Editor's Note: The continuous decline in offline foot traffic is an indisputable fact. However, this does not mean that offline channels are no longer important, or that attention and investment can be reduced. Compared to embracing the endless stream of new retail formats, holding the line on offline channels is more critical in the current volatile market environment. How to hold the line? Only through meticulous cultivation and professional management to increase volume and efficiency.

To this end, New Distribution, in collaboration with Mr. Cao Yang, former General Manager of Key Account Management Group Channels at Coca-Cola China, has launched the "Key Account (KA) Management Practice" series, hoping to provide frontline channel managers with a complete methodology for managing offline key accounts in a "chaotic market." This series consists of about 20 issues in total; this is the tenth issue, as follows.

This article introduces the rolling three-month promotion plan:

Promotion planning is the most familiar content for KA teams, yet also the most unfamiliar.

Why is it the most familiar work?

Because it is something account managers do every month. Many people believe that promotions are the only effective means to achieve their monthly targets, so promotion planning naturally becomes one of the most familiar tasks.

Why is it the most unfamiliar work?

Because many account managers only know that promotions mean low prices, but they do not know that there are many professional methods for promotions.

Do you understand the relationship between annual plans and monthly plans?

Why should the monthly promotion plan roll for three months?

Promotions are not only the responsibility of account managers, but also of the KA department, and even more so, they reflect the collaboration of multiple departments within the company, including sales, marketing, channel, finance, and supply chain.

This article will take you deep into three aspects of promotion planning:

  1. What deep-seated problems do low-price promotions reflect in enterprises?
  2. Five characteristics of a good promotion plan
  3. Six steps for account managers to quickly develop a promotion plan

01

What Deep-Seated Problems Do Low-Price Promotions Reflect?

Will you encounter the following problems?

1. My customer promotions and display investments are large, but the input-output ratio is not proportional. What should I do?

2. Customer performance is negative because last year Product A had a strong promotion, but this year the company doesn't allow it, so the task can't be completed. How should I do promotions?

3. To achieve this month's sales target, it's impossible without promotions, and even with promotions, if they aren't strong enough, the task won't be completed.

Every month of every year, we face these two dilemmas:

On one hand, our account managers believe that without low prices and strong promotions, they cannot achieve performance; on the other hand, the company does not support low-price promotions due to development and strategy reasons. Last year, low-price promotions were done, but this year they are not allowed. How can the task be completed?

Image source: Panoramic Vision

The above problems are just the surface; there is a deeper issue: the "game" between the sales team and the company.

The boss says: Whoever dares to disobey orders, let them leave!

On the surface, the game does not exist!

Deep down, in a sense, it does!

First, many companies effectively control the floor price, that is, through finance and management approval to uphold the company's floor price.

It is precisely to hold the floor price that, in a sense, the sales team and management form a "standoff." This state is not true disobedience or confrontation, but rather the sales team continuously transmitting the pressure of low prices to the decision-makers in order to complete tasks.

Every month, this invisible game plays out. Due to sales volume pressure and the time pressure of closing the books, it all focuses on: whether to give price? If the company's system is strong, this situation weakens; if the system is weak, the game becomes obvious.

Analyzing the key to the problem from a deep level, there are two aspects: one is the company level, and the other is the account manager's personal level.

1. Company and Team Management Level

  1. Control logic for expenses and prices Controlled by finance and sales directors, with a floor price that cannot be undercut.

Advantages: The company can effectively hold the minimum price and uphold the bottom line.

Disadvantages: Holding the line is hard work. The sales team continuously transmits sales pressure, customer pressure, and competitive pressure to management, and management also faces time pressure. These pressures combine.

Finally, in the process of the team applying for prices again and again, prices gradually decline, approaching the floor price infinitely.

Why not let the team hold the line together? Is there a way to make the team jointly hold the line?

This requires solving two problems: the team's initiative and professional KA operational capability.

Next, we talk about personal capability.

2. Account Manager Personal Capability Level

Is the following scenario familiar? Look at the logic of how the team makes promotion plans. Generally, account managers do it like this:

a) First look at last year's sales, then look at this year's company-promoted packaging, and to achieve the target, make up the quantity. b) First look at last year's sales volume and price, then based on this month's promotion intensity, determine 2-3 times the order quantity; or look at competitor prices, then determine 2-3 times the order quantity based on the strong promotion price. c) Based on the season, look at suitable packaging and brands, low-price promotions, and determine several times the order quantity.

