Sales: Understanding your role

This section is for all the new joinees in the Sales function. It will help us understand the role in greater detail along with the basic terminology and reports that are used in Sales. 

The basic Terminology

Coverage

Productivity numbers

What are the essentials of Good Coverage?

Coverage Must-do's

There are some standard practices that we must follow to ensure that our calls are productive. 

First up, let's see what your typical day should look like? 

There is an immense opportunity to make a difference in the market. The Foods industry is growing by leaps and bounds, and ATFL has the right products and processes to get a large share. We need to be focused on productive selling. 

Making our day productive

What is Productivity?

How many Productive Calls do you make in a Day?

As a quick check...

…The Productivity levels of some of our comparative FMCG companies is : 70%

Calculate the gap between your productivity and the best-in-industry?

(Productivity percentage is calculated by dividing the number of productive calls by total calls & multiplying by 100)

Count the total number of calls you make in a day and subtract the calls in which you cut "Zero" bills, i.e. sell none of our products. This give you the number of productive calls.

Why focus on productivity?

Let’s calculate the business value of your calls

What is your average bill value?

Let’s say, you cut a bill worth Rs. 500 per outlet on an average everyday. 

Of the 40 outlets that you have in your beat, if you are converting only 12 outlets in a day, your TBV is Rs. 6000. Right?

What does this mean in Financial terms? 


How does this change when you make more calls productive? 

Let’s say instead of 12 bills, you achieve 25 bills cut in a beat of 40 outlets. 

Productivity % will now be 62.5% against 70% of benchmarked Companies.

Even if your average bill cut value remains the same, what will your TBV be now?

That’s right! You do an additional business of

Rs. 6,500…

  … A total TBV of Rs. 12,500.

So what do the financials look like now? 

Can this loss be reduced further? 

...Of course! 

As an example, see above

In summary

Productivity is to cover more outlets in a beat, at least 40 

Also, achieving more bill cuts – at least 25 - is critical to productivity. 

We must also focus on selling higher margin products to increase profitability.

What's in it for me? 

Your career depends on your Productivity! 

Most productive, i.e. Best performing ARS – get the opportunity to become ATFL Sales Officers 

Best performing SOs become Area Heads, and so on.


The 'how' of making a call productive? 

Identifying and using a lever brand and building strong relationships in the market are the only two things needed to make a call productive. 


Leveraging our carrier brand

Which is the brand from our large portfolio that will give you an entry into your retail outlet? What is the brand that sells easily in the market?

As an example...

• At Rs. 5, most outlets are willing to keep the RTE 

• Can we place it in 80% of our outlets? 

•…and slowly build other brands around it once the retailer has confidence!

How do we build retailer confidence? 

By making our retailers aware of our: 

1. Supreme product quality 

2. Best in class packaging 

3. International level manufacturing process 

4. Healthy and tasty products

And also ensuring them of our consistent service. 

Retailers will believe in off-takes: 

• Sampling 

• Demonstrations 

• Consumer trials 

• Awareness programs 

… all are very important in building off-takes.

On the last note...

For being productive:

 • Be prepared 

• Plan your time 

• Push your limits!  

Wish you all the best

Reports

Planning your day

PIP

Do you have a larger picture of what big targets you need to achieve? Prepare your 60-day PIP every cycle. 

PJP

The Permanent Journey Plan refers to where you will be travelling or which markets you will be visiting this month. 

Beat Plan

Every market you visit will have a beat plan. This lists all the outlets you will be covering during the day. 

Morning SMS 

Informing your manager through an SMS when you start the market. 

Closure report in the evening

At the end of each market working day, an SMS has to be sent to the manager updating him/ her on the key numbers like DBC, TLS, TBV, new outlets opened, and any challenges faced.

Trackers

You will also receive a number of activity trackers and EFF trackers, which have to feed into the RSAs (Regional Sales Assistants) and TMEs (Trade Marketing Executives). These have to be regularly updated and sent as per the timelines given. 

Using MS Outlook to make your day more planned

The power of MS Outlook

At ATFL, we use Outlook widely to organise our work and plan our day productively. 

MS Outlook can help you manage emails, keep your appointments and even sync your calendar with your phone. 

