Demystifying Unproductive Calls in Indian FMCG

Call or more precisely a Sales Call in the Indian FMCG lingo is when a Sales frontliner (either sales executive, officer, distributor’s salesman or a territory sales incharge) visits a retail shop (either adhoc or as part of his beat plan) and interacts with the shop representative (either shop owner, family member or a support staff) with the overall objective of initiating or maintaining a Selling relationship with that retailer on behalf of the company and the local distributor.

FMCG sales call is very different from other industries because of the unorganised nature of majority of retail outlets and limited space and time which the store owner allocates to a Sales frontliner especially from a tier-2 or tier-3 brand.

First difference to acknowledge is that a FMCG sales call is completed in a matter of minutes unlike other industries where each step of a sales call happens at different time intervals after achieving certain milestones at each step. Having said that, the duration of a FMCG sales call (lets assume 10 minutes) can be segregated into these pseudo conversational or behavioural milestones which when understood and adopted can help Indian companies improve their sales conversion ratio. Please note the below milestones represent an ideal scenario however in the market, they may not happen sequentially and one or more step may be skipped altogether:

1. Greeting (upto 1 minute): A genuinely warm and happy greeting goes a long way in acquiring or sustaining business from a retail outlet. Mind you, the greeting is not just for the store owner, but anyone who is part of the store (owners family, support staff or neighbouring shop owner sitting temporarily). Human mind remembers emotional gestures, more so when its predictable. Which means a salesman visiting a retail shop every Wednesday between 11-12pm and saying “Hello Gupta ji, how are you doing today. Remember me, I am from XX company, here to check if you need to order something or require any help from my side?”.
2. Assessment (1-2 minutes): Once a greeting gives a salesman a foot-in-the-door, the next step is assessing the nature and size of a potential sale. This is typically done by asking the shop representative or having a glance at the shelves of specific product category (say biscuits). With years of training, a sales representative of a FMCG company identifies which products can be pitched and in what quantity. A mature salesman also asks few directed questions to the shop representative to validate the assessment “Gupta ji, bourbon seems to be moving from shelves pretty fast, demand from kids & households due to schooling-from-home?”
3. Pitch (1-2 minutes): Once assessed, a salesman goes face-to-face with the shop representative, with full attention pitches the company’s products as part of a three-pronged strategy – products that retailer needs (demand strategy), products that are fast moving in retailer’s micro-market (fear of losing strategy), and products that are beneficial for the salesman and the brand (push strategy).
4. Negotiations (upto 5 minutes): Benefit of the three-pronged approach is that the scope of negotiation reduces to only the third approach i.e. push sales, for which the salesman is already equipped with trade schemes and other incentives.
5. Ordering (upto 5 minutes): A smart salesman keeps noting an order while steps 3 and 4 are taking place. This was traditionally done on a diary which required few minutes for doing the calculations (multiplication, subtraction and addition) whereas now FMCG order taking happens of a mobile salesforce automation platform like Peri that makes sure entire ordering in done is less than couple of minutes.
6. Commitment: While finishing an order the salesman confirms that the goods shall be supplied from a nearby supply point (a sub-distributor, distributor, stockiest or company depot) by a certain date (typically the next day) and gives out a order confirmation document to the retailer (Peri offers a nicely formatted order pdf). This is a commitment by a company representative and a responsible salesman ensure that he communicates the same to the supply point and follows up on the delivery date.
7. Follow-up: The follow up of an order consists of checking the delivery status, bill value (to ensure retailer is satisfied) and collection (to ensure supplier gets the cash flow for future reordering).

A productive FMCG sales call is one where a salesperson executes all or some of the first 4 steps, and it leads to a retailer placing a definitive order to a supply point via this salesman. Now there are certain interesting nuances to this practice which should be kept in mind which considering a sales call as productive:

• Order should have handful of SKU’s not just one or two
• Order should not be manipulated (for eg split across 2 weeks to ensure increase in productive calls)
• Order should finally be delivered to retailer and not cancelled
• Order could be repetitive but should show a change in SKU mix overtime

Peri CRM encourages FMCG companies to utilise 3 unique features on its Salesforce automation platform to ensure productive calls are validated:

1. Month-end Physical Stock Taking: Till the time a FMCG company does not deploy a DMS (Distributor Management System) Peri recommends using our Stock management feature where a Salesman checks physical stock at the supply point (either through phone or by visiting) and enters onto Peri which then goes for approval to a sales manager. This process results in a reported Secondary sales and a derived secondary sales which should have a variance of ~10% otherwise its a red flag on the quality of productive calls.
2. Distributor Management System (DMS): The ideal way to validate productive calls in FMCG is to give supply points an easy-to-use, cloud-based DMS like Peri CRM which is also integrated with the company’s ERP software. And put strict processes where a distributor must collect the orders throughout the day, commits inventory by day-end or next half-day and register dispatch of goods as soon as his van leaves the supply point. A DMS has multiple benefits for all stakeholders in a company’s supply chain.
3. Order audits: Last and perhaps an old school way of ensure productive call discipline is through random order audits done at periodic intervals, across different beats to check for any misuse of productive calls.

An Unproductive FMCG Sales call is one where a salesman executes steps 1 (greeting) and 2 (assessment) and derives a conclusion that the retailer is not in need of goods at this stage due to a multitude of reasons talked about earlier. A mature salesman shares this assessment with honesty to the retailer and happily, proudly walks out of the store. Because he knows that push sale will neither help the retailer nor the company, although he might get a short-term boost in this productive calls which is not sustainable. Another type of unproductive call is when Salesman’s assessment (Step 2) tells that retailer could buy a certain quantity of goods, he makes the pitch (Step 3) but fails to convince the retailer the retailer to place an order or fails in the negotiations. In the next section, we will analyse the top reasons for this failure and share ideas of what can be done.

Now that we know the “when” and “how” of unproductive calls, and their importance for Indian FMCG companies, let us deep-dive into the “Why” or the top reasons behind a retailer saying “NO” to a salesman even after going through all the right sales steps:

As an automation partner to Indian FMCG companies, Peri CRM wants to stress the importance of tracking unproductive calls through an intelligent, minimal data-entry, non-penalising data entry method which the frontliners enjoy and fill with a high degree of honesty rather than a mere formality or compliance for the reporting managers. Give us a call to understand Peri’s Checkin and Order taking modules.