"My market isn't completely 'bad'; it just has good and bad areas. I divide the market into several zones, and sales in good zones are several times or even dozens of times higher than in bad zones. The bad areas are already in a vicious cycle: competitors are strong, exclusion is severe, and we can't recruit people. When we finally do, they quit within the first three days. Experienced staff are unwilling to transfer there. However, the overall market sales atmosphere is good. If someone can stabilize, things will improve. What should I do?"
As long as the tactics are correct and resources are allocated reasonably, it's relatively easy to take a stronghold from competitors. This stronghold is what the distributor above calls their "bad area." How should these areas be handled?
The key is people!
As the distributor said: "If someone can stabilize, things will improve." Such a person can be called a "warrior." Today, I'll share how a distributor I previously served, Mr. Wang, used high pay to motivate 'warriors' to attack 'bad areas' and achieve high sales growth.
Mr. Wang's view: Only high pay can attract "warriors." Placing "warriors" in large and difficult areas allows those areas to contribute higher performance. Such areas are often the birthplace of performance and profit growth, and the training ground for forging excellent soldiers.
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Step 1: Criteria for "Bad Areas"
1. Lagging areas: Compared with competitors, market share lags significantly, the area's foundation is weak, staff stability is poor, and sales growth is far below the market average.
2. Non-lagging areas: Although not at the bottom, growth is unsatisfactory, and there is huge room for growth. "Warriors" can achieve high growth in these areas and challenge higher goals.
Summary: Good and bad are relative. Notably, distributors can define areas with high growth potential in both sales and profit as relatively "bad areas." These areas need high pay to attract "warriors" to take on the challenge.
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Step 2: Encourage "Warriors" to Actively Participate
1. Clarify challenge goals: Including but not limited to sales targets, profit targets, outlet quantity and quality targets, display count targets, and distribution rate targets for key SKUs.
2. Registration conditions:
a. No restrictions on seniority, years of service, or position; as long as one dares to challenge, strives to surpass, and never gives up;
b. Have good values aligned with the distributor's philosophy, solid market operation experience, and professional job skills;
c. Possess a hardworking spirit, good stress tolerance, mature people management experience, and excellent management skills;
d. Priority is given to existing staff in the target area to register for their own area, but no restrictions are imposed;
3. On-site selection:
a. Evaluation dimensions: past performance accounts for 50%, main leader's opinion 20%, and on-site presentation of market improvement methods and next action breakdown 30%.
b. Create atmosphere: Ensure selection is fair, just, and transparent. Historical data is public, challenge goals and sales are announced on-site, and excellent sales staff are encouraged to challenge themselves and high pay.
c. Area auction: After all personnel understand the market conditions of the target area, conduct an area auction, similar to an auction house. Set incremental goals. Whoever proposes the highest challenge goal gets the area—the capable take it. Of course, the matching compensation system should be communicated in advance.
Summary: To perfectly conclude Step 2, a group discussion meeting must be held in advance. The clerk provides all historical data support, shares the incremental opportunities in "bad areas" and the company's policy support. Allow "warriors" time to visit and inspect the target market area so they know what they're getting into. At the same time, mobilization and Q&A are also crucial.
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Step 3: High-Pay Strategy
Compensation design is key to cracking "bad areas." Post-90s employees care more about work outcomes and gaining a sense of achievement from work. Creating a better work and life atmosphere continuously stimulates employee enthusiasm.
Companies need employees to move from apathy and frustration to high efficiency. Employees need material incentives, and more importantly, they need material incentives that prove their worth and match their abilities. So high pay is especially important. Here's what Mr. Wang did:
a. Basic compensation system: For sales staff taking over "bad areas," for the first three months, pay is guaranteed at the average level of the same period last year, fully trusting employees, not troubled by sales, solving legacy issues, and building market foundations.
However, they must meet dual standards: new outlet quantity (new development count target) and quality (in-store display target). After three months, normal assessment applies, and basic attendance salary can be raised by 1-2 levels.
b. Area difficulty coefficient:
First, incremental percentage coefficient. For example: Last year's sales in the area were 1 million; this year's challenge target is 1.2 million. After completing the challenge, achievement is 120%, so the difficulty coefficient is 1.2, and the bonus is multiplied by 1.2.
Second, incremental absolute value coefficient. The larger the area's sales base, the harder it is to achieve incremental percentage. Calculate the average annual sales of market areas, then divide the challenge sales by the average to get the incremental absolute value coefficient.
For example: The average sales of the 9 areas in Mr. Wang's market last year was 1 million. Zhang San challenges a "bad area" with a target of 800,000, so the coefficient is 800,000/1,000,000 = 0.8, and the bonus is multiplied by 0.8.
Overall example: Li Si takes over a "bad area" with last year's sales of 1 million; this year's challenge target is 1.3 million. The distributor's market area average is 1.2 million. Li Si's reward is: bonus * incremental percentage coefficient (1.3 million/1 million) * incremental absolute value coefficient (1.3 million/1.2 million).
c. Bonus setting standards: Two dimensions for reference based on product and market conditions;
First, incremental absolute value dimension For example: First 100,000 annual increment, reward 1,000 yuan; second 100,000, reward 2,000 yuan; third 100,000, reward 4,000 yuan; and so on.
Second, incremental percentage dimension **For example: 10% increment, reward 10,000 yuan; 20% increment, reward 20,000 yuan; 30% increment, reward 40,000 yuan; and so on.
You can choose either bonus dimension, or implement both simultaneously based on product profit.
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Step 4: Process Supervision for Challenging "Bad Areas"
1. Monthly and quarterly reports: At report meetings, present results, focusing on market improvement outcomes, to facilitate management guidance and correction. After six months, assess whether the employee is capable of continuing the challenge.
2. Semi-annual performance evaluation: If a "warrior" fails to complete overall indicators after 6 months of challenging the area, or cannot keep up with the sales rhythm, starting from the 7th month, cancel the upgraded attendance salary and revert to the original salary system.
If they make a comeback later and succeed in the annual challenge, the canceled salary upgrade will be paid retroactively in one lump sum.
3. Annual performance evaluation: If the annual challenge succeeds, all rewards are paid at once according to the contract (rules must be set to prevent speculation and ensure healthy market operation and reasonable terminal inventory).
If the annual challenge fails, recalculate the "warrior's" monthly achieved salary under the non-challenge salary system, compare with actual income, and settle the difference (refund or pay extra). It's worth emphasizing that even failure deserves encouragement; summarize lessons and encourage another attempt next year.
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Step 5: Annual Summary for All "Warriors"
After the one-year challenge in "bad areas" ends, hold a commendation meeting promptly, publicize results, and distribute rewards. Successful "warriors" share insights and replicate their methods.
Failed "warriors" summarize gains and losses, accumulate experience, and keep trying. The end of the challenge year is also the start of a new challenge; a new round of "bad area" challenges can be re-auctioned.
Final Thoughts:
Mr. Wang, in a small county town of 300,000 people, achieved annual business of over 20 million yuan. He is a distributor with great ideas that I served, especially unique in staff motivation, maximizing human efficiency. Looking back, using "warriors" to challenge high pay to crack "bad areas" solved five problems:
- Solved the incremental problem in "bad areas";
- Solved the distribution problem where greater contribution leads to higher pay;
- Solved the team's insufficient ability to handle "bad areas";
- Solved the problem of high-ability employees' poor stability and low sense of belonging;
- Solved the problem of team benchmarking driving overall business capability improvement. This is worth learning from for distributors in the FMCG circle.