Insights

How to convince your distributors to adopt Distributor Management System?

In one of our earlier articles (Link) we discussed in details why a Distributor Management System is must for an Indian FMCG company irrespective of its business volume. While for a large player, an automation of distributor operations would help in cementing its position, a budding company would find it as a useful ammunition to achieve the desired growth. However, we also briefly mentioned in that article that a DMS implementation is not a very easy task and could meet with many challenges which, if not handled properly, could lead to eventual failure of the entire implementation. And we all know what it means if an IT initiative fails in any organization. It’s not just about the money spent or wastage of time invested by senior leadership, in most of the cases such failures trigger a blame game within the organization which probably drains more energy out of the entire team for nothing.

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Why Distributor Management System is must for an Indian FMCG company?

The fast-moving consumer goods (FMCG) segment in India is already the fourth largest sector of the Indian economy. While the last fiscal year saw a decent 11% growth in this sector, according to IBEF reports, the sector is poised to grow at 27% CAGR for next few years. What is more interesting is that the regional / small players and the rural India is going to be the two most important growth drivers for this industry. According to retail sales data of the FMCG sector provided by market researcher firm Nielsen, while the top 50 firms contributed to 60% of revenue in the calendar year 2018 with a healthy 10.6% growth, the smaller companies grew by a much higher 18.5%. What’s more interesting is that the growth difference is having a rising trend in four successive quarters. On the other hand, increase in disposable income in rural India, introduction of food security bill, direct cash transfer subsidy and other policy supports, rural India is already contributing to 45% of overall FMCG revenue and this figure is only going to move northwards.

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Leveraging SFA beyond Sales Management

Sales Force Automation solutions, initially pioneered by a few large FMCG companies, have now caught the imagination of a large number of small and medium enterprises across industries. The adoption of Sales Force Automation (SFA) solutions is now faster than ever before. Along this journey, more and more SFA solution providers have entered the market. Sales Force Automation itself has evolved and expanded into quite a wide topic – with different use cases and many different possibilities. Accordingly, now, the large number of SFA players in the market are generally equipped with some of the many different things that an SFA solution can possibly offer. Despite SFA entering this new realm of possibilities that look to maximize how it can benefit team productivity and the company in general, large number of companies are still confined to a very traditional and narrow use case of SFA – attendance and sales management.

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Technical Evaluation to be Performed before Finalizing any Sales Force Automation Solution

Importance of a Sales Force Automation solution in any sales organization is no longer a topic to be debated on. It is now a part of basic hygiene of the sales process across the globe. Those who are already using some SFA solution are either driving improvements in the existing software or looking out for a more capable solution. And those, who are yet to roll-out such a solution, are surely hunting for a sophisticated software that can fulfill all their needs. Whatever may be the case, a proper and detailed due diligence must be done before you finalize any vendor. While it is understandable that in SaaS model switching cost is not too high, but we also need to consider the effort and time spent by top management in finalizing a solution and subsequently driving the adoption. Keeping in mind all these factors, it makes complete sense to do a thorough review of the capabilities of your shortlisted vendors.

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Building an SFA Success Story Block by Block

 If you are an FMCG company, chances are that you have already experimented with a sales force automation solution or are actively considering going down that route. After all, the FMCG sector has been a pioneer in adopting sales force automation solution, and consequently, the SFA players have also adapted their products to cater to most of the standard FMCG use cases and scenarios. You may also be aware that more than 50% SFA implementations fail. While there are several reasons that can be attributed to this failure, some of the more prominent ones are lack of clarity on why SFA is required, absence of a skilled program coordinator, poor training and support, and at times, an over-zealous management!

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