In short, the account manager's approach is to achieve the monthly target by any means, "pushing inventory to the max," without considering the consequences.

The sales team has a high attrition rate, and some choose to protect themselves. We hear a voice:

"I can't even save my own life, I can't care about that much."

3. The Hazards of This Promotion and Inventory-Pushing Approach:

  1. The proportion of categories, brands, and packaging becomes increasingly distorted. For example, a customer's annual A product share is 50%, B product 30%. This year, because of A product promotions, the sales share becomes 80%, while B product becomes 20%. This is a very abnormal proportion, not the result of natural consumer consumption, but of human manipulation.
  2. Small categories and flavors with low share cause massive overstock due to inventory pushing. For example, D product sales share is only 3%, with normal annual sales of about 2,000 cases. Last year, 3,000 cases were pushed, and this year they must be sold at low prices, resulting in an additional expense and reduced profit for the company.

When a customer's sales are achieved this way, the account manager enters a logical dead loop, placing all hopes for growth on low prices. So analyzing the reason is simple: poor sales because last year's promotion was not allowed this year. This vicious circle can never be broken, and eventually, it will explode due to some "incident"...

The company is correct and necessary in adhering to business strategy and price floor, but enterprises often overlook that if the sales team can make professional promotion plans through professional analysis and thinking, the team will change from passive to active, moving the evaluation of promotion input-output to the sales front. The team will inevitably alleviate the monthly pressure on management. In this sense, the rolling three-month market plan is very important for enterprises.

The boss will say: I have repeatedly asked them, but they can't do it! This shows that professional capability is needed as support!

So, let's look at the characteristics of a good promotion and the steps to do it, which can reflect the concept of moving management forward.

02

Five Characteristics of a Good Promotion Plan

1. What is the underlying logic of a promotion plan?

If you don't understand the underlying logic, many people will think that low-price promotion is the simplest and most effective way in promotions. But if you understand the essence of promotion, you will find that low-price promotion is fundamentally different from professional promotion.

At the point of sale, combine consumer behavior characteristics, adopt appropriate methods to attract consumers to buy, buy multiple times, buy more, and increase consumer preference for the brand and product. Coordinate with the quantity and position of displays to accelerate product turnover, achieving KPIs such as sales, share, profit, and execution.

To achieve such goals, promotion alone is not enough, and low prices alone are not enough!

The monthly promotion plan is a plan to promote sales growth based on annual goals and annual plans, combined with the company's strategic requirements and customer needs.

Image source: Panoramic Vision

2. What is a rolling three-month market plan?

To achieve the annual goals we set with customers, we make monthly plans. The monthly plan is continuously rolling. For example, in July, confirm the October promotion slot with the customer, report a rough plan for September to the customer (but it can be modified), and confirm the specific plan for August with the customer. When August arrives, lock in the November promotion slot, and so on.

Note that rolling three months is more in line with offline customers' promotion habits.

3. Five main characteristics of a good promotion

These five characteristics are the key points of promotion and the criteria for judging good or bad. For easy understanding, they are: timeliness, logic, balance, operability, and profitability.

1 Timeliness Timeliness is very important in a promotion plan: when to submit, when to start, when to end.

Here, we emphasize how many days before the promotion starts the enterprise and customer can confirm the promotion plan. There are four main situations:

• Poor performance: 7-14 days before, both parties confirm the plan; this is also common. • Average level: 30 days before. • Good performance: 40-45 days before. • Excellent performance: 60 days before.

Note: The lead time is more suitable for offline store promotions; online promotions are more random.

Don't underestimate the number of days for submission. From the enterprise perspective, it is the result of multi-department collaboration. If you don't report a price promotion but a consumer promotion, you need time for gifts, materials, POP promotional items, etc. If you choose a brand and packaging consistent with the company's strategy, the marketing department needs to prepare in advance. If it's a new product, the marketing department needs to plan ahead.

This requires the cooperation of the marketing department, as well as support from production, logistics, and distribution. We often see the sales department do a promotion with good results, but then there is a stockout. This is because the supply chain department was not given advance preparation time.

