Sales Promotion vs. Trade Marketing; Paying vs. Incentivizing; and the Power of Relationship in Sales

25 Mar

dealer display

As I entered my grocery shop yesterday, I saw what used to be bread and butter (pun intended) for me a couple decade ago – but a sight I hadn’t seen in a while. It was a “merchandiser”/ “sales rep” clicking away at a very nice end cap shelf display – the brand in question was Kelloggs. Clearly this was either a display contest – designed to have participating retailers give up some of their precious shelf space up to a brand in a bid to enhance impulse purchase – the payoff being, like a lottery, the possibility that they win a prize and therefore money and more importantly prestige; or was “bought shelf space”, more the norm, but a fair drag on the brands’ trade marketing/ sales promo expenses.

But that’s not the story – the story was the action of the retailer personnel immediately after the merchandiser type finished clicking – they immediately got down to restoring the end cap to its usual position – this time with some nuts/ dry fruits (depending on where you are reading this ☺ – english is a funny language isn’t it? or maybe american is… )

So, either the Nuts guy had payed more money, but the retailer wanted to participate in the contest; or the retailer was scamming both companies – greedy pig (but hey, he’s not running a business for charity ☺ ); or the nuts guy had payed more money, and the sales rep/ merchandiser had prevailed upon the retailer to “just put up the display so I can show my bosses” (remember, depending on the company’s scheme – he either gets money or prestige too!) . All scenarios are likely, but for a low margin branded product that relies more on the “pull” created by advertising/ branding than the “push” created by the retailer actively promoting its brand, it is probably the last one that is applicable.

Reminded me of my years in trade sales years ago – with Leo Mattel – a joint venture company that sold toys – more a “semi durable” category. So while there was an “impulse” element to purchase sometimes, it was also equally pre meditated sales (say for gifts); and certainly purchase occasions were not too frequent/ replacement cycles were large. I used to tour the Delhi market with a young “sales rep” on my scooter – this guy was BIG – 6 feetish, heavy – and hence my arms and shoulders always ached whenever I took him around. He was also, and I hate to sound prejudiced, but its true, blessed with one of the ugliest faces I’ve ever had the fortune to see. But every retailer that he took me to – had ONLY nice things to say about young Chakrapani – “Ma’am, please do not remove this guy from our sales beat” – basically the guy was SO good at customer service, and the retailers – an admittedly tough breed in new Delhi – found him so endearing in his mannerisms, that as one guy told me – Ma’am, I have to only look at Chakrapani’s face, and I can NOT say no to him ☺. So, Chakrapani would have done what my Kellogg’s sales rep in M.K Ahmed was doing – but he would have prevailed upon the retailer to keep the display on for longer. Sorely on the basis of his relationship!

Having said that, in an impulse purchase item, its not really a bad thing to have a front display for even a few minutes – atleast for those few minutes, the brand has grabbed eye balls! Its like when a regional sales manager in the then Gillette told the then CEO as he complimented the sales team on an excellent field visit, “but you do know that these have all been window dressed for your arrival, right?” Pradeep gave a hearty guffaw and said – yes of course, but for the 2 – 3 days that this window dressing is up, more people will tend to buy our products than they would have otherwise! And true enough, even in the less than half hour that I saw action on the Kellogg’s display, 3 ladies were fingering the K for Kelloggs boxes, and I saw atleast 2 sales being made right in front of me at the checkout!

So, yes, the relationship is very important in sales, the money tradeoff while important will not ensure action necessarily – after all, the next brand may come in and offer more money! A sales guy needs to be building those relationships at all points. This is true whether you are selling Kelloggs and Razors, or Engineering services and tech products –

As Vrinda, one of our sales people in EmPower told me, the true test of my rolodex is if when I leave this company and go to another, I can call every name here and ask them to try my new product/ services, and they will say yes! (the equivalent in the FMCG world is Balbir, a rambunctious sales guy telling me – you are truly a powerful sales manager if every retailer on your field trip greets you with cashews ☺ – nuts anyone?

For a POV on the “other side” of the coin – the dealer salesman, read this old article of mine here

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2 Responses to “Sales Promotion vs. Trade Marketing; Paying vs. Incentivizing; and the Power of Relationship in Sales”

  1. Sales Promotion July 23, 2013 at 8:12 pm #

    Beautiful insights on sales promotion.

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