Click to read the original article for details Lao Zhang has been a beverage distributor for over a decade, making him quite senior in terms of experience. However, his business performance since the pandemic has left him feeling helpless, like "an old revolutionary facing new problems." Channel sell-through has declined noticeably, manufacturer tasks have only increased, delivery costs have risen, and personnel efficiency continues to drop... Facing these issues, Lao Zhang has been actively communicating with the manufacturer's business supervisors, and even secured some promotional resources, but with little effect. In desperation, he had to reduce his sales staff to temporarily alleviate the business crisis. One day, Lao Zhang received a call from the manufacturer's business supervisor, saying that the sales director would visit his market the next day. The supervisor explained that more and more customers were in similar situations, which had drawn high attention from the manufacturer's group. An emergency special meeting was held, requiring management at all branches to personally visit core customers, understand the current business situation, and quickly help customers sort out and solve problems to boost their confidence. Lao Zhang specially prepared a notebook to list his concerns in advance, determined to seize this opportunity to communicate with the manufacturer's senior management. 01 Consensus on Market Issues is the Foundation Lao Zhang initially thought Director Li would come straight to his office for a meeting, but unexpectedly, Li went directly to the market. Even the business supervisor didn't know his whereabouts. It wasn't until a salesperson messaged that Li was visiting terminal customers with him that Lao Zhang hurriedly drove over. After exchanging greetings, Li told Lao Zhang, "Let's walk the market first to see how business is done and hear what store owners say." Lao Zhang immediately felt admiration, as he had seen too many manufacturer leaders who only talked theory in recent years. He strongly agreed that without investigation, one has no right to speak. After half a day of walking, Li and Lao Zhang sat down by a community supermarket to discuss the current business situation. In terms of business execution, Li initially summarized three main issues. 1. Low awareness of promotional information, failing to boost sales. Whether it was the in-box code promotions for terminals or the 20% "scan code for red envelope" consumer promotion, nearly half of the store owners and consumers were not clear about them during the visits. The sales staff lacked focus in basic in-store actions and were not proactive enough, greatly diminishing the effectiveness of resource investment. 2. Unreasonable planning of business visit routes, leading to low visit efficiency. With an average of 40 visits per day, the quality of outlets varied greatly. Many stores with little or no sell-through remained on the visit routes long-term, while several nearby high-potential large stores were not included. Moreover, the route order was chaotic, with salespeople visiting according to their own whims, essentially losing control over order status in their areas. Disorderly visits lead to two outcomes: one is affecting terminal customer relations, and the other is increasing delivery spans and costs. 3. Unreasonable allocation of channel expenses, with many quality stores severely neglected. In terms of expense investment, salespeople tended to choose stores where owners were easy to communicate with and had good relationships, lacking basis in sell-through and location dimensions. After listening, Lao Zhang felt that Director Li was a pragmatic leader who identified very specific problems that he himself had overlooked. But how should these problems be solved? Would solving them improve the market? Seeing Lao Zhang's puzzled expression, Li said, "Now we can go to your office and have a good talk." 02 Digital Management Awareness Needs to Be Strengthened After Lao Zhang's sales team gathered, Li drew a diagram on the whiteboard. Li explained that in the past, market operations only required products to be available in terminals and visible on shelves. By leveraging their category advantages and the eight-step visit execution requirements, they could continuously penetrate more stores and displays to quickly achieve sales targets. But today, with economic and mobile internet technology development, consumer demand has been rapidly unleashed, products have entered a stage of intense homogenization competition, and consumers have become picky, placing higher demands on brand manufacturers. We not only need terminals to have a stronger willingness to actively sell, giving more advantageous positions and even proactively promoting, but also need consumers to quickly perceive the differentiated selling points of products and have a stronger purchase intention. Therefore, business actions must closely revolve around this principle, achieving precision visits, differentiated deployment, and high cost-effectiveness investment. And what does all this rely on? It's also the topic Lao Zhang might be most concerned about now—the answer is digitalization. But digitalization has a prerequisite to truly deliver value: manufacturers and distributors need to reach a consensus and have a consistent judgment on market issues. Only then can we truly achieve a management closed loop in areas like digital monitoring and supervision of sales scenarios and sharing of marketing big data. Next, Li detailed the manufacturer's progress over the past two years and the next-stage layout. The more Lao Zhang listened, the more excited he became, feeling he had indeed overlooked many things. He realized that the consumer scan-code promotions and in-box codes currently in use were not just tools for the manufacturer to distribute red envelopes; they were also highly relevant to him. Lao Zhang's face gradually showed confidence. 03 Complementary Advantages to Form Marketing Synergy Li continued, "Next, let's discuss specific solutions for the issues we saw in the market today." He first shared his own ideas.