Few of us have unleashed the full potential of this powerful tool. There are three main features that we can focus on 

Calendar

You can calendarise all your: 

- Meetings

- Activity trackers

- Market work plans

- Reporting dates

And many other deadlines in the Outlook calendar. 

Notes

Make additional notes and use the "To-Do" list feature in Outlook for ensuring that you never forget even the smallest of details regarding a subject

Folders

Outlook lets you index your emails into folders. Plan your work in a way that it is easy to retrieve when you need it. 

Calendars

Never miss a deadline. Capture everything from which market you will go to today, which report is due, recurring meetings like making claims and sending your Travel Expenses, PIP and PJPs. PIPs with managers could be turned into appointments. 

You can also share your calendar with others who might be effected by it.

Go to the calendar view and set up a meeting. Choose Recurring if you know this meeting will occur frequently. 


Select how frequently this meeting will occur and if it will end after a few occurrences, you can set that as well. 


Reminders

You can easily set a reminder - whether you want to be reminded of the meeting a day in advance or a few hours before the meeting. 

Then sync your Outlook with your phone: 

Sync the calendar with iphone

Sync the calendar with android

There are many other tools available like the S-planner (for Samsung phone), etc. for linking your Outlook calendar from the laptop to your phone so you are totally planned. 

Notes

Check the panel on the left and go to Notes. 

Enter your new notes, which will be displayed on the top of the screen as a constant reminder. 

Folders

Add folders related to your team, activities, etc. Keep emails from managers separate for quick access. A different folder for your Tareefs and recognition is also a nice thing to do! 

ATFL 7 Steps Sales Call process

Introduction

ATFL follows a rigorous 7-step sales call process. 

Before going ahead with this section, you are required to watch the "ATFL Sales Call Process" Video DVD that you have been given along with your joining kit. 

Please contact your HR in case you have any concerns in running it. 

1. Pre-call planning

What is pre call planning? 

Pre call planning is done at 3 stages:

Importance of pre-call planning

Setting your pre-call planning targets

What did Anil do wrong in the "bad call" in the video?

What was Anil's right way in the "good call"? 

2. Greeting the retailer and Rapport building

What did Anil do ‘Wrong’ in the first call?

Anil’s right way of Greeting

3. Problem solving

What did Anil do ‘Wrong’ in the first call in the video?

Anil’s right way of Problem Solving


4. Physical stock and stock rotation

What did Anil do ‘Wrong’ in the first call?

5. Merchandising and Visibility

6. Order taking by range and Objection Handling

7. Thanking the retailer

Before you close the call, don't forget to: 

- Thank the retailer for his time (even if the order wasn't what you had expected!)

- Repeat the order you have taken, so there's no confusion

- Inform the retailer when he can expect the order to be serviced

- Ask if there is anything else you can help him with

Important! 

As a Sales Officer, you also have a people management role to play. 

You will visit the store with your EDS, so if your EDS is making the call, remember to take notes which will help you coach your EDS later. Note down both the strengths and the improvement areas, and talk about them later to your EDS. 

Select the correct order of the 7-steps Sales Call process at ATFL.

  • Thanking the retailer - Order taking - Merchandising and Visibility - Pre call planning - Problem Solving
  • Merchandising and Visibility - Order taking - Pre call planning - Greeting the retailer - Problem Solving - Physical stock check
  • Pre call planning - Greeting the retailer - Problem Solving - Physical stock check - Merchandising and Visibility - Order taking - Thanking the retailer
  • Pre call planning - Greeting the retailer - Problem Solving - Physical stock check - Order taking - Thanking the retailer

Select any 3 types of merchandising material that you can use inside an outlet from the list below.

  • Overhead banner
  • Background poster
  • Star cards
  • Danglers

In a very small store, the retailer argues that there is no place to display our products. What will you do?

  • Retailer knows best so agree with him and try another time
  • If product visibility is not possible, you do a lot of merchandising
  • Plead the retailer to put some posters even if he takes them off later.

