vsi asia logo

A member of Kapgruppe Companies

Sales

Case 5: chaotic sales promotion management

Case 6: when sales performance data can be falsified

Case 7: when sales promotion team needs to be rejuvenated

Case 10: to collect earlier

Case 11: the strength of the sales team

Case 13: discount structure

Case 17: expanding the distribution to pocket areas

Case 5: Chaotic Sales Promotion Management

Topic

Sales, Marketing, Team

Company

A Global Consumer Product Company

Problem

The implementation of sales promotion programs often faced problems either because the promotion materials didn’t reach the store on time or the promotion staff weren’t informed on time.

Facts known
  1. Sales promotion program happen every 2 weeks for all stores but for different product lines because this is the nature of the business in the industry.
  2. There were 5 sales promotion supervisors with more than 50 sales promotion staffs; and 5 Key Account Managers with 15 chains of stores.
Audit process

Interview all related staffs and field audit.

Findings
  1. The sales promotion supervisors were assigned by area (North, West, East, South, Central), hence making each one of them responsible for the whole 15 store-chains in each area.
  2. Such assignment is inefficient because sales promotion programs were coordinated with the store-chain’s head-quarters; all 5 supervisors had to go to the same store-chain headquarters for the same promotion programs.
  3. It also meant that each of the 5 supervisors had to work with all 5 Key Account Managers, making them have all of the pressures with no real accountability.
Suggestions

Assign the Sales Promotion Supervisors by Key Account Managers, therefore 1 Supervisor reports to 1 Manager and be responsible for the store chains of the respective Manager only.

Follow up
  1. Quality of promotion execution improved significantly/less hicups
  2. Less sick day leave among the Sales Promotion Supervisor
  3. Reports of promotion programs are ready quicker with better quality
Engagement

1 week

Case 6: When Sales Performance Data Can Be Falsified

Topic

Sales, Team, Control.

Company

A multi-national FMCG Company

Problem

Sales promotion team’s sales performance was reported as high but it was not in line with the company’s actual sales performance.

Facts known
  1. Sales promotion team’s performance was self-reported because the team couldn’t get computer-generated data from the stores.
  2. It was designed that way to be ‘fair’ to sales promotion team.
Audit process

Interview, field observation, and document review.

Findings
  1. Many self-reported performance were intentionally marked-up.
  2. Company has access to system-generated store’s purchase numbers (not sales).
Suggestions

Change the incentive calculation to use only the system-generated store purchase (sell-in) numbers.

Follow up
  1. The company implemented the suggestion.
  2. Interestingly, sales promotion team members who used to ‘always exceed target’ when the sales performance was self-reported suddenly never met their numbers even after 3 months, but total company sales performance increased.
  3. The whole team members were then had to be reviewed.
Engagement

1 week

case 7: When Sales Promotion Team Needs to be Rejuvenated

Topic

Sales, Team

Company

A Global Consumer Product Company

Problem

Sales promotion team had to be rejuvenated after many were known to have intentionally submitted false sales performance report.

Facts known

Sales promotion team members are sub-contractors from a temp agency.

Audit process

Interview and observation

Findings

There was no recruitment standard for sales promotion team members by the recruitment agency and by the company.

Suggestions

Establish a set of recruitment standards that include:

  1. Aptitude test.
  2. Interview
  3. 3-month probation period
Follow up

Company implemented the suggestions and the team has proven to deliver better sales performance.

Engagement

1 week + 2 months

Case 10: To Collect Earlier

Topic

Distribution, Collection, Finance, Sales

Company

A Leading Manufacturing Company

Problem

A lot of sales revenue weren’t collected on time

Facts known

Payment term is only 2 weeks.

