Next Level Business Management
A client asked me a good question. This Export Manager stated that he always achieved his personal objectives, sold his brand across all countries, and maintained a pretty good group of strong distributors. What strategies could be implemented to drive his business to the next level ? My basic response was that this company needed to adopt the rigor and discipline employed in hitting their sales quota and apply this approach to metrics around the causal factors that drove in -store purchases. At Export Solutions we call this methodology Next Level Business Management.
Factory Sales = Warehouse Inventory
We are all focused on surpassing our shipment objectives. In many cases, we meet these expectations by shipping inventory to our distributor or a customer’s warehouse. True sales are achieved when a consumer purchases our product and the retailer needs to reorder to replace store inventory.
Supermarket Shelves- Product Showroom
Supermarkets and other retailers serve as the showrooms for our brands. An attractive showroom, with well displayed products and an invitation to buy , encourages purchases. How do your store showrooms look ? How do you measure a good store versus a bad store ?
Introducing MAPS Metrics
MAPS is an acronym for Merchandising, Assortment, Pricing and Shelf Management. The basic concept of Next Level Business Management is to establish clear objectives , focus, and tracking methodology around the fundamental drivers of in store performance. The theory is that by improving MAPS performance, you will improve in store sales turnover and force sales replenishment throughout the supply chain.
Assortment- First Priority
In store presence can not be tracked until an item has been authorized for sale at a retailer. Our first tool and step is normally centered on managing a one page listing map ( see page 5 sample). This allows you to track all your items penetration at leading retailers. You can establish a customer weighting, by size, and a listing percentage reflecting total market coverage. It is important to understand what percent of a retailers stores where you are authorized. I remember the famous story of a British brand whose partner claimed distribution at Walmart USA. Further investigation revealed them selling to only 45 of 3,200 Walmart Supercenters.
Shelf Management & Pricing
What does an ideal shelf set look like for your brand? How much space do you have relative to your Category market Share ? Are you on the eye level shelf ? Are you placed next to your prime competitor if this is desirable. Is your brand priced at parity versus a similarly priced competitor. Is the price gap versus private label within the targeted range. Has the retailer applied an equal margin across all of your line extensions ? These are all tangible measures that may be tracked via a numeric response or Yes or No answer.
Incremental sales are driven by special investments in promotional activity. Next Level Business Management quantifies quality merchandising drivers and assigns measures. Did feature ad meet targeted price point ? Was there a display ? How many cases were on the display ? Was the feature Ad a “major Ad” or a small line mention ? What percent of your allowance or discount did the retailer reinvest in a lower price ? Was there a secondary display or location in the store ?
These are all critical elements that can be tracked and evaluated.
“What’s Measured is Treasured”
“The distributor respects what the brand owner inspects”.
“What gets measured gets done”. These are all famous slogans with the same basic message: Track something and a distributor will try to meet expectations. The basic idea is to measure a distributor based upon more than just shipment numbers. In general, begin with metrics around Assortment, and then move to other areas such as Shelf Management, Pricing, and Quality Merchandising where the distributor may have opportunities. Do not inundate the distributor with new metrics around every aspect of their business.
Export Solutions has expertise at deploying Next Level Business Management programs with leading international brands. We have the experience of designing metrics for your brands and sharing techniques for rolling this program out to your sales force and distributor teams.
Contact us for help in applying our next level system to your business.