Pre-call planning needs to be done at which of the following stages. Select all that apply:

  • Every morning before you go to the market
  • At the start of every month
  • Before entering each outlet

What are the key benefits of Stock Check? Select all that apply:

  • Stock check uncovers damages & leakages
  • By moving near-expiry stocks to the front, we minimize expiries
  • A consumer will pick only clean, dusted, fresh stock
  • You can prepare part of your next order during stock check

In an outlet, you can benchmark all Ready-to-Cook Foods like Maggi, Knorr Soups, Oats, etc. to which of our following product?

  • ACT II RTE
  • ACT II IPC and MWPC
  • Sundrop PNutz
  • Sundrop Oils

Being prepared with a variety of resources and information about the company, helps in Objection Handling. True or False?

  • True
  • False

Your retailer is worried about keeping the new SKU you have shown him just now. What will you do?

  • Request and plead him to keep it so that you can meet your target
  • Explain to him that it is doing well in other stores and you will ensure off-takes

As per the ATFL D&L policy, we accept all expired stock as well as rat bites. True or False?

  • True. All problem stock is replaced from the outlet.
  • False. Only expiries are taken back. Rat bites are caused because of the retailer's mistake and therefore are not taken back.

Why is the Greeting and Rapport building step important?

  • It is important for your general knowledge
  • It increases your social circle of friends
  • It helps break the ice with the retailer and adds a personal touch to the process, thereby helping your sales
  • It is not important at all

In one of your beats, you step inside an outlet and the retailer immediately tells you that your distributor has not been passing schemes to him. He is very upset. What will you do?

  • Say Namaste to the retailer and ask about his family
  • Ignore and walk into the outlet to check the stock
  • Shout at the retailer and tell him that this is no way to behave with someone who has just stepped into his shop
  • Listen completely and patiently to the retailer, then assure him that he will speak about this to the distributor today and call him back by the end of day

While sampling Sundrop Heart, what is the unique value proposition that you will display at the sampling table?

  • Strong Banne ka tasty tareeka
  • Scientifically Proven to help reduce cholesterol in 30 days
  • Hot and fresh in 3 minutes
  • Good for your Heart

You placed 5 jars of SD SLA in an outlet last week. This week, you see that there are 2 jars left with an expiry of 6 months left. Will you:

  • Take an order for 5 more jars of SD SLA
  • Wait for these 2 jars to be sold before you place more
  • Take an order for 3 more jars of SD SLA and place the older 2 jars in front of the fresh stock
  • Ask the retailer how much you should give him

What is Merchandising?

  • The activity of delivering goods to outlets
  • The process of taking the orders in the outlet
  • The process of invoicing stock
  • The activity of promoting the sale of goods at retail

Which of the following is NOT a benchmark of Sundrop Peanut Butter?

  • Butter
  • Nutella
  • Juice
  • Jam

In the 7-step sales call process, what is problem solving?

  • Pre-emptive resolution of a retailer’s problem
  • Solving problems that you have with the retailer
  • Asking the retailer if he has any problems
  • Ignoring the retailer’s problems

What is range selling?

  • Selling without a price range
  • Selling more of the same product to the same consumers
  • Selling within a defined market
  • The approach of selling larger variety of products and services to a consumer

Which number helps us monitor our Range selling performance?

  • TLS
  • DBC
  • TBV
  • EFF

Distributor Management

ATFL RDS (Re-Distribution Stockist)

What is a distributor? 

A distributor is a businessman and his prime interest in partnering with us is his ROI or return on Investment. 

He is our business partner, which means that is it very important for him to believe in our business vision, direction, strategy and products. He must be aligned to our company in the long term and cannot be looking to do business as a short term venture.

As our business associate, an RDS also brings local knowledge to expand market reach. However, an RDS is not exclusive to us. He may be working for other non-competing brands. As an ATFL RDS, we prefer him to have exposure in the FMCG industry.

RDS Infrastructure and Investment

Like every business, a distributor also makes an investment in the business. This is what he gets a return on. Let’s now discuss what categories he has to invest in. First of all, every ATFL Distributor must meet the following infrastructure norms:

The godown where our products are stocked by the distributor can be rented or owned. In either case, the distributor will attribute a portion of the cost towards his investment in the business. This means, if the warehouse is rented, the monthly rental will be included in the cost of doing the business and he will calculate his ROI basis this rental. 

