---
title: "When Enterprise Sales Hit a Bottleneck, \"Transformation\" Cannot Just Be Talk—This Marketer Shows How It's Done (Practical Dry Goods Sharing)"
description: "The original \"FMCG Distributor Professional Management Consulting\" has been renamed to New Distribution. From last year to this year, the most discussed issue among enterprises is the problem of products not selling, making it hard for companies to make money, manage people, develop markets, and do business. The most talked-about solution is transformation, which has two aspects: product transformation and enterprise service function transformation."
author: "罗宏文"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-10-07"
categories: "Brand Marketing"
language: "en"
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citation: "罗宏文. “When Enterprise Sales Hit a Bottleneck, \"Transformation\" Cannot Just Be Talk—This Marketer Shows How It's Done (Practical Dry Goods Sharing).” New Distribution, 2016-10-07. https://xinjignxiao.com/en/articles/when-enterprise-sales-hit-a-bottleneck-transformation-cannot-just-be-tal-b6644aa9/"
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# When Enterprise Sales Hit a Bottleneck, "Transformation" Cannot Just Be Talk—This Marketer Shows How It's Done (Practical Dry Goods Sharing)

> The original "FMCG Distributor Professional Management Consulting" has been renamed to New Distribution. From last year to this year, the most discussed issue among enterprises is the problem of products not selling, making it hard for companies to make money, manage people, develop markets, and do business. The most talked-about solution is transformation, which has two aspects: product transformation and enterprise service function transformation.

