it looks like layers of reporting and review, but in reality, each level first makes a guess, then pats their chest in assurance, and finally pats their backside (i.e., shirks responsibility). Material planning falls into two categories: planned and unplanned. Planned materials are for routine POS deployment at outlets, including posters, push-pull stickers, price tags, table stickers, etc. So, the material plan should first consider the number of cooperative outlets served by the business, then the channel attributes of those outlets, and finally the material update cycle. For example: Salesperson A applies to produce restaurant table stickers. He serves 200 outlets, of which 100 are restaurants. On average, each restaurant has 10 tables. After negotiating with store owners about posting fees, the stickers need to be replaced every 1.5 months. So, his quarterly application quantity would be 2,000 stickers, plus 5% for wastage, totaling 2,100. Unplanned materials are for sudden event marketing, such as promotional activities requiring banners, KT boards, models, etc. So, first consider the usage environment and frequency, then whether the material has later value, and finally the recycling of materials. For example: Holding a new product tasting event at a mall in cooperation with a platform for a morning, you need banners, KT boards, tasting tables, etc. Obviously, with specific co-branded logos, these materials cannot be reused later. For banners and KT boards, use cheaper materials as long as the visual effect is not compromised. Tasting tables have later value, so you can use better materials. Assign specific personnel for material recycling to avoid loss and negative publicity. In short, material application plans must be calculated, and before calculating, you must first research the market. The marketing department's job is not to approve reports from the office but to go deep into the field to understand, otherwise, waste of market expenses is inevitable—money will never be enough, and you'll always be deceived by the execution team. Usage standards should be specific. For example, posters should be placed high rather than low, inside rather than outside; price tags must be fixed with double-sided tape; KT boards must be mounted on solid walls. Every material should have its own usage standard to ensure its effectiveness over time. Of course, some might say these things can't be implemented at the grassroots level—that's a problem with your execution and incentives. -02- Execution and Incentives for Material Usage Let me share a case from Jinmailang. At that time, Jinmailang had the highest usage rate and longest lifespan for POS materials among all companies I know. The reason is simple: human nature cannot be defied. Jinmailang's material incentive system was: 1. Posting a poster earns 1 point, posting a price tag earns 1 point, etc. Each POS material is assigned a point value, and points are money. 2. On the next visit, if the POS material is still there, the reward continues, and you can claim it every week. Human nature is inherently lazy. To achieve long-term benefits with one effort, you must ensure the durability of materials. The company provides methods to maintain materials and offers training. Thus, the grand POS material deployment began. To keep materials durable, salespeople used ladders and wire to reinforce banners high and strong, wiped walls clean before posting posters, and even used super glue for price tags. They also went to extremes to protect materials. If other manufacturers' salespeople covered or were about to cover them, they would call to resolve the issue. As a result, you often see faded posters, weathered banners, and deformed price tags from prolonged consumer friction in the market. Jinmailang's incentive system exploited human laziness to reduce material wear and tear, and used the human tendency to seek benefit and avoid harm to stimulate the desire to protect materials. Let me summarize: 1. Training on material usage is essential. Business skills cannot rely on passion; they must be taught. Training content must be simple, easy to understand, and easy to operate. 2. Incentives should trigger primal instincts. The result of incentives is not management; it's the inevitable transformation of management into motivation. 3. Be good at accounting. Use the saved material costs for human efficiency incentives to fully enhance personnel's enthusiasm for efficient material use. -03- Self-Inspection and Auditing Are Essential Where there is interest, there is conflict. If you give incentives, you must ensure authenticity. I always emphasize: False incentives are more terrifying than no incentives. I once encountered a situation where a mineral water company did a concentrated POS deployment before the peak season to create market atmosphere. They required the team to place new product KT boards in key outlets to build consumption scenarios. The incentive was 5 yuan per board, and 10 yuan for exceeding the target. As soon as the policy was announced, everyone mobilized, and KT boards swept the market. But it was only superficial prosperity. A week later, more than half were confiscated by city management. The loss was not just material costs but also team time and market opportunity costs. The core of management is not trust but guidance. Generally, human nature cannot withstand tests; in the face of interest, people often take chances. Therefore, self-inspection by market execution personnel and audits by the audit team are essential. To improve efficiency, I suggest first checking photos in the terminal system to assess the pass rate of material usage, then arranging field visits. -04- Material Mechanisms and Assessment Let's do a simple calculation: a poster costs 1-2 yuan, a price tag about 0.1 yuan, KT boards 20-50 yuan per square meter, push-pull stickers 2-5 yuan per pair. For a prefecture-level city market, a leading brand will spend hundreds of thousands of yuan on materials annually, and some manufacturers even offer special deployment bonuses, making costs even higher. So, the purpose of setting up mechanisms is to maximize brand display + maximize material savings + maintain proper inventory records + ensure traceability and accountability. The core is: 1. Set POS requirements for outlets, i.e., deployment must not be below a certain standard (e.g., at least one poster + two price tags + one pair of push-pull stickers per outlet). 2. Based on achieving the above, calculate the minimum material requirement, and apply for materials only as needed—no plan without demand. 3. Keep proper inventory records with a ledger, assign a dedicated person, and track the progress of material usage within the planned timeframe. 4. Ensure traceability and accountability: the planning, approval, warehousing, allocation, outbound, and deployment processes should be efficiently linked, so problems can be traced and corrected. Regarding material assessment, my suggestion is to use all the money saved on materials for team incentives. For example: Last year's material cost was 200,000 yuan; this year it's 150,000 yuan. If all POS indicators are met, the 50,000 yuan saved can be used for team incentives. This not only stimulates the team's initiative but also strengthens their cost-effectiveness control and awareness of protecting POS materials—killing two birds with one stone. One reminder: It's not advisable to treat the saved costs as company profit; otherwise, your material plan won't be sustainable, and in the end, you'll spend the same amount but with worse results. Final Thoughts: During my time serving Jinmailang, I deeply felt: What does it mean to lead in total product cost? What does it mean to refine everything and spend money on key points? Indeed, Jinmailang gives the impression of being affordable—a pack of 24 bottles of softened water has an ex-factory price of only 6-7 yuan. How meticulous must their cost control be to achieve this? In contrast, some SMEs with annual revenue less than one-tenth of Jinmailang's spend lavishly on various expenses. Material costs are just a glimpse of the whole picture, yet they justify it by saying they don't want to affect team morale or that they lack the management capability for fine-tuning. Finally, I want to tell business owners: Those who look down on small money can't make big money; those who overvalue small money can't make money either.