On the other hand, if the godown is owned by the distributor himself, he will use a method to calculate this figure. This could be related to how much rental he could earn if he had rented this space, instead of using it in the business. Alternatively, he could charge the amount equal to how much he would have to pay if he was using a rented property. In any of these cases, you will have to verify the amount that he is charging towards the Rental head.

 Now is there a minimum or maximum space that the distributor must allocate towards our business? Not really. It all depends upon the size of the business and the nature of his product mix between Oils and Foods. So just ensure that he is stocking the products in a clean, hygienic way without causing any damage to the cartons. There is enough space to stock and move the cartons in his godown.

  • You may be aware that any distributor will have 2 modes of operations – ready stock and order booking. In the first model, a salesperson will visit all the outlets in the beat along with the stock in a delivery unit. He will take the order at the outlet and immediately service the order with the stock available in the Ready Stock Unit (RSU). He will immediately collect the cash also.
  • In the other model of order delivery, the salesperson visits all the outlets in a beat one by one. He will take the orders for each outlet and give that order to the distributor. The distributor will then arrange to send the order to the respective outlets the next day. The person who services the order will also collect the cash or sometimes there is an arrangement to work on a few days of credit.
  • Now in both these scenarios, the distributor will need to have a delivery unit. The size and nature of the unit will vary slightly depending on the model of operation. The distributor may also employ a separate driver sometimes.

 The cost of the unit (hire charges, if rented or depreciation & maintenance, if owned), salary of the driver and the fuel charges - all add up to form part of the distributor’s investment as well.

In the running of any business, the entrepreneur will incur manpower costs too. In the case of a distributor, he charges the salaries of distributor salesmen, drivers or delivery boys, etc. One Exclusive salesman (EDS) must be engaged for every Rs. 12.5 lacs sales value.

Apart from these large infrastructure investments that the distributor makes, he also needs to invest into the monthly running of the business. This entails several other costs like telephone bills, stationary, electricity, etc. These expenses will be charged on actuals. 

In addition, month-on-month expenses will also include: 

• Paid up stocks/ Inventory: 

–5 days worth of sale in depot towns 

–10 days worth of sale in other towns 

• Market credit 

–Upto 7 days of sale 

• Claims pending

-2 days worth of sales

Calculating ROI

In the beginning of this module, we discussed that a distributor is a business and his main interest in our business is his earnings, in other words, his ROI.

ROI stands for Return on Investment. In the earlier section, we’ve gone through the different types of investments made by a distributor in our business. It defines the profitability of the business. For a businessman, an investment is successful if his return on this investment is higher than if he had invested this money in some other venture. This is called the Opportunity Cost, and that’s why we must ensure that the distributor has a good opportunity cost with us.

 How does he calculate the return on his investments?

ROI Calculation has a simple formula as given above. Now let's break it down further to understand its components: 

Do you remember our gross margin on different products? As a recap, the RDS margins are: 

So going by this, you will calculate the margin depending on how much of each product we have sold. Now the next step is to calculate the expenses. 

Here what one needs to be extremely careful about is the way one calculates the Average Closing Stock of the distributor. Sometimes taking the month-end closing stock as the average closing stock, or just asking the distributor for his estimate can give you a very incorrect picture.

If the distributor is using the same infrastructure listed above, for his other businesses as well, you will have to apportion the % of turnover towards the ATFL business. 

Now let's calculate the second part of the ROI formula, i.e. Investment: 

Let's calculate the ROI with the formula we just saw. Assume the RDS invests Rs. 5, 00, 000 in our business and earns a gross margin of Rs. 1, 20, 000. His total expenses are Rs. 30, 000.

ROI will be  = (120000 – 30000/ 500000) * 100

                        = (90000/ 500000) * 100

                        = 18 %

  • 15%
  • 18%
  • 20%
  • 17.5%

FES – Fractional EDS Subsidy

In a typical scenario, the RDS makes 18% -20% return, which is the common for the FMCG industry, and will be sufficient to run his business, with the infrastructure that we requires. However, in certain scenarios, like in the beginning of the distribution arrangement, his business may not be sufficient to support the infrastructure requirements, and support the salesmen salaries.