**The original "FMCG Distributor Professional Management Consulting" has been renamed to New Distribution**
Click "Read Original" to register.
30+ industry experts, 100+ B2B platform founders, 800+ manufacturer and distributor friends, gather in Fuzhou to jointly explore the Internet transformation path of the FMCG industry.
From last year to this year, the most discussed issue among enterprises is the problem of products not selling, making it hard for companies to make money, manage people, develop markets, and do business. These are headaches for everyone.
The most talked-about solution is transformation, which has two aspects: one is product transformation, and the other is enterprise service function transformation. I think for enterprises, the biggest problem they face is still the transformation of comprehensive service functions. Today, I will focus on the issue of service model transformation.
Case: A instant noodle enterprise faces a cliff-like decline in sales, what to do?
In March 2016, I came into contact with an instant noodle enterprise, a standard local private enterprise with a history of over 20 years. At its peak, sales were nearly 600 million yuan, with about 300 employees. But by 2015, due to the overall decline of the instant noodle market, sales plummeted to less than 100 million yuan.
1 Find the Problem
After participating in this project, we spent nearly half a month going down to the market for research. After the research, we found the following situations:
**First, product aging, insufficient price gaps at all levels, and chaotic channel management.**
**Second, the company's lagging response to market issues, distributors' distrust of the company, dissatisfaction with after-sales service, and even starting to switch to competing products.**
**Third, the disconnect in information interaction between manufacturers and distributors, leading to prominent contradictions; the company's movements or policy adjustments are not known to downstream distributors, causing misunderstandings between the two sides.**
**Fourth, products that can sell do not make money, and products that can make money do not sell.**
**Fifth, the instant noodle industry has transparent profits and fierce competition; once costs are calculated, everyone knows them.**
**Sixth, under pressure from the market environment, the company raised prices twice in a row, causing some customers, especially those supplying special channels and supermarket systems, to have great complaints. As everyone knows, price adjustments in special channels cannot be completed within a month; contracts are signed for a year. After the company adjusts prices, it does not execute according to the original contract, leading to a pile of complaints from customers later.**
When company sales decline, production enterprises face this problem—abnormal sales lead to abnormal production, which in turn causes a series of problems including shipping, etc. Contradictions emerge.
2 Service Upgrade
**I. The company's mindset needs to change.**
At this time, what should we do? The company's functions need to be upgraded, that is, the enterprise's service functions. I think the enterprise side, especially the regional manager level and the salesperson level, should do well, with regional managers being particularly crucial. When an enterprise has neither brand nor product strength, there will also be problems in communication, so it needs to be reorganized. This includes financial system accounting and coordination of the entire production and sales process. These all require coordination among various departments, so it must start from the leadership level.
You can first sort out the simple ones, put aside those that cannot be done, and first do what can be changed, starting from the leadership level. Marketing managers and sales managers cannot sit in the office; they must serve sales and serve sales personnel. It is not about managing with forms and tables in the office, but about finding ways to implement these service functions in the market.
**II. Product service needs to be upgraded, i.e., product transformation.**
After reaching a consensus on functional upgrades, the first problem encountered is that products are not selling in the past two years! To this end, we took two actions:
One is to decisively cut the bagged instant noodle series, retaining the company's specialty noodle series.
Two is to innovate and develop new products.
Why only retain the specialty ones?
Currently, Master Kong has basically formed a monopoly in instant noodles, making it difficult to break through. Unified has broken through with Laotan Sauerkraut by innovating on taste and ingredients, and Baixiang Big Bone Noodles has broken through by using big bone broth. Other small enterprises find it very difficult to break through.
Due to the gradual improvement in people's living standards in the past two years, people's requirements for product nutritional value and safety are getting higher and higher. Therefore, the advantages of traditional instant noodles have become disadvantages. Although sales are still considerable, both the company and customers do not make money, and even lose money. After research and discussion, the company decided to cut instant noodles and stop production and sales. They decided to produce local specialty noodle products that are differentiated from Master Kong and Unified, which makes it less likely to attract competitors' attention and avoid price wars.
But how to quickly develop new products? This is also a test for the company's technical research and development. If production is not good, consumers will not recognize it, and there are many products that you feel are good but do not sell in the market.
From the performance of newly developed products currently in trial sales, products for the present and the next few years need to have at least three points:
One is concepts that are generally familiar to the public under new thinking;
Two is to increase intrinsic value and nutrition based on original products;
Three is to integrate external resources to tend towards recycling and added value.
**III. Monthly sales plan service upgrade, i.e., task management transformation**
Conventional task allocation management generally determines the monthly growth rate based on the same period last year's sales and last month's sales, then subdivides it to each region and then to each customer and responsible salesperson. According to this allocation management method, under the current poor overall environment and poor terminal sales, it is easy to cause:
1. Customers selling at low prices to dump goods
2. Old batch inventory appearing
3. High customer pressure and many complaints
4. Warehouses prone to stagnant products.
Each month forms a vicious cycle. Now, because the enterprise is not large, products are not mature, and the network is not complete, there are many opportunities for expansion. Therefore, combined with trial-and-error marketing, we innovatively upgraded the sales task.
First, let distributors and salespeople jointly report the next month's sales plan at the beginning of the month, such as how much of each product to do, and then list it in a table. Let customers and salespeople jointly report, and after reporting, let customers sign for approval. First, send it back to the company via mobile phone or WeChat group, and bring the original back after the meeting. This indicates that the business and customers jointly recognize what can be completed. Then the company conducts statistics to see how much the region differs from the company's planned sales. For example, if we plan to do 1 million, but the market reports that only 800,000 can be completed, how to complete the remaining 200,000? It is necessary to carry out new market development or new network channel development to complete it.
