How to Double Sales in Five Years
A revamped sales system—distributors as partners, better product placement in stores, and incentivizing the sales force—proved to be the key to success.
A major international food manufacturer operating in Russia had enjoyed robust sales growth over the last decade. But it wanted to find the next s-curve and set a challenging aspiration: to double sales in just five years. Burk was asked to help create a sales strategy capable of meeting this goal.
From the start, it was clear that every aspect of the company’s sales strategy and operations would need to be scrutinized. Working with management, the Burk team defined three broad areas for investigation. The first area of focus was the effectiveness of the company’s distributor network in Russia and how these relationships were managed, including how distributors were selected and terms of business set. The second area was product mix, measued by overall sales and placement in stores. The third area was the organization of the sales department, including its mission, roles and responsibilities, and motivation of sales employees.
The Burk team started by looking at the client’s business practices and assessing existing capabilities and potential. Employees were interviewed at all levels, from the sales force to the company's leadership. Burk experts in retail, sales, and distribution joined the effort.
To get a clear picture of distributer relations, the team analyzed the terms of business with each distributor in depth, including the nature of existing agreements, distributor remuneration, our client’s desire to continue to work with the distributor, and possible alternatives. The results showed that the client had clear opportunities to reconsider its terms with some distributors and to search for alternatives in other cases. The guiding principle was that distributors should not simply be contractors, but rather business partners with a stake in the growth of the company. Moreover, distributor-partners should have the commercial, technical, and infrastructure capabilities to grow in line with the company. If sales were going to double, distributors would need to have sufficient warehouse space, trucks, and other capabilities to keep pace.
With regard to products, the team benchmarked stores, examined store layouts, and analyzed how store layout and product placement influenced sales. Our client’s sales managers were then trained to conduct their own assessments of product placement in stores, giving them the tools to quickly determine where products should be placed in stores and at which level on shelves, as well as the effectiveness of point-of-sale (POS) materials. The Burk team also segmented all POS materials in Russia to assess their potential. This showed the client the location of stores selling its products and those with the greatest sales growth potential.
Restructuring the sales department involved revising its organization as well as redistributing the roles and responsibilities of managers. The team also recommended a new incentives scheme with criteria more closely aligned with the company’s overall strategic goals and objectives. For example, under the new scheme sales managers were incentivized to promote best-practice in-store design, as this was now a focus of the company.
The first pilot project launched in Moscow, with a roll-out across Russia to follow. In the first two months of the pilot, our client exceeded all its targets, and its ambition to double sales looked feasible. The Burk team worked side by side with the client employees for four months, ensuring that a new development department to carry out the strategy was in place, headed by a top manager—the former head of regional sales who launched the project with the Burk team.