Source: Teacher Liu's Forum (ID: liuchunxiong1964)
01 Sales issues are now a "collective puzzle" and "collective helplessness" for most companies. Because the FMCG industry has long entered a period of sales capping, some companies have even become accustomed to no-increment marketing. Generally, after three consecutive years of no growth, companies get used to no-increment marketing. I once saw a company where even the sales target was declining year after year. But excellent companies and excellent marketers always find a way. Whenever there is collective confusion, there must be companies or individuals who stand out. I have a famous saying: Everyone's difficulties are always the opportunities for the excellent. In fact, the rise of every company is the dual result of seizing strategic opportunities and creating new marketing models.
02 Let me first give a few cases, otherwise it's too abstract and some won't be convinced. A month ago, I visited the Lidu Distillery in Jinxian County, Jiangxi, for study. The company is not large, but there is much to learn and think about. This factory was once very poor, selling poorly even at low prices, changing general managers almost every year, until the current general manager Tang Xiangyang took office four years ago. Interestingly, Tang Xiangyang's assessment of salespeople initially had sales volume accounting for only 10% (even now it's only 20%). What was mainly assessed? The experience of core customers. They found that as long as customer experience was good, it could quickly convert into sales. Now, they call this model "immersive experience" and aim to be the "number one player in immersive experience." This is where Tang Xiangyang is formidable. Sales volume is the result; what work can bring sales? Salespeople may not know, but the boss must know. Take the work process that brings sales as the main assessment indicator. When the work is done well, sales are achieved. I call this approach a "marketing system driven by experience." This method is very effective in the promotion process of product upgrades. Since it's a marketing system driven by experience, we need to make experience more widespread, which I call "pan-experience." Thus, the system of big temple (headquarters experience), medium temple (county-level experience), and small temple (township-level experience) was established, and the five links of immersive experience were enriched. What were the results? Over the past four years, sales have almost doubled every year, with mainstream product prices at 200-300 yuan and high-end prices already exceeding 700 yuan.
03 Another case. In the agricultural materials industry, pesticides and fertilizers have seen "zero growth" or negative growth for many years. This is something the General Secretary has spoken about and made demands on. However, in such an industry where everyone is accustomed to no growth, one company has been growing at over 200%. 2 billion, 7 billion, over 20 billion. These are the sales figures for a single product of a company called Lveyeyuan from 2016 to 2018. Although this year is not over yet, it has already exceeded 20 billion. 20 billion is considered the industry leader in the pesticide formulation industry. And the boss of this company started as a rural agricultural materials retail store owner in Fugou County, Henan. Their approach is: make customers fewer, make customers bigger, and make users more. Here, customers refer to distributors and retail stores, which don't need to be many. Users refer to farmers, the users of pesticides. Making users more, I summarize as "high-density marketing," because in the past, the agricultural materials industry was almost entirely low-density marketing. High-density marketing brings a benefit: companies can take root in an organized way and demonstrate to farmers. Of course, just taking root is not enough; the company declined for two years. They need to both take root and amplify. Coincidentally, leveraging the advantages of the internet, they hold on-site meetings. One salesperson averages 200 on-site meetings a year. One executive held 32 on-site meetings in 31 days in July, with at least 600 people per meeting. What is the purpose of on-site meetings? It is to let farmers experience the effects on-site, which is also the result of "pan-experience." Under the premise of taking root (test fields), they use internet means to mobilize farmers and let them experience on-site. On-site meetings become the main method for rapid conversion.
