This is the worst of times and the best of times! As we enter 2016, market competition has become even more brutal, with more distributors joining the red ocean of promotional wars. One major event a month, small events every week—the result of frequent activities is fewer customers entering stores, increasingly exhausted staff, and owners making less money. But what to do without promotions? Now it's: no promotion means waiting to die, promotion means seeking death; seeking death is better than waiting to die, so treat a dead horse as if it were alive. But can promotions win future market competition? Philip Kotler's marketing theory has four Ps. When we focus all our attention on the promotion P, it's easy to overexert in that area, ultimately suffering from the chronic ailment of nutritional imbalance and indigestion.
Wait, Mr. Philip Kotler's promotion P doesn't solely refer to promotional activities. According to his wisdom, any behavior that can promote sales is called promotion, so the term promotion also includes personal selling, advertising, public relations, and promotional activities. But looking at today's business practices, everyone treats promotional activities as a panacea to drive terminal sales, unaware that this medicine is like drinking poison to quench thirst, and will eventually lead to disaster.
So, what aftereffects will result from relying on promotional activities to boost volume?
- Product prices become more transparent, and distributor owners' profits become thinner.
- Brand image degenerates toward low-end, directly causing high-end customers to abandon purchases.
- Sales personnel's abilities sharply decline; they cannot truly create value for customers, only price matters.
- Profit dilution will lead distributor owners to reduce the quality of customer service.
- Short-term sales boosts can cause distributors to be blindly optimistic and neglect operational focus. ...
For a distributor owner with strategic vision, the question to ponder is "What should I do tomorrow?" If distributor owners are always busy with immediate matters, they will face more challenges in the future. So regarding promotions, there's no need to be troubled between doing and not doing. Doing is definitely necessary because without it, you can't survive the present. But you must know one thing: promotions are not a lifeline; what will my future profit model and sales growth rely on?
The expert team of Li Zhijiang Marketing Agency researched multiple consistently profitable distributor owners and derived the following experiences and rules for reference:
1. Innovate profit models. The traditional profit model for distributor owners is the "selling cabbage" approach of earning price differences, but this single profit method will inevitably be eliminated in the future. The internet has disrupted many industries because among the nine major thinking modes in internet thinking, two cannot be ignored: user thinking and free thinking. First, focus on users and create value for them; how to profit is the next step. In a word, "those who gain users gain the world."
2. Build a distributor brand. The biggest feature of the Internet+ era is channel fragmentation and content personalization. In this context, many traditional industries have been challenged. Fast-fashion brand stores like H&M, C&A, and GAP have overturned the rules of the traditional apparel industry. The power of manufacturer brands will weaken in the future, while distributor brands will rise.
3. Build diversified sales channels. Following the second point, since channels are fragmented in the Internet+ era, customers can buy both offline and online, so customers have more choices. They can buy however they want, whichever is convenient. Distributor owners building diversified sales channels aim to create purchasing convenience for customers, making your products appear within their sight. Deep distribution is a challenge many distributor owners will face in the future. I have proposed three models of deep distribution: horizontal distribution, vertical distribution, and cross distribution. For a distributor owner, planning sales channels is not as simple as opening a store and doing retail.
4. Create CS service experience. My university major was marketing, and my graduation thesis was titled "CS and Fuzzy Mathematics." At that time, CS meant customer satisfaction, but today in the Internet+ era, CS means customer screaming (delight). Why do customers prefer shopping online? Is it just because it's cheaper? Obviously not, because online can create a CS experience that makes customers scream. For example, when I come to your store, the staff calls me "Sir, hello," but when I buy something online, what does the customer service girl call me? She calls me "dear," and even more exaggerated, Three Squirrels calls customers "master." Which address makes customers feel better?
5. 1+N store layout. On this point, I once wrote an article "Distributor 1+N Store Opening Strategy." The future regional market layout will definitely be one large store plus N small stores. The large store mainly carries the function of customer experience. To put it bluntly, the large store is for brainwashing customers—when they walk in, they feel they need this lifestyle. The N small stores help customers buy conveniently, provide services, and serve as brand promotion.
6. Who is the real boss? Some distributor owners, though their business is not large, particularly enjoy the feeling of being the boss, ordering subordinates around as if they were emperors. But every dynasty that didn't manage society with systems but relied on imperial centralization had problems and eventually perished. As our teams become younger, no one likes to work for you; every employee works for themselves. On this point, Charles Handy proposed the "shamrock organization" concept long ago, and Professor Chen Chunhua recently published a book called "Activating Individuals," which contains inspiring viewpoints. In short, the position of boss may disappear in the future; you can only be called an investor, and the title of employee will become "partner."
7. Customer value management. How can distributor owners maximize customer value? The traditional way is to sell products to customers and create added value in the process of providing products, such as various front-end and back-end services, giving customers a service experience completely different from competitors. Today's distributor owners are thinking about how to maximize customer value: extending the product line front and back, cross-industry operations. What you sell doesn't matter; what matters is what customers need and what you can do for them.
8. Self-positioning of distributor owners. Whether to be strong or big is a strategic question. When distributor owners hold the mindset of being strong, they may not need to be big; focus on being small and beautiful, serving niche markets. This type of distributor is an "entrepreneurial distributor" with excellent product quality, service exceeding customer expectations, and rapid iteration. When distributors hold the mindset of being big, they are "platform distributors." Distributor owners build platforms, integrate various resources to maximize sales scale, though profits may not be as perfect as imagined.
At the request of many distributor friends, the third B-end e-commerce inspection class of this public platform will visit three platforms—Wanshang Yizhan, Yunbao Shangmeng, and Weijie Chengpei—from July 9-12. Distributor friends with transformation intentions can join us for on-site inspection:
Organization Form
- Company visit
- Actual market case visit
- On-site explanation
- One-on-one communication
Participating distributor friends only need to pay a registration fee of 200 yuan. Time: July 9-12, 2016. Location: Changsha, Xiamen.
Interested distributor friends can register by long-pressing the QR code below.
When adding friends, please reply "Third Registration".
Previous Inspection Enterprise Cases:
Yishang Logistics Model Inspection (Second B-end E-commerce Inspection Group Yishang Logistics)
Caiba Model Inspection
Jinhuobao Model Inspection
Beiquan Model On-site Inspection
Piduoduo Model On-site Inspection
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