Also, the accuracy of sales forecasts: if promotions with customers are confirmed 40-60 days in advance, the accuracy of sales forecasts will also improve.

In this sense, the earlier the promotion plan is confirmed with the customer, the more calmly each department can arrange its work. The result is that the promotion can be a complete success.

Ideals are full, but reality is harsh!

Now you realize the importance and challenge of the rolling three-month market plan, so rolling three months is not something anyone can just play with.

2 Logic Logic is very important in a promotion plan. Strong logic forms an effective promotion plan. Roughly, it includes the following:

Find opportunities from data analysis, turn opportunities into actions. Opportunities include many things that you need to identify: category, brand, packaging, store, and execution all have opportunities.

• How to improve from packaging: Based on last month's and year-to-date packaging mix, what to strengthen, what to supplement, what to improve? • How to improve from stores: Which stores are key stores, which stores need improvement? • From turnover, consider display position and quantity to increase turnover frequency.

Simply put, logic is a systematic, comprehensive, and focused way of thinking to achieve revenue, profit, share, execution, and other indicators.

3 Balance Balance is relative to extremism. For example:

  1. Some account managers only consider meeting customer needs when making promotions, ignoring the company's strategy and requirements. Or they only consider company requirements, ignoring customer interests. 2) To achieve goals by any means, causing impact on other channels, cross-regional sales, etc.

• Balance the interests of the company and the customer, so that both are satisfied. This is the value an account manager should have. Favoring either side has flaws. If you stand completely on the company's side, the customer gains nothing, and you won't get customer cooperation, nor will the company truly benefit. • Balance the relationship between channels and regions. When doing your own promotion, consider the survival of other teams and channels. This is simple and direct. • Balance the contradiction between single purchase volume and inventory pressure. How much inventory of a single SKU is reasonable to push? Too little and you can't complete the task; too much and it causes old inventory problems, and eventually, the company pays.

In short, balance mainly balances the interests of the enterprise and the customer, and within the enterprise, balances the interests of regions and channels. Both balances maximize the company's interests.

4 Operability Operability is easy to understand. It refers to the smoothness of promotion execution. The more thoughtful and detailed the considerations, the higher the execution rate. For example:

Promotion plan targets should not be too high, otherwise they won't be achieved, nor too low, otherwise you won't meet monthly targets; Promotion methods should be easy to operate, consumers should find it easier and more convenient, with a good experience; Supporting departments should find it easier to execute, such as giving the marketing department time to prepare materials, and giving production and transportation enough time to get products to the point of sale without stockouts.

5 Profitability The characteristic of profitability is that the team knows it's important, but doesn't know how to do it, or doesn't want to do it...

Many companies leave this task to management approvers, which serves as a checkpoint, ensuring not to exceed the bottom line.

Wouldn't it be better if the applicant had already evaluated the return on investment when making the plan?

The benefit of doing this is that when making the promotion plan, you consider the return on investment, which moves the management benefit position to the frontline team, to the account manager, and fully leverages the account manager's initiative, which can have unexpected effects.

It's not easy to achieve this, but first, you need to solve the problem of whether to do it, and then look at how to do it!

03 Six Steps to Quickly Develop a Promotion Plan The process of developing a promotion plan reflects a certain comprehensiveness and complexity.

Why does a promotion plan feel comprehensive and complex?

This is compared to a simple and crude low-price promotion.

If you are exposed to professional operations from the start, you won't find it complex. Unfortunately, most account managers, when they start in business, are taught only low-price promotions. If you are used to low-price promotions, returning to normal steps will definitely feel complex.

In efficient promotions, you need to achieve balance, logic, and profitability, so you can't use a simple and crude low-price promotion. This is the manifestation of comprehensiveness and complexity.

Due to the complexity of promotion plans, it's hard to have a very fixed operational process. To help account managers get started quickly, I've broken promotions down into six steps, suitable for small and medium-sized promotions. Grasping these six points can further appreciate the professionalism of promotions.

** 1. Judge win or lose, look at sales progress** ** 2. Analyze data, dig for opportunities** ** 3. Select key SKUs and key stores** ** 4. Configure display quantities, increase visible inventory turnover** ** 5. Determine promotion methods** ** 6. Evaluate promotion benefits, look at ROI**

Note: Developing a promotion plan is a long-term cultivated ability. Relying on these six steps is only a good start; you need practical training and coaching!