04 Since 2005, when I served as deputy editor-in-chief at "Sales and Marketing" magazine, I raised the topic of "sustained sales growth" and organized articles around this topic for several years. Please note that I proposed not "sales growth" but "sustained sales growth." The current sales problems of companies are precisely because they pursue short-term sales and overdraw sales. Here, we must be clear that we pursue sustained sales growth. In 2008, together with Teacher Jin Huanmin, we compiled articles on sustained sales growth into the "Growth Trilogy" (including "Sales as King," "Sustained Growth," and "Let Growth Change Destiny"), which some company management teams had in hand. Now it seems this topic should be explored anew. Sustained sales growth is still fine from an epistemological perspective, but the methods and methodology should keep pace with the times. In 2003, after deep distribution became popular, the "eight-step method" of deep distribution appeared. At first, the eight-step method was very effective. To be precise, the value of the eight-step method was, first, customer relations, and second, display. At that time, doing these two things well immediately brought sales. The premise was that competitors generally did poorly. In 2005, I proposed the concept of "sustained sales growth" because I found that just doing a good display surface was no longer enough; we had to do the basics of marketing well (a common phrase of Teacher Jin Huanmin). So we proposed five ideas: First, "find room for sales growth," find water where there is a water source. This is the "six sources of sales growth." Second, "do work to improve the basics," including new channel development, new product distribution, terminal activation, and terminal promotion. Later, Master Kong's Lao Tan Sauerkraut Noodles grew rapidly because they established a "promotion-oriented marketing system." Third, find the "core sales days." There are only so many core sales days in a year. Seize the "core sales days" and you seize the main sales of the year. Fourth, set the standard for incremental work, that is, "three or more stable reorders" to consider the phased work effective. Fifth, use "net sales" as the sales assessment target, excluding fake sales and gross sales formed by "channel stuffing." Compared to the routine "visit eight-step method," this is the core work of deep distribution, and it is a work system that can bring sustained sales growth. Unfortunately, even among companies still practicing deep distribution, how many have achieved this?
05 According to the relationship between sales work and sales volume, we can roughly divide sales work into three categories: incremental work, maintenance work, and remedial work. There is also a category of work that is disruptive. This classification method is clearly influenced by management expert Herzberg, who proposed the "two-factor theory." He divided work into motivating factors and hygiene factors. Motivating factors are factors that make employees satisfied with work, while hygiene factors are factors that make employees dissatisfied. Similarly, incremental work is work that brings sustained sales growth, and maintenance work is work that prevents sales from declining. The "eight-step method" of deep distribution was incremental work in the early days, but later evolved into maintenance work. Distribution, shelf management, customer relations, etc., were incremental in the early days; now not doing them is not an option, but doing them still yields no volume. This is maintenance work. If a salesperson only does maintenance work, then even if they work hard, they only have toil, not merit. Remedial work is when the market has problems and measures must be taken to remedy them. If remedied well, sales decline less; otherwise, there is a big slide. Assessing salespeople's work should first be qualitative, then quantitative. Qualitative means determining what type of work it is: does it contribute to increment, or is it maintenance or remedial work? Quantitative means the proportion of incremental work. The higher the proportion of increment, the more the work can generate increment. If most time is spent on incremental work, increment can be expected. Finally, let's talk about disruptive work. Channel stuffing is purely disruptive work. If it had some positive effect in the early days, now it is all harm and no benefit. Channel stuffing is originally self-deception, and it requires a series of remedial work to clean up.
06 Sustained incremental work is very different from one-time incremental work. Promotions and channel stuffing seem to bring one-time increment, but they are hard to sustain. Sustained incremental work has three major characteristics. First, the time lag effect. Time lag means it doesn't take effect immediately, but after a period. How to endure the "time lag" to see sales requires determination. I generally don't favor those who achieve increment immediately upon taking office, because without time lag, it usually means they cannot "sustain increment." Second, the accumulation effect. This is the biggest feature of sustained increment: work can be superimposed; the more you do, the more accumulation, the better the effect. Third, "one beauty covers a hundred ugliness," meaning increment cures all ills. Problems breed more problems, or rather, without sales, problems emerge. Once there is sustained increment, the phenomenon of "no wet firewood in a big fire, no sinking sand in big water" appears, and a large number of problems are "eliminated" by sustained increment. Once on the fast track of sustained increment, it is unstoppable. To bring out the latter two characteristics, it depends on enduring the first stage, the time lag effect. This is the difficulty of sustained incremental work. From my experience serving companies, most people cannot foresee the results of time lag; once there is no sales, they immediately conclude it's ineffective. So, usually two things are done simultaneously: one is work for rapid increment, and the other is work for sustained increment. Use rapid incremental work to cover sustained incremental work. Use rapid increment to win buffer time for sustained incremental work.
