A while ago, I visited a Yili distributor friend (Mr. Li) in person. As soon as I entered, I saw my buddy earnestly communicating with a salesperson who had submitted a resignation. After understanding, this salesperson had served in his company for nearly 3 years, and his performance in the team had always been good. But recently he reported: "Now I go out early and return late every day, it's getting harder to complete store visits, and sales tasks are getting heavier, I can't hold on anymore." The retention attempt was ineffective; the salesperson was determined to leave, probably already having found a new job. Mr. Li was also a bit depressed, and sitting down, he said to me: "Business is getting harder, staff are harder to retain, online impact is growing, and offline deep distribution is becoming less effective. I don't know what to do." I analyzed: It seems Mr. Li hasn't been deeply involved in the front line for a long time, at least not visiting the market as a salesperson or inspector, visiting stores one by one. First: Business is getting harder. Indeed, the incremental market has become a stock market, and the market has shifted from everyone having food to competing for food, increasing pressure. But as a leading dairy brand, Yili has advantages in brand power and more, so there should still be room to play. Second: Staff are harder to retain. Retaining people is about money and emotions. Mr. Li's character and way of dealing with people are beyond reproach, so it must be a money issue. Money comes from sales, sales come from the number of outlets and per-outlet output. Is the number of outlets sufficient? Is per-outlet output high? Is there much room for improvement in both? Third: Online impact is growing. The online impact mainly involves price (cheaper during promotions) and convenience (home delivery). As far as I know, most of the time, Mr. Li's main selling items and prices are exactly the same as online, and community convenience stores are densely laid out in communities, so online should have little impact on Mr. Li's business. Fourth: Offline deep distribution is becoming less effective. There are three possibilities for consumers purchasing products: 1) They name the product to buy. For example: entering a store, they ask the owner, "Give me a carton of Jindian." 2) It sells when displayed. For example, Henan dairy brand Huahuaniu, when displayed, consumers accept it. 3) They need the owner's recommendation. For example, other third-tier dairy brands. For Yili, the product's sell-through gene is still strong, and many purchases fall into the first category. I suspect that Mr. Li's distribution channel has problems. I added: Your market has about 600,000 people. According to traditional beverage outlet estimates, there should be 600,000/400 = 1,500 outlets. For milk, even with a discount, say 1,000 outlets. How many do you serve? What is the service quality? At this point, Mr. Li hesitated and couldn't explain clearly. The core of deep distribution is to lay out distribution channels more reasonably and improve the quantity and quality of served outlets. Whether the number of outlets is reasonable, we'll drive to the market to see in a moment. For outlet quality, we'll arrange a clerk to make a table like this. At this point, we organized and drove to visit markets at city, town, and village levels, and found the following problems:
1) In the city, many newly developed outlets in traditional channels are served by wholesalers. Salespeople fear offending big clients and give up these outlets to wholesalers, while competitors visit regularly. Terminal store owners haven't seen distributor salespeople for a long time. Wholesalers' short-term profit behavior has led some terminals to stop cooperating due to difficulty in restocking. 2) Modern channels have 100% coverage, good image, and relatively complete merchandising, mainly because Mr. Li pays high attention. 3) Town and village outlet coverage is very low, less than 50%, and some village sales points are sporadic. 4) On the road, we met a salesperson who had no route map, no clear understanding of his area boundaries, and wandered around the market. He got 6 orders in a day, and in the evening summary, other salespeople had similar situations. Back in the office at night, the clerk's data also came out, even more shocking: the number of outlets was very low, estimated at about 80% of competitors, outlet quality was uneven, low-sales outlets accounted for a high proportion, and some outlets only received goods once every 2 months, with monthly sales of only a few hundred yuan. The average daily orders per salesperson were less than 10, and the daily order rate per customer was less than 30%. Seeing such data and actual conditions, Mr. Li fell silent. The previous four "getting more" statements no longer held. How to improve? We divided into the following steps to enhance his distribution capability from a deep distribution perspective. Step 1: Personally take charge and take inventory of outlets Collect market industry outlet information, conduct field visits to confirm specific conditions, establish outlet files, including but not limited to the actual situation of our products and main competitors and terminal performance actions, updated monthly. 1) Store category sales capacity; 2) Competition situation, sales performance and competitive trends of each brand; 3) Terminal performance, distribution, position, display, price, inventory, sales aids, and promotions of each brand. Step 2: Determine targeted service outlets First, calculate: Break-even sales per outlet = (salesperson cost + logistics staff cost + warehousing and distribution cost) / profit per unit. This leads to three situations: 1) Outlet sales greater than break-even sales; 2) Outlet sales equal to break-even sales; 3) Outlet sales less than break-even sales. Obviously, the first and second can be served by our staff. For the third, depending on potential, most should be handed over to wholesale service (products ride on the wholesale truck). Of course, for other products, targeted outlets must be more suitable sales venues for the product, and also the first outlets to capture for new product distribution. Step 3: Route planning and clear area boundaries Route planning relates to the salesperson's working area. Good route planning can greatly improve the efficiency of market operations and reduce disputes between salespeople. It requires using main roads and streets as boundaries (noting left and right area ownership). **Note: Balance output and number of served outlets in each area, ensure balanced daily in-store time, balanced daily visit radius, reasonable visit order, and salespeople must have clear boundary diagrams and necessary written explanations to ensure clear rights and responsibilities. Step 4: Service planning and strategy planning Design service strategies for each channel outlet. Hypermarkets, MA stores, circulation stores, special channels, etc., have different models and channel strategies. For example: For circulation channels, weigh the number of salespeople based on the number of served outlets and in-store time; for modern channels, weigh based on store size and sales; for special channels, weigh based on channel type and distance between points. There are only two principles: maximize outlet service and facilitate salesperson visits. Here we must mention the staffing issue in deep distribution. Market staffing is determined by several aspects. For example: If there are 500 targeted outlets in traditional channels, daily working time is 480 minutes, single-store in-store service time is 10 minutes, travel time is 150 minutes, morning meeting time is 30 minutes, and visit frequency is once a week, then the total in-store time = 480-150-30 = 300 minutes. One day can visit 300/10 = 30 stores, one week can visit 30*6 = 180 stores, serving 500 stores requires 500/180 = 2.78 people, so the circulation department can have 3 people. Step 5: Once everything is ready, continuously track and check At this point, the terminal system is particularly important. For deep distribution to succeed, planning and design are important, but whether these things can be implemented is even more important. For example: the salesperson's store arrival rate, visit success rate, entry and exit times, in-store time, work timeline, in-store execution, etc. Multi-dimensional data collection determines whether their supervisors have clairvoyance and omnipresence. Supervisors should review data daily and regularly re-sort routes to ensure deep distribution is implemented solidly. After improvements, Mr. Li's market and team improved significantly, business performance steadily rose, overtime gradually decreased, and morale stabilized. Distributors facing operational difficulties should look at their own reasons more, not follow the crowd. Whether deep distribution is effective depends on whether you have done it well. Walk more in the grassroots market, and you'll understand everything immediately. For distributors operating first-line brands, products have strong brand power and sell-through power. If you do deep distribution well, sales need not be worried; for non-first-line brands, doing deep distribution well, extending to deep sell-through, also need not worry about sales (I will share the logic of deep sell-through in my next article). Finally, if any distributor needs a terminal mobile system for frontline salespeople, you can add me as a friend, and I can help recommend one.