Lu Xun said that time is like water in a sponge; if you are willing to squeeze, there is always some. Similarly, sales are like water in a sponge; if you are willing to squeeze, there is always some. For example, Jinmailang's recent performance has been outstanding because they squeezed sales out of traditional channels. Sales are squeezed out, in contrast to 'sales are pressed out'—relying on channel stuffing no longer yields sales, but squeezing channels can still produce sales. The exemplar of squeeze-style growth is none other than Jinmailang. Their deep distribution started in 2003, and by 2014, although there was still no substitute, the traditional approach had become ineffective. Now, Jinmailang is giving deep distribution a new highlight. Jinmailang's 'Four-in-One' sales logic is essentially still deep distribution, but its operational methods are completely different from traditional deep distribution. I call it new-style deep distribution. -01- The marketing environment for traditional deep distribution is: channels have natural increments. From 2012 to 2013, the growth rates for total retail sales of consumer goods in offline channels were 12% and 23%, respectively. In 2014, it plummeted to 6%, and although it rebounded to 12% in 2015, it continued to decline to 8%, 5%, and -1% in 2016, 2017, and 2018. It can be understood that traditional deep distribution is about dividing up channel increments, but some companies get a larger share, some get a smaller share, and there is always an increment. As long as you don't perform particularly poorly, sales will grow. Deep distribution is inherently squeeze-style selling. Deep distribution has three major tasks: terminal customer relations, terminal positioning (distribution, shelf management, display, vividness, warehouse occupancy), and terminal promotion. Terminal customer relations means occupying more of the store owner's attention and dividing more of the store owner's resources; terminal positioning means occupying more, better, and more vivid positions on limited shelf space to attract customer attention. Terminal promotion is not done by most companies; Uni-President and Arawana do it better. In an environment where channels have natural increments, as long as you squeeze a little, sales come. So traditional deep distribution is squeeze-style selling that seizes increments. -02- Jinmailang began implementing the 'Four-in-One' model in 2011. In 2014, channel sales plummeted, which was timely. When channel increments are gone, squeeze-style selling means grabbing existing stock. Grabbing existing stock means your growth is someone else's decline. In 2014, when most companies were increasing channel stuffing due to declining sales, Jinmailang was implementing an upgraded deep distribution system. When channel increments decline, or even absolute sales decline, a stronger squeeze is needed to squeeze sales out of existing stock. Jinmailang's approach represents one direction of channel operations (2B). Although the proportion of channel sales is declining, the absolute volume of channels (existing stock) is still large. If you cannot revitalize channel stock, no matter how fast online growth is, it cannot save channel losses. What exactly is the power of Jinmailang's 'Four-in-One' model in squeezing channels? 'Four-in-One' includes personnel, vehicles, contracted areas, and terminal devices, reflecting two major mechanisms and two major methods. The two major mechanisms are: first, a profit distribution mechanism that activates salespeople; second, a management closed loop that both activates employees and improves efficiency without losing control. -03- To activate terminals, you must first activate salespeople Activating terminals is correct, but if the people who activate terminals are not activated, then terminals cannot be activated. From emphasizing activating terminals to prioritizing activating 'small workers' (dealer salespeople), this is an important evolution in deep distribution. When everyone is activating terminals, the threshold for activating terminals becomes higher and higher. One day at noon, I visited a terminal, and the owner said that 28 salespeople had already visited that day. I asked the owner: 'When a salesperson visits, what is your first thought?' The owner replied: 'Send them away.' The current channel environment determines that we must rely on activated salespeople to build stronger channel squeeze. Activating individual employees and activating all employees follow different logics. Individual employees can be activated through praise, positions, compensation, and other methods, but the best way to activate a group of employees is to 'make employees have an owner's mindset.' Owners naturally do not need incentives; owners are self-motivated. The subject of incentives is usually the owner (or managers with an owner's mindset), and the