07 Back to the core topic of the article: What work contributes to sustained sales growth? How to discover work that contributes to sales growth? Is finding methods that contribute to sales growth the responsibility of frontline salespeople or of senior management? The above questions should be elaborated from several levels. The first question: What work contributes to sales growth? My experience is: First, the work that contributes to sustained sales growth is constantly changing; there is no one-size-fits-all answer. Methods differ in different periods, but there are relatively mainstream methods in the same period. Second, such methods must follow the "innovation dividend" principle: those who do it first are effective, imitators are many, and the utility diminishes. The second question: How to discover mainstream sustained incremental methods. My experience is: Step one, discover best practices. They can be found within the company or by studying excellent companies. I have recently been visiting excellent companies more often, precisely to discover new best marketing practices. Step two, summarize the methodology behind best practices. Is the best practice a case, an isolated case, or does it have universal promotion value? What is the logic behind it? Step three, derive more methods based on the methodology. The third question: Who is responsible for discovering this system? Of course, management. If individual employees have not mastered incremental work methods, the responsibility may lie with the employees; if the majority have not mastered them, the responsibility must lie with senior management. Employees may invent good methods. But discovering good methods and elevating them to the company level for promotion must be good leaders. The "Sixteen-Character Formula for Guerrilla Warfare" was practiced by guerrilla soldiers, initially summarized by Commander Zhu, and raised to a strategic level by Mao Zedong.
08 Let's sort out the methods of sustained sales growth. Since deep distribution, it has gone through the following stages. The first stage: [Customer relations + display] could bring sustained sales growth. This is the basis of the "eight-step method" of deep distribution. Soon, this method failed. This stage roughly lasted until 2004. The second stage: [Customer relations + improving the basics] could bring sustained sales growth. This stage roughly lasted until 2008. The third stage: [Promotion-oriented deep distribution] could bring sustained sales growth. After about 2008, the method of customer relations + could no longer bring sustained sales growth. Some companies adopted the method of "extending from B-end to C-end," for example, Uni-President established a "promotion-oriented marketing system." Very few did this well; Uni-President and Arawana are among the few companies that did relatively well. After 2013, because industry sales peaked, most companies saw sales decline. The increment problem gave way to the volume maintenance problem, and [customer relations + channel stuffing] became the mainstream work. One boss said that customer relations bring channel stuffing, and channel stuffing hurts customer relations. I commented: If customer relations are done for channel stuffing, then it's better not to do them at all.
09 Frankly, in recent years, maintaining volume has been difficult, and few people think about "sustained sales growth." The internet eroding offline sales has disrupted the offline rhythm and even brought about the "return of second-tier distributors," causing channel work to regress. It was not until the past two years that some companies found models for sustained sales growth in the internet environment, and these models are all related to the internet. Since 2014, I have started learning from companies that have done sustained growth well, proposed the concept of new marketing, and recently summarized the model of sustained sales growth under the new internet marketing environment, initially summarizing the "internet marketing system driven by experience," which roughly includes five links: experience, communication, cognition, transaction, and relationship. The core points of this model are [experience-communication-cognition] and [experience-cognition-communication], using experience and participation to bring strong cognition and strong communication, using strong cognition to bring rapid transaction conversion, and strengthening the above process through interaction in the "three-dimensional space." The two cases above actually fit this logic. In the future, I will share more practices to enrich the methods and methodology of sustained sales growth.
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