△2018 China (Luohe) Food Marketing Innovation Summit and the 3rd Leisure Food Manufacturers and Distributors Precision Matchmaking Conference Free registration is in full swing; scan the QR code for details. Doing things that contribute to sales growth means grasping key sales indicators, persistently repeating simple tasks, and doing well what everyone knows but neglects to do. Salespeople face many tasks daily within limited time. According to the principle of prioritizing important matters in time management, what should a salesperson do first? What truly matters for sales growth? Entering an airplane cockpit, you'll see hundreds of instruments, but pilots typically focus on only two during flight: the altimeter and the oil pressure gauge. These are key indicators. Similarly, doing things that contribute to sales growth means doing things that help key sales indicators. First, clarify that the sales we refer to are "actual sales," meaning products bought and consumed by consumers in retail stores and supermarkets. "Fake big accounts" typically excel at distribution but never focus on end terminals. Such sales often don't complete actual sales; instead, part of the goods is transferred to the channel as inventory, and another part is used for price-cutting and cross-region selling, which only has negative effects on the enterprise. So, what are the key sales indicators? Manage Sales with Key Indicators Suppose you're given a task: move 1,000 boxes of goods from point A to point B, 50 meters away, as quickly as possible. What methods do you have? Method 1: Increase manpower—find 1,000 people, each carrying one box. Method 2: Increase the amount per trip—use a bulldozer to push 500 boxes at once, completing it in two trips. Method 3: Increase carrying speed—run faster; if it took 1 minute per trip, now do two trips in 1 minute. Method 4: Build a conveyor belt—station 50 people to pass boxes along. From a sales perspective, point A and point B correspond to "manufacturer shipment" and "consumer purchase and consumption," and the four methods above are the four key sales indicators. 1. Increase manpower—corresponding key sales indicator: "Distribution Rate" and "Full Item Sales" Who moves goods to consumers? Not salespeople or distributors, but terminal stores, supermarkets, convenience stores... Terminals are the ones who move goods to point B (consumers). Increasing manpower for moving goods means increasing effective terminal outlets, i.e., improving distribution rate. Moreover, it's not just about how many outlets sell our products, but also how many of our SKUs are sold in these stores. Sales volume equals number of customers multiplied by number of items. 2. Increase amount per trip—corresponding key sales indicator: "Merchandising" How to make a store sell more? Do good merchandising, poster posting, and in-store guidance. No matter the product, it can only be sold if consumers see, perceive, and experience it. 3. Increase carrying speed—corresponding key sales indicator: "Active Customer Count" "Increasing carrying speed" means managing customer inventory, increasing their order frequency, and raising the number of active customers. Active customers are those who order every month. A salesperson might manage 30 distributors, but if only 3 order during the off-season, the active customer count is too low. Increasing active customer count means increasing customer order frequency, provided the company's logistics capacity allows. Example: Customer Zhang orders once a month with 4,000 boxes; Customer Li orders four times a month with 1,000 boxes each time. Both have the same sales volume, but which is more loyal? Of course, Li. Li's capital investment is one-fourth of Zhang's, and turnover speed is four times faster, resulting in much higher capital return. Furthermore, the salesperson has four opportunities per month to recommend new products to Li, but only one (or even none) for Zhang, because distributors have a budget for how much they can stock from each company. After stocking 4,000 boxes, if you ask Zhang to stock new products, he might say, "I've already stocked 4,000 boxes from you, and you want more?" 4. Build a conveyor belt—corresponding key sales indicator: "Price Order" "Building a conveyor belt" corresponds to stabilizing prices, avoiding cross-region selling and price-cutting, ensuring that distribution, wholesale, supermarkets, and small retailers all make a profit. If any link doesn't profit, it's like a broken conveyor belt; products won't reach the terminal, and actual sales won't happen. The "moving goods" problem is a required training course for new Coca-Cola employees, and these indicators are also key metrics for Coca-Cola sales staff. This signifies a management culture: if the process is done well, results will naturally be good. Marketing is a cause-and-effect behavior. If a regional market has high distribution rate, good store displays, stable price order, reasonable customer inventory structure, and high order frequency, how can sales be poor? Blind Spots in Key Indicators The four key indicators are fundamental, simple, and effective, but require daily persistence. Additionally, some methods that directly help sales growth are overlooked by salespeople, such as focusing on full-item sales. Chinese enterprises have a common problem: they develop 20 SKUs, but the sales department sells only one, and that one is often low-priced. Salespeople are the initiators of this phenomenon. Example: A company's instant noodles have 20 SKUs, with Braised Beef Noodles and Super Pork Rib Noodles being the most mature. There's a salesperson who, when asked to increase sales by 500,000 yuan this month, promotes these two mature SKUs with a "buy 100 boxes, get 2 free" offer. Such mature products quickly boost sales with a little promotion. Next month, when the target increases by 1 million yuan, he offers "buy 100 boxes, get 3 free." During this process, sales of these two bestsellers rise, distribution rate improves, but prices drop. Eventually, a day comes when consumers or