object is usually employees. The owner's mindset determines natural initiative and passivity. -04- How to make employees have an owner's mindset? The best way is to make employees 'second bosses' or 'small bosses.' The difference between a boss and an employee is that employees' income is wages and bonuses, while bosses' income is profit. The benefit mechanism of wages and bonuses is 'more work, more pay,' while the profit distribution mechanism is 'only when you do well can you get more,' 'only when you make money can you get more,' and even 'work for nothing.' Benefit distribution and profit distribution are different distribution mechanisms. How to achieve profit distribution for employees? Jinmailang's approach is '50-50 profit sharing.' Jinmailang's approach is: all wages are settled daily. Every step you complete and the money it converts to is settled instantly into 'Jin coins' (Jinmailang's 'currency'). You can see Jin coins when you place an order, when you do displays, and even more when you develop new stores. It's like in a game, where every task has a coin reward, keeping small bosses in a constant state of excitement. Activating employees with instant incentives is very effective. This approach may become the mainstream in the future, and it is also the implementation of the 'platform + unit organization' management system in the Internet era. In recent years, many excellent dealers have practiced this approach, but it is rare to see companies like Jinmailang transform the entire marketing system into a 'platform + unit organization' at the company level, thereby activating employees. Industry expert Nalan Zuitian commented: 'Jinmailang's move has increased small bosses' income by two to three times or more. If you tell them to rest, they think you're joking. The high income of these small bosses has driven Jinmailang to turn its own employees into small bosses. Small bosses' income is increasing, and the dealer's per-box profit seems to decrease, but sales increase, so overall profit is growing.' Similar to Jinmailang is Uni-President's 'Big Package Earn' system. -05- Achieving a management closed loop with terminal devices A stronger squeeze requires stronger management. Merely activating employees is not enough; management empowers employees. In traditional deep distribution, if sales are on the rise, employees are easily activated. If sales are declining, it is basically powerless. Most companies' deep distribution does not achieve a management closed loop. Employees discover problems themselves and solve them themselves. The key point of management is: the problems that employees do not discover are the biggest problems; discovering problems is more important than solving them. The most important weapon of Jinmailang's 'Four-in-One' is the 'terminal device.' The terminal device achieves: first, visualization of management; second, transparency of expense management; third, real-time interaction; fourth, sharing of terminal data in the management process. The value of the terminal device is, first, a management closed loop: good or bad performance is 'visible,' problems can be 'discovered,' and signs can be 'cut off'; second, employee behavior and terminal performance are digitized, and digitization enables prediction and pattern discovery; third, marketing is more precise because of data support. -06- A stronger squeeze 'Profit distribution' activates employees, 'terminal devices' achieve a management closed loop, and vehicles and area contracts form a stronger squeeze. Since 2014, because FMCG companies have generally adopted 'channel stuffing,' terminals have large order quantities at one time, leading to a sharp decline in the frequency of salesperson visits to terminals. Vehicles solve this problem. Without vehicles, there are no outlets; without outlets, there is no sales. While most companies' squeeze has weakened due to excessive 'channel stuffing,' Jinmailang's squeeze is stronger because of the 'Four-in-One.' Uni-President's recent 'Big Package Earn' model is similar to Jinmailang's 'Four-in-One' model. This type of model can be called growth-oriented deep distribution. It usually includes three levels: First, activate employees. Give employees more benefits. Second, deep distribution based on Internet tools, typically SaaS systems, achieving a management closed loop for deep distribution and achieving precise deep distribution. Third, for mass products, pursue higher coverage and freshness. For mass products, coverage is still crucial. Freshness determines popularity and also depends on channel management capability. The shelf freshness of FMCG products is an important indicator of whether marketing is healthy. Source: Teacher Liu's New Marketing (ID: liuchunxiong1964) If a tip is adopted, a reward of 400-2000 yuan will be paid. If you like this article, click [Watching] and share it with friends.