Today’s digital era has brought about a sea change in an operator’s business. There is little doubt that technology and the internet have opened up new distribution channels. Data driven insights have reshaped traditional sales channels and methods. Last, but certainly not the least, operators have to contend with multichannel networks.
In a nutshell, all these factors have, understandably enough, brought about a sea change in an operator’s sales and distribution strategy too.
But, the question remains-how does one define a successful strategy for channel, sales, partner and commission management?
For all intents and purposes, the basic idea ought to be maintaining a balance between selling the right product at the right time through an appropriate combination of channels. That coupled with the process of modernizing existing sales and distribution systems, of course. The key areas where this can be implemented include:
Blurring of Channel Boundaries
In traditional selling methods, each sales channel had a different set of partners and were used to push an overlapping but distinct set of products. Now, in the era of digitization, non-direct channels have a dual role to play-perform set functions while catering to new demands. This is because customers are expected to increasingly interact with the operator through their own self-service channels.
From a sales viewpoint, the operator must ensure product availability at the self-service point of sale. Conversely, non-direct channels will have to widen their scope beyond selling voice and basic-data related products. These channels will now have to become device collection points and function as extended customer service endpoints. Simply put, non-direct channels will function more like direct channels.
Shrinking of Partner Hierarchies
Operators are increasingly inking partnerships with various suppliers, who are directly involved in fulfilling requests for new services, as opposed to merely forwarding them. The end aim is to deliver new devices in person to subscribers. The role of the partners has to change to entail receiving devices from various third-party providers, bundle these devices as per the operator’s plans and upsell. Thus, a disruption in the distribution chain is on the cards. A product-specific relationship between suppliers, resellers and retailers will be established. The idea is to ensure that any distributor can supply a specific product to any retailer.
Management of Territory and Sales Key Performance Indicators
There is little doubt that digitization has brought about a change in both channel and partner structures. Likewise, measuring sales on the basis of territory will also have to be re-hauled. Traditional sales-centric key performance indicators measure gross-adds; product-based revenues and device sales by revenues and by volumes. These are measured to specifically match the territories where the sale actually occurs.
Systems that do not support gathering of data pertaining to sales though digital channels will not be able to cater to future requirements. Sales and distribution systems will have to define new logical territorial boundaries that overlay physical territories for digital distribution separately. Of course, in some cases, completely eliminate dependency on traditional methods of defining the term “territory”.
Products and Services
Traditionally, operators focused on providing voice and data-centric products and plans. In the era of digitization, the biggest change will be the proliferation of products produced by an operator’s partners. Essentially, the number of resellers who only focus on one category of telecom products will reduce significantly. This will profoundly impact the method of framing eligibility rules pertaining to product availability for various partners.
Real-Time Tracking of Feet on The Street Management
The era of digitization simplifies management of an operator’s feet on the street structure. Simply put, operators are able to obtain the exact location of the field representative-including information on whether they actually visited the site or not. That apart, data pertaining to the market can be accessed in real-time, as can automatic calculation of expenses and orders. Operators can also identify the most optimal routes for the representatives, depending on the level of inventory available at various locations.
Inventory Planning and Distribution
Digitization of sales and distribution channels facilitates streamlined planning and distribution of inventory. Prior to this, operators had no visibility about how much inventory was available at various locations. All data pertaining to sales and stock availability was sourced from the relevant distributor. In the era of digitization, operators are able to obtain a holistic picture of stock availability in real-time. These players are also able to track sales and movement of inventory and reassign the same as deemed fit.
Warranty Management
Digitization enables operators to trace in real-time when stock was sold and with what type of warranty. Moreover, these players would also be able to identify whether a particular product still falls within the defined warranty period or not.
Geo-Fencing
Operators are able to identify how many sales representatives and customers are present in a particular location. Moreover, other important factors, such as the competition level at a particular location, et all, can also be easily viewed in real-time.
Inventory Planning and Distribution
Digitization of sales and distribution channels facilitates streamlined planning and distribution of inventory. Prior to this, operators had no visibility about how much inventory was available at various locations. All data pertaining to sales and stock availability was sourced from the relevant distributor. In the era of digitization, operators are able to obtain a holistic picture of stock availability in real-time. These players are also able to track sales and movement of inventory and reassign the same as deemed fit.
Warranty Management
Digitization enables operators to trace in real-time when stock was sold and with what type of warranty. Moreover, these players would also be able to identify whether a particular product still falls within the defined warranty period or not.
Geo-Fencing
Operators are able to identify how many sales representatives and customers are present in a particular location. Moreover, other important factors, such as the competition level at a particular location, et all, can also be easily viewed in real-time.
Incentivizing the Retailer
Operators are able to offer incentives to their retailers, to ensure that the latter promotes their products. These may range from discounts to bonuses.
Key Challenges While Implementing an Effective Sales and Distribution Strategy
Of course, transforming existing sales and distribution channels is easier said than done. A key factor for operators is to ensure complete transparency in the entire sales and distribution ecosystem until the last mile. Operators are likely to face a cash crunch if an end-to-end view of the sales and distribution channel is absent.
Meanwhile, other factors hindering the implementation of an effective sales and distribution system include:
- High value transactions being executed on credit sales
- Payouts taking place on commissions which, are bound by complex sales targets and customer retention rules
- Unrealized inventory with fast expiring supplier warranties In sum, to keep up with the rapid pace of digitization, an operator’s sales and distribution network ought to:
- Simplify management of sales and channels
- Enhance the existing supply chain
- Manage the existing field force
- Minimize inventory losse