  1. Since the manufacturer provides promotional and channel resources, we must make the best use of every penny, truly stimulating terminals and informing consumers. Therefore, we need to set clear standards for business actions and leverage digitalization to create a visualized reward and punishment ranking for business actions.
  2. Route management is key to improving business execution. We need to replan each salesperson's visit route. Given the manpower shortage, we should classify terminals into four levels (A, B, C, D) based on actual sell-through, ensuring that A and B outlets are included in routes with priority and high-frequency visits. At the same time, route planning should follow the right-hand rule of actual visits to ensure order rationality and safety, avoiding disorderly visits. This also needs to be more precisely achieved through our digital system.
  3. Regarding channel expenses, we must avoid issues like lack of focus, non-targeted spending, and low cost-effectiveness. We must compete for the outlets that need to be fought for and not invest a penny in those that shouldn't be invested in. We should fully leverage the big data accumulated in backend systems from SFA, in-box codes, and consumer promotions, making expense allocation evidence-based, securing the best in-store sell-through positions, and not wasting a single bullet.
  4. In addition to the manufacturer's resources, Lao Zhang also needs to actively leverage his own advantages. He shouldn't just focus on big stores and neglect small ones. He should use local customer relations to help salespeople quickly push competitors out of core channels, expand channels, and in fiercely competitive areas, allocate some funds for extra incentives to salespeople, encouraging the sales team and delivery drivers to provide good service and dig deeper into market opportunities. 04 System Integration and Full Data Sharing After listening to Li, Lao Zhang also shared his thoughts. He fully agreed with Li's judgment but had many questions about the digital aspects of the solutions, not knowing where to start. Lao Zhang had always felt that digitalization was the manufacturer's business. His team already used SFA, but only for placing orders and compiling statistics; he didn't see it as powerful as Li described. Li said, "Actually, as a brand owner, we have neglected communication with distributors in the process of promoting enterprise digitalization. Only when manufacturers and distributors advance together and resonate at the same frequency can we truly implement strategies and form synergy." Li said that after this meeting, they planned to optimize management from the following aspects so that every distributor could also enjoy the dividends of the digital strategy, allowing manufacturers and distributors to develop and progress together. 1. Full sharing of marketing data. The manufacturer's internal analysis of sales data is much more powerful than that of distributors. We will regularly export data analysis from platforms like SFA, consumer and in-box code scanning systems, covering dimensions such as market placement rate, outlet activity rate, consumer scan rate, scan time periods, gender ratio, and other consumer profiles. These insights should be shared with distributors to help them better understand their own market conditions and form consensus with the manufacturer. 2. Accelerated integration of internal and external systems. Currently, the systems are information silos. We will develop plans to accelerate system integration, and we need your active cooperation. For example, linking in-box codes with the SFA system so that when our salespeople visit outlets, more customers complete basic information registration, which is then precisely matched with outlets in the SFA system. For core outlets, we hope to collect more personal information like customer birthdays and ages, preparing for the next step of building a private customer operation system. At the same time, in-box code opening data is an important basis for evaluating the input-output of expenses. Based on this, we can rank stores by contribution, set resource investment standards with order growth as the goal, and more reasonably optimize salesperson visit routes and frequencies. 3. Holding joint digital project meetings. Throughout our digitalization and market problem-solving process, I will require the manufacturer's team to conduct a review and summary with you every half month, tracking problem-solving progress, evaluating the quality of digitalization, and involving distributors in the development of some system functions and reports to truly meet the multi-dimensional needs of both manufacturers and distributors. 05 Data Empowers Organizational Performance Optimization To help Lao Zhang understand the significant value of digitalization in solving market problems, Li briefly introduced some application scenarios after the entire digital system is built. 