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6 Reasons Why You Need To Know Secondary Sales

Every Entrepreneur and Sales Head we work with wants to know how our Distribution Management System can help them push more products through the chain.  We have been working on how can we use secondary & tertiary inventory data for this objective. The important factors which affect the secondary & tertiary inventory in business are –

1. Production planning

Most of the best-performing products see stockouts in their peak seasons. For another, these brands mistime the ending of the season; these again end up with stockouts or over-stocking, which carries over till the next season, sometimes with the product expiring before then. Every sales rep working with a seasonal product would agree on how they have to start the season with returns.

At a retail store, the volatility of demand is exaggerated once at the distributor and further at the manufacturer. This phenomenon, called the “Bullwhip Effect”, is a nightmare for any supply chain personnel. Having regular and correct stock data from the retail level, even for a representative sample, would not only help identify the problem patterns in hindsight but also forecast crises in time.

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2. Launch of new product

Launching the recently developed product shares resemblance with contribution in a startup. Irrespective of the expectation of possessing a potential blockbuster, the truth is that a remarkable quantity of product launches leads to failure. Considering the fate of a product is tedious and demanding, and determining when sales growth takes place and starts deteriorating tends to have an even much larger problem. Mostly,depending on qualitative analysis and management perceptions prevails over accessing the historic sales information to forecast the product cycle, a less information-driven approach.

While complete removal of uncertainty at the time of a product launch may not be successful through analytics, it can definitely be minimized. By demonstrating correlations among products resembling product life-cycle (PLC) curves, a Machine Learning algorithm has the strength to improve predictions and significantly reduce Mean Absolute Error. Such reduction in mistakes can translate to noteworthy expense savings.

Read More – 8 Ways To Improve Distributor Sales Performance

3. Optimization of Sales Push

In a mature market, gaining even a 5% hike in sales within competing markets can be daunting work. One resolution introduced by our experts includes instigating a bottom 10 campaign with a customer. Rather than focussing on the highly-performing accounts, the concentration transferred to the most neglected ones accounts with slightest company sales and store area ratios.

With the help of strategic and focussed efforts from sales managers, executives, distributors, merchandisers, auditors, and promoters focussed significantly at such accounts, the entire sales witnessed a 4% enhancement within a short span of a couple of weeks.

4. Distributor and sales team evaluation

The implementation of the complete strategy of trade marketing is dependent on the channel partner and the team. In every company, a lot of effort is put into selecting and hiring the right employees and partners, with paying additional fees to the hiring consultant. And once the connection is established among them, the entire focus shifts to retaining them, rather than evaluating their performance. It is essential to evaluate them frequently and manage their churn to suit your objectives.

SalesBabu DMS solution gives out an individual balanced score for partners as well as employees. The score is designed to include multiple objectives from both Marketing and Sales. These objectives of the organization can always be captured in pure data form, which can be drawn either from analytics or primary data captured by the field executives & auditors.

In the person being evaluated the subjective assessments create less distress.  Allow them to work on their own strategies to improve their score and set benchmarks for the future as well. These scores or underlying variables are proportionally accumulated by the company to create evaluation scores for their supervisors and further ups as well.

Read More – Advantages Of Using A Cloud Distribution Management System

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5.  Marketing planning

Investing more in Trade or Consumer Marketing is a question that can easily create a war between the Sales & Marketing departments. Promoters from both sides can have long-time arguments on the cost and efficacy of them both. The number of factors on which the sales number depends would easily be in 3 -4 digits. So how do we come to know if it is an issue of trade marketing (PUSH) or consumer marketing (PULL)?

With one of our clients, our team deciphered this seemingly unsolvable puzzle by a simple metric, ‘Ds – days of stock in a retail outlet’. If the number Ds was greater than the benchmark, it needed more Pull (consumer marketing). If the number Ds was less than the benchmark, it needed more Push (Trade marketing). SalesBabu aggregated these numbers and the company had a readymade strategy for everyone including the territory, region, and team.

6. Inventory optimization

All agree to inventory optimization, as long as it involves stocking more products at the distributor and retailer ends. This load-the-market psychology is driven by two key thoughts: First, the more quantity of stocks are loaded on the channel partner, they are more likely to push that product further down: and second, the individual KRA’s of the sales team is determined by sales numbers alone.

While the sales role push in a competitive market cannot be null, there is a cost associated with having old stocks on shelves, returns, expiry and associated retailer anxiety. Thus, particularly for a mature and demanded brand, it is critical that inventory is optimized at each level and outlet. And with many brands and retailers and both numbers changing rapidly, there is no ideal number that can be pre-decided.