retailers ask for them, and the wholesale store owner says, "No, no, those noodles aren't good / we don't have them"... Once this phenomenon becomes widespread, the market is close to death. In fact, new product sales aren't as difficult as imagined—just add a new flavor, size, or packaging to an already popular product, and sales will increase significantly. Salespeople who want to do meaningful things for sales must have an "item sales" mindset, be adept at identifying item gaps in their market, and seek true incremental opportunities. Example: If you're a salesperson for an instant noodle company in Taiyuan, Shanxi, you might find that a certain "Delicious Meat Floss Noodles" has a distribution rate of 90% at a retail price of 1 yuan per pack. This phenomenon signals a new sales opportunity—the local market readily accepts noodles at the 1 yuan price point. Since the distribution rate of Delicious Meat Floss Noodles is 90%, the channel profit must be low (almost every region has such regional brands that entered early, are small, rely on brand inertia for high distribution, but often sell only one SKU, have mediocre management and sales capabilities, chaotic pricing, and very low channel profit). Therefore, you should consider promoting 1 yuan instant noodles next. Improve Work Efficiency Around Key Indicators Salespeople are busy all year, but often they're busy without clarity. Let's take the most common example of a salesperson visiting a distributor to illustrate what work is valueless and what contributes to sales. Example: A salesperson visits a distributor, takes a long-distance bus in the morning, returns in the evening, and has lunch with the client. Most of the day is spent on the bus; actual work time is only two to three hours. Upon meeting, they ask three questions: "How are sales?", "When will you pay?", and "This time we have a buy 100 boxes, get 5 free deal; how many do you want?" Then they chat idly or help the distributor with chores like moving goods... Such visits waste time and energy but fail to do the work that truly helps sales: checking the distributor's inventory levels, identifying which items are out of stock, knowing which customers the distributor sells to and at what prices, detecting any vicious price-cutting in the market, and ensuring promotional items aren't withheld. Instead, they focus on building personal relationships, which ultimately leads to the market being controlled by the distributor. What should be done? Focus on the four key sales indicators: First, at least visit terminals to check if promotional items are withheld, posters are displayed, where distribution is too low, and where items are incomplete. Then discuss with the distributor to improve distribution and merchandising. Second, check the distributor's inventory. If you don't know how much stock the distributor has, how can you place orders and make them an active customer? Third, understand the distributor's purchase price and the wholesale price in the market; otherwise, you can't know which channel link has insufficient profit, what promotions to run, or where to combat cross-region selling and price-cutting. In summary, although there are many things to do during a distributor visit, don't forget to check terminals to encourage the distributor to improve distribution and merchandising, check prices to combat cross-region selling and price-cutting, and check inventory to handle slow-moving items and ensure a healthy inventory structure and reasonable orders. If you're busy drinking with distributors to build rapport instead of managing the market, today you might be brothers, but tomorrow you could become enemies over stocking, returns, or payment issues. If you're busy pushing stock onto distributors and then dealing with soon-to-expire products, you'll be overwhelmed by problems you created. If you're busy delivering goods but don't build a file of the distributor's downstream customers, you'll end up being managed by the distributor instead of managing them. If you're busy pleading for company support without knowing your market's competitor prices, best-selling items, or manpower investment, applying for support becomes a game between you and the company... In sales, salespeople don't need to consider overly complex issues; they just need to: (1) Use every means—teaching by example, persuasion, or even coercion—to make distributors do terminal delivery and display well, improve distribution and merchandising, and ensure promotional resources are implemented; (2) Stay informed about price order at all times, and act immediately at the slightest sign of price-cutting; (3) Constantly monitor customer inventory, and promptly digest any accumulation to keep inventory circulating healthily. Doing things that contribute to sustained sales growth isn't mysterious. It's about grasping key sales indicators, persistently repeating simple tasks, and doing well what everyone knows but neglects to do. Delivery vs. Distribution: Maintaining vs. Expanding Sales What's the difference between "delivery" and "distribution"? At an FMCG company's sales meeting, we found that salespeople say "distribution" but actually do "delivery." These are fundamentally different tasks. From a process perspective, the differences are: First, distributing new products or developing new markets is distribution; delivering old products to existing customers is delivery. Second, before the channel fully accepts a new product, it's distribution; after acceptance, it's delivery. From a results perspective, delivery only maintains existing sales, while distribution aims to expand sales. We've analyzed some hardworking salespeople whose sales didn't increase because they were busy but ineffective—they mistakenly treated delivery as distribution, doing only maintenance work, so sales naturally didn't grow. A common mistake in distribution is doing only one round and then stopping. Such new product launches often fail; if the new product hasn't established a foothold, distribution should continue. Source: Distributor Micro Journal