1. In-store execution warning and scoring. After a salesperson completes an in-store visit, they take photos of product displays and upload them. The system will score in real-time and issue warnings based on preset execution standards and weights. For example, if promotional information is missing, the system will display "Promotional material not recognized" and deduct 5 points. If the placement is not conspicuous, the system will promptly prompt with standard success images, urging the salesperson to improve immediately. This continuously reinforces execution priorities, allowing salespeople to earn more scores and bonuses. 2. Automatic business route planning. For daily visit routes, the system will automatically assign sequence numbers based on actual visit paths, minimizing transit time between outlets. When a salesperson clicks to enter a store in the SFA system, the store's in-box code scanning situation and expense investment will be immediately displayed, helping the salesperson quickly understand recent sell-through. It also suggests visit times based on the outlet's sales level in the day's route, helping salespeople manage their time better. For outlets with persistently poor turnover, the system will automatically include them in zombie outlets after requiring the salesperson to pay attention three times, while also requiring the salesperson to add new outlets within a deadline to maintain overall visit volume. 3. Quantitative evaluation of regional markets. Each month, the digital system will provide a comprehensive business score for each regional market, along with business analysis and change curves for various dimensions. For example, the decline ratio of salespeople's in-store execution scores, changes in core outlet opening rates, changes in resource investment efficiency (resource investment amount / number of opened boxes at invested outlets), and changes in activity rates. Additionally, in the problem tracking module, all problem indicators can be quickly broken down to individuals, routes, and outlets. 06 Project Cooperation to Build Marketing Barriers After Li finished, looking at Lao Zhang who was silently nodding, he said, "Mr. Zhang, today there's more. To enhance our market competitiveness, I've brought a new project this time. I'd like to pilot it in your market." Lao Zhang immediately stood up and applauded, "Director Li, you're really providing timely help. I must support it." "This is a project in cooperation with an external third-party company. Besides steadily advancing our own digital transformation, we also need to learn to 'borrow a boat to go to sea'." Currently, a major trend in the digital development of the FMCG industry is for enterprises to use digital tools, leveraging the LBS advantages of mom-and-pop retail stores, to establish deep connections between brands and consumers. This is a distribution model that completes the connection and marketing activities with C-end consumers in the communities around small stores. For many enterprises, building this model is a process of gradually improving digital infrastructure and accumulating traffic, which takes a long time. Now, there are some well-known third-party platforms that have traffic entrances for a large number of our terminal users and consumers. We can leverage their system connections with terminals to carry out more flexible promotional innovations and brand promotions in terminal stores, while easily achieving public domain traffic diversion, understanding our consumers more quickly, building our own private traffic pool, and conducting precise fan operations ahead of competitors. After hearing this, Lao Zhang strongly agreed and was willing to pilot the project with Li, track and evaluate it, strive to quickly reverse the market's sluggishness, and export more excellent experience to other markets. After speaking, Li and Lao Zhang shook hands firmly. Digitalization is an important indicator for building core competitiveness in the future, but the entire transformation process requires full consensus and joint efforts between manufacturers and distributors. Only by moving in step can we go far and steadily. Manufacturers lead, distributors assist, resources complement each other, mutual empowerment, and continuous improvement—this should be the better interaction posture between manufacturers and distributors at this stage. May more excellent manufacturers and distributors, amid the wave of digital development, stay true to their original aspirations, work together with one heart, and overcome difficulties together. [Ye Licheng, National Sales General Manager of Genki Forest] Salute to channel partners, meet in Chengdu, August 31 - September 2, 2022 (7th) China FMCG Channel Innovation Conference. -END-