This 800,000 is reported jointly by the business and customers. To be honest, regardless of whether the business works hard or not, the distributor can complete it.
Therefore, the business can basically spend about 30% of their energy on distributors, and the remaining 70% on other work. That is, invest more energy in other markets to ensure the completion of the remaining 200,000 tasks.
In this way, making plans every month, and moving the shipping rhythm forward, by the end of the month, customer inventory will be relatively healthy. Market operations will also be healthy.
**IV. Promotion service form upgrade, i.e., promotion method transformation**
The reason why the company's survival is difficult, besides lacking differentiation in operations, is also due to various subjective and objective factors and cost impacts. The company still stays at the extensive management stage. It should be said that many small enterprises are still in this extensive management stage.
We did find such problems in this company's market, and many production enterprises are also doing this. For example, the order reward policy for customers is to give 10 free items for every 100 items ordered. Most adopt naked price sales, that is, when ordering 100 items, 10 items are given along with the goods. As for how customers use the free items, generally no management is done. This will cause a problem: your market cannot be refined. As a small enterprise, you have limited personnel, and you will not put many people in one market. With few people, you actually need to use the distributor's resources more.
To use distributor resources, you need to upgrade the promotion intensity and promotion methods. So to provide differentiated services, stimulate distributors, and make good use of distributor resources, promotion services need to be upgraded.
How do we improve? Originally it was 100 with 10, now we raise it to 100 with 20, giving 10 more items, increasing the promotion intensity. For distributors, this is of course a happy thing. But I have a condition: I need to make some forms. Whether it is 100 with 20 or 100 with 30, the distributor must use the outlets.
For example, these 20 items are used for rewards for developing new terminal outlets. Each new outlet rewards customers with a few items. Customers must use them at terminal outlets as required. The company checks, and at the next shipment, the company settles the account. It cannot be delayed so that distributors lose hope. The cost increases by double at once, but it is very attractive to customers and can reduce labor costs. How fast is the detailed development of terminal outlets? How many new outlets are added? What profits does it bring? As an expert said: "Enterprises should consciously introduce refined management or lean production. I believe the enterprise's competitiveness will immediately show. However, many business owners still stay in the past thinking mode."
After the enterprise made this series of service upgrades, in just three to four months, we can see the changes in this data.
New customers with ideas and strong willingness were developed, and satisfaction with the company reached 92%. Sales increased by 3% in June, 12% in July, and 32.07% as of August 20th, and customers had no bad inventory. While efficiency improved, overall costs decreased by 5.23%.
Although the growth is not large, it can tell enterprises that as long as you implement and are willing to do some service upgrades, changes, challenges, and try new things, there will be some changes.
**Speaking of promotion service upgrades, let me mention my experience at Wahaha**
Basically, mature enterprises make promotion activities into packages. For example, product A has a display of 20 items at one point, so give money for 20 items at one point. Basically, we do how many points and give money accordingly, basically a one-size-fits-all approach. Doing this, you will find a problem: some points cannot digest 20 items, while some points can easily handle 20 items.
(Image unrelated to article content)
After discovering this problem, we said we need to upgrade promotion services and segment. For example, the company gives us 20 items per group, and a certain amount of money per point, meaning our promotion fee is fixed. Then we change the promotion model. This requires frontline salespeople to understand and be familiar with their own market.
First, segment. How many can accept 20 items at a time? How many can accept 10 items at a time?
In the first round, do those who can accept 20 items. After selling 20 items each month, I will give you again. Then those who cannot accept 20 items will not be given.
Then launch the second round, reducing to 10 items, with rewards also reduced. For them, it is within their capacity, and they will be willing to accept. You may find some points can only digest 5 items. Then don't give them now, and make another round planned for 5 items.
The same cost, just different methods, creates a completely different sales atmosphere. If you do activities this way, sales growth may increase by 20% or even 30%.
Promotion service form upgrades also include, for example, terminal product displays. During festivals like Mid-Autumn Festival, National Day, and New Year's Day, especially in circulation channels, if you do a display activity, it lasts for a month, such as from September 26 to October 25. Basically, we adopt this method. Actually, research found this wastes company resources, at least 50% is wasted. This requires service method upgrades.
How to do it? The period from September 26 to October 25 is also considered a National Day display activity, but we re-plan it. For example, we plan as mentioned before: a group of 20 items, must maintain daily display of 20 boxes at one point. Move this time period forward. For example, from September 1 to October 1.
If I want to check, I think don't check too much; only check irregularly twice or once a month. If I check on September 27 or 28, customers still guarantee 20 boxes of goods. In fact, when it really comes to the seven days of National Day, you will find that your 20 boxes or even more are well displayed by customers. How much cost will this save?
This is the staggered time effect (a discovery we made during our time at Wahaha). It invisibly earns more time. During the 7 days of National Day, you earn 7 more days. You can try this in the market. This is also a rule we explored in the market from service method upgrades, which can save costs for the company and double sales growth.
Wahaha, despite many questioning voices now, I think everyone should learn from its good aspects.
> Content from: Sharing session by Luo Hongwen, author of "Wahaha Regional Benchmark". Compiled and published by New Food Review.
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## Citation metadata

- Publisher: New Distribution
- Author: 罗宏文
- Published: 2016-10-07
- Canonical: https://xinjignxiao.com/en/articles/when-enterprise-sales-hit-a-bottleneck-transformation-cannot-just-be-tal-b6644aa9/
- Original source: https://mp.weixin.qq.com/s/ZJebp3Dn4MkoG-BhWJFktQ

## Copyright and AI use

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