1 Judge Win or Lose Judging win or lose is a very important task, but it's relatively simple and often overlooked by account managers. They focus more on their sales volume, growth rate, and target achievement rate because these are directly related to their bonuses.

In a previous article, I mentioned that your sales growth rate at a customer is 86%. Is this growth good?

Looking at the numbers alone, it's good. 86% is a high growth rate.

Remember, growth is relative. A single 86% doesn't fully explain the situation!

Because if your product grows 86% but the competitor grows 120%, you are losing!

You can't just look at your own growth rate.

Many people always compare their growth rate with others in the team and always hint to their boss that their performance is good, for example, 32% growth is higher than the team's 21%. But in reality, their customer's growth is 36%, and they are behind the customer's growth rate.

This kind of growth is not winning, but losing! You need to constantly emphasize the concept of win or lose to your team.

When account managers realize that 32% growth is a loss, they will dig for sales opportunities!

So, win or lose is very important for digging opportunities and maintaining growth!

2 Analyze Data, Dig for Opportunities Through POS data, execution data, and supply chain data, you can analyze the following:

  1. Review completed sales and assess the achievement of annual goals. 2) Analyze where the packaging mix is declining, and analyze SKUs with shrinking share and negative sales growth. 3) Analyze the reasons for low store sales. 4) Analyze execution and supply chain issues.

3 Select Key SKUs and Key Stores • For SKUs, analyze which ones need to be maintained, which need share improvement, which need to be phased out, and which need to be started. Based on this, select which SKUs will be promoted this time. • For stores, analyze based on per-store sales to decide which stores will be the focus of this promotion, and select the stores that need improvement.

4 Configure Display Quantities, Increase Visible Inventory Turnover Based on the SKU and store display plan, determine whether to increase displays. The added displays should be placed in key stores.

For example, a store has a three-pallet floor display:

• Shelf product display value is 5,000 yuan, with weekly turnover of 0.5 times, generating 10,000 yuan in sales per month; • Floor display of 3 pallets has a display value of 6,000 yuan, with weekly turnover of 0.9 times, generating 21,600 yuan in sales per month.

If the customer's sales target is to grow 17%, how can sales be increased from the perspective of display turnover?

• The combined monthly sales of the two displays is 31,600 yuan; • The 17% increase of 31,600 yuan is 5,372 yuan; • Adding display points can increase sales. Suppose the sales of one pallet of floor display is 7,200 yuan; • You can increase the floor display from 3 pallets to 4 pallets, adding one pallet can bring an additional 7,200 yuan.

5 Determine Promotion Methods Promotion methods mainly include consumer promotions and price-related promotions. The former spends on brand promotion, gifts, premiums, and combines games and entertainment elements. The purpose is to increase consumer preference. Generally, it should be combined with the company's brand promotion activities, with larger costs and scale, but the advantage is that it doesn't appear as low prices, maintaining the normal price system.

Price-related promotions include second half price, direct discounts, XX yuan for several items, etc.

Image source: Panoramic Vision

6 Evaluate Promotion Benefits, Look at ROI After making the plan, you need to look at your ROI. Each company calculates ROI differently, but roughly it's total revenue minus product discounts, minus expenses, to see if it meets company requirements. If it's below company requirements, you need to adjust, either by increasing revenue or reducing investment, until the ROI meets requirements.

Final Thoughts: A professional rolling three-month market plan has two major effects:

  1. It allows multiple departments to prepare fully for promotions in advance. 2. It allows account managers to fully leverage their initiative, which is better than completely obeying a one-size-fits-all standard. 3. It moves the work of management benefits to the sales team, meaning the sales team already considers ROI when making plans.

Of course, achieving this is not easy, but it is an effective way to solve problems. It's worth trying.

To develop the ability to truly make promotion plans, pay attention to the following:

  1. Practice through the six steps repeatedly, gradually understanding, which requires long-term accumulation. 2. In the actual process of making promotion plans, communicate with colleagues and peers, get coaching and guidance, so you can progress faster. 3. You can join the KA management exchange group, discuss in the group, and get answers from teachers to improve.

PS: If you are interested in KA management topics, please long-press to add the enterprise WeChat account, and be sure to note "KA" to apply to enter the New Distribution "KA Exchange Group." __