To support the RDS, we, at ATFL, have come out with a concept called Fractional EDS Subsidy or FES, which works as follows.

The principle behind FES is to create a link between how much the RDS pays for his manpower for ATFL and his ATFL turnover. Now let’s understand how FES is calculated. For every Rs 12.5 lakh business, the RDS is required to provide one EDS on his own who will not be paid by the company. The calculation of the subsidy will be done on the basis of actual salary paid to the EDSs, which is as follows:

Let's see this with the help of an example

It’s important to note that the salesmen covered under the fractional subsidy have to be EXCLUSIVE for ATFL business only. This means that when they visit the outlets, they take orders only for ATFL products and not the other products that the distributor deals with.

Managing Difficult RDS

Like consumers, sometimes distributors are also tough. They are businessmen, and they will ensure that they try everything to squeeze out the maximum returns from their business. This may sometimes include steps that are not in the best interest of our company.

Think about all the situations in which you have had to face a difficult distributor. Write some of them down. 

Our role as a Sales Officer is to realise that we will face such tough distributors and we are able to handle them effectively. Let’s see some examples and understand this.

The first thing is how confident you are when facing the distributor, and do not get intimated by him. No matter how many years of experience he has, his primary role as a distributor remains to service the market efficiently. So as a Sales Officer, you have to work with him, with respect of course, and point out the mistakes he is making in his coverage. Being assertive is the key here. Neither an aggressive behaviour nor a passive / meek attitude will help. Needless to say, you have to know the insides of the business first – what is the trend, what is the financial viability of the business he is doing and so on.

First of all again, doing your own homework is most important here. Do you understand why it’s important for us to work towards building our Foods business? What is the vision statement of our company? What are the margins we earn on Oils and Foods, and why do we offer higher margins to our retailers and distributors on Foods? These are all questions that you should ask and have answered in forums with your managers. Once you are convinced, you will be able to talk about the long term plans of our company and how being associated with us, is going to help build both ATFL and the RDS business.

New RDS Selection Process

In some situations we also need to hire a new RDS. The above process defines the steps we take in appointing a new distributor. Let's see each of these steps in detail below: 

You can hire a new RDS to either open a new town or increase coverage and service levels in an existing territory, or in extreme cases - if the exisiting RDS is not performing well due to integrity, financial or alignment issues. 

Typically we appoint a new RDS for Towns with Population more than 1 Lac or at least 240 outlets. When we have 240 outlets to cover, we should appoint an EDS. 

If there are less than 240 outlets to cover, we consider an MDS. SDS are appointed for covering smaller towns which are not catered to by RDS.

Suitable RDS are identifed through market surveys by observe brand availability, display & range of the companies the RDS works with. Ask retailers about service regularity, behaviour and payment collection. Word of mouth and references from other sales persons are very important. We also need to check their Investment / Infrastructure Capability, Operating Capability and Service Orientation. 

Step 3: Shortlisting

After we have identified a number of RDS, we will shortlist based on whether they have a good FMCG distribution experience, preferably in a brand which demands involvement, high coverage and displays.

 The RDS should believe in and demonstrate coverage capability. 

We want a business partner who has financial stability / strength, has a good reputation / standing in the market and  is a long term player. They should believe in our long term vision and be aligned to it. 

Step 4: Information collection and appointment

Once we have finalised the RDS to go ahead with, we need to populate our back-end by collecting all the background information about the RDS.  

Cross-check against the RDS/SDS appointment checklist which you can find with your RSA. 

What is a Distributor?

  • A businessman who manufactures and sells goods
  • A businessman who only manufactures goods
  • A businessman who buys goods from someone and distributes it into retail outlets
  • A businessman involved in services

The warehouse or godown space that the distributor uses for the business should be definitely owned by him, and cannot be rented. True or False?

  • True
  • False

There are two modes of operation for a distribution – Ready stock unit and ……….?

  • Open unit
  • Outstanding method
  • Ordering unit
  • Order booking

Complete the given formula of calculating ROI (Return on Investment): ROI = (………………….. / Investment) * 100

  • Gross profit
  • Total turnover
  • Net profit
  • Gross margin