Audit process

Interview, document review

Findings
  • The delay on collection was because of the delay in invoicing.
  • The delay on invoicing was because customers needed the copy of Delivery Order to be sent along with invoice but many Dos are stuck with the truck drivers.
  • The DOs were stuck with the truck drivers because one truck can deliver products to several cities in Sumatra and it takes almost three-weeks to finish one-route.
  • And after the truck driver finish their route, they will bring the DO back to their own HQ for the truck company do the billing to the Manufacturing Company. Therefore, the total cycle could take at least 7 weeks before customers could be billed.
Suggestions
  1. Truck driver must be required to send one copy of the completed DO to the company via registered mail so that the company can send the invoice to customer immediately without waiting for the truck driver to complete their route.
  2. To ensure that truck driver send the DO to the right address, they must be provided with:
  • Pre-printed envelopes with the company’s address as the recipient.
  • Sufficient amount of money to pay for the registered mail cost.
Follow up

Company implemented the suggestion and their over-due collection was reduced significantly.

Engagement

1 day

Case 11: The Strength of the Sales Team

Topic

Sales, Team

Company

A National Distributor of A Global Manufacturing Company

Problem

Sales number was down and the company lost market share to competitors. 

Facts known

Company had 6 sales people

Audit process

Observation and interview

Findings
  1. Sales people didn’t understand the technicalities of the product and doesn’t understand the product’s unique selling point and therefore they do not know how to be ‘problem solver’ for their customers.
  2. Sales incentive scheme was based on total company achievement, not based on personal achievement.
Suggestions
  1. Train the sales people to understand the product technicalities and selling points.
  2. Revise the incentive scheme to be based on personal achievement.
  3. Hold a customer gathering program that cost IDR20,000,000 for 400 customers as a marketing program.
Follow up
  1. The company implemented the suggestion and sales numbers were up by 65% in 4 months.
  2. The increase in sales was so high that it created new problem: The delivery capacity.
Engagement

3 weeks

case 13: Discount Structure

Topic

Marketing Mix (Pricing), Sales, Strategy

Company

A National Company

Problem

Profit is low despite the fact that sales volume has increased and operational costs has decreased.

Facts known

Some customers receive special discounts

Audit process

Interview, data review, discussion with management

Findings
  1. The company sold to the biggest customer at loss.
  2. The low pricing to the biggest customer makes other customers lost interest in purchasing the product because they can not compete with ‘normal’ price.
  3. Hence the company becomes more reliant to the biggest customer for volume, but always at loss.
Suggestions
  1. Establish a discount structure based on several criteria:
  2. a) purchase volume in a year;
  3. b) Payment term.
  4. Increase price in general
  5. Seek more volume discount from supplier
  6. Develop new customers with better discount structure
Follow up
  1. Reviewing customer’s discount is a decision that requires brevity, a character that is possessed only by select few. Unfortunately the business owner cannot follow up the suggestion for fear that the big losing customer would go away because eventhough it is a losing customer, the company likes the idea that their products are sold though they lose money from the sales.
  2. The sales price was increased but because the big customer still bought a big chunk of the product and still at losing price, the profit did increase but not as much as expected.
  3. Supplier was willing to give a small additional discount and therefore it did help the company to not lose too much money.
  4. The company did develop new customers with new discount structure.
Engagement

1 week

Case 17: Expanding The Distribution to Pocket Areas

Topic

Distribution, Sales, Strategy

Company

A building material company

Problem

Distribution of the company’s product in one ‘pocket’ area in Indonesia was less than 5% of the market size of the area.

Facts known
  1. There are more than 200 stores in the area and only 4 carried the company’s product.
  2. The area is a rather prosperous area.
  3. The area is covered by a distributor from the capital city of its respective province
Audit process

Interview, field survey

Findings

The area is located about 4-5 hours from the capital city of the province and therefore distribution cost was high

Suggestions

Develop 1 sub-distributor for the area

Follow up
  1. The company implemented the suggestions
  2. The market share of the area increased significantly because now customers can be served immediately and more stores are willing to sell the products because service lead-time is less than 1 hour.
Engagement

2 weeks

Copyright vsi.asia | By wirawebsite.com