Veronique Motte, CPM France CEO discusses Sales Outsourcing in our latest CPM Expert Speak. The obvious choice for some but less well-known to others, sales outsourcing lets brands be more agile and keep ahead of the pack.
To adapt to situations, seasonality and new trends…
The modern consumer is multichannel. Their new needs and new ways of consuming are prompting brands to adapt, revise or even recast their marketing and sales strategies. This is having an impact on the efforts required of their salespeople in the distribution networks. Or rather it should. When a manufacturer’s sales force is given the task of concentrating on the French hypermarket network, it remains focused on the relationships it has built and maintained with each store. These sales representatives, who drive for miles along the roads of France for early morning appointments with department managers, do not have the “bandwidth” to absorb what we in our lingo call a new sales front. So, for a manufacturer who fully intends for its strategy to include the new network that is so popular with consumers, the convenience stores - Carrefour City, Franprix, G20, Intermarché Express, etc. - there is an alternative: the outsourced sales force.
In France, the new “convenience” sector accounts for over 8,500 outlets and 30% of growth in consumer products in 2015, according to Nielsen. In recent years, consumers have been using them with increasing frequency and in response, retailers have increased the number of outlets and thus the number of possible points of contact with these consumers.
In 2014, when French manufacturers were asked about the new challenges facing their sales force in 2016, they cited the improvement in coverage of the new distribution territories - corner shops, drive-thru, etc. When they were asked if they were using or planning to use outsourced sales forces, 55% of them answered “yes!”(PBMO study). The figures published by our French professional association, SORAP, also speak volumes. The outsourced sales force market grew by 9% between 2014 and 2015. Outsourced merchandising grew by 18.5%. This growth phenomenon is expected to continue.
Manufacturers measure the value that outsourced sales or merchandising forces sales teams can create as backup to their employees, by targeting stores that are not visited by them, such as neighbourhood or village mini-marts, but also beachside supermarkets and mountain grocery stores on a more seasonal basis. The importance of the phenomenon transcends our borders, with the same trends being observed in the United Kingdom, Germany and Italy. Outsourcing one’s sales force, or its merchandising or activation – the three main business lines of sales and field marketing agencies – is nothing new. What is new is the discovery of the many opportunities that this offers to brands in the current consumption environment, which many might describe as “complex” or even “confusing”.
… and to try new things, innovate and stay competitive
In order to benefit from a qualified sales team whose activities adapt to the year’s various high points, the brands are ready to team up with partners specialising in sales and field marketing campaigns, and try out new and original, even radical, commercial solutions. Like the outsourced shared sales force: shared between two manufacturers, these sales representatives can better and more efficiently cover a sales front in a more economical manner for each of them. In this case, the external service provider makes the relationship between the two companies much easier: part arbitrator, part advisor, it acts as a genuine facilitator while the brands retain complete freedom in defining their strategies.
Because in 2016, the sharing trend is bigger than ever! This is plain to see in the consumer services sector. On the B to B side of things, start-ups are increasingly taking it on board, with fab labs and co-working spaces. Sharing is thus becoming a true entrepreneurial philosophy that major manufacturers are embracing on their own scale with growing enthusiasm.
Other innovative mechanisms, such as e-merchandising (optimising product visibility on e-commerce or drive-thru sites) or crowdsourcing (data collection micro-tasks assigned to paid private individuals) also complement more traditional sales strategies.
For in addition to our local trends, players from further afield – Amazon, Alibaba, Costco, etc. – these names that are used to proclaim that competition is healthy, are transforming the distribution landscape. The status quo is definitely not an option.