India has, since independence, largely been a supply-driven economy, leading to shortages and constraints that often had buyers queuing up. From phones to gas connections to even privately produced Bajaj scooters, everything has had a long ‘waiting period’. As such, sales was and even today remains, a largely undervalued skill. Liberalisation has helped some sectors of the economy break these shackles and indulge in actively selling their products ” like the mobile phone companies and telecom players. However, large swathes of the economic activity still remain bereft of the need to sell at all.
The FMCG sector is no exception to this. Most FMCG firms have a huge advertising and promotion budget. The consumer buys ‘brands’ created by the financial muscle of these corporations, reducing the need for active selling. Advertising, for the most part, creates awareness, generates trials and premium product quality ensures repeat purchase. This model is fine for an economy growing at a rate of 8%, but when the growth momentum subsides, this model is severely tested. In tough macro environments, marketing budgets are constrained, promotions cannot run for long periods, and as a result, sales momentum also turns sluggish.
It is in these very times that grassroots capability can make a difference. Ask any FMCG retailer who he thinks the face of the company is and the answer invariably is the familiar ‘grassroots’ salesman. Investment in the capability of these salesmen ensures that strategic plans drawn up in FMCG boardrooms come to life in the market. Whether it is launching new categories or brands, distributing new line/brand extensions or getting the right visibility and in-store presence, the frontline salesperson plays an invaluable role. His capability in executing the strategy is the real competitive advantage for FMCG companies.
Companies like Eureka Forbes recognize this fact and have built their model entirely on the capability of their frontline sellers. Few people in urban India could claim to have escaped the attention of a Eureka Forbes salesman ” it has an 8,000-strong direct sales force across 550 cities and towns. Its meticulous training system for direct sales has made it an iconic brand. On the other hand, most FMCG companies concentrate on training only the TSIs (Territory Sales In-charge) and TLs (Team Lead) in the hope that this training will trickle down to frontline salespersons, which seldom happens. Those companies that do have a training program for frontline staff, often face the following issues:1.Lack of Consistency: A lot of FMCG companies especially the Tier 1 players like HUL, P&G, Nestle, and Marico do have dedicated sales trainers. Workshops take them right down to grassroots salespeople operating at the distributors’ end. However, their low frequency (typically conducted annually) coupled with the lack of follow-up on the application of material taught, makes them ineffective. 2.Absence of Hardcore Sales Training: The current training material has more to do with product knowledge, new launches and competitors. The training never gears these people to understand that selling begins when the customer says “NO”. In fact, by spending huge sums on back-to-back trade schemes and promotions, most FMCG firms create an environment where salespeople never hear a “NO”. Since they are sailing in smooth seas for the most part, they never become skilled sailors ie. master salesmen. Developing capability is about teaching people ‘hardcore selling’ skills and also giving them an environment in which to practice those skills. Without periodic and adequate practice, these skills will atrophy. 3.Quality of Frontline Salespeople: One of the big roadblocks faced while developing capability is the quality of people who come in as grassroots salesmen. A majority of them are not college educated, as selling is never a career option for fresh graduates. The reason for this is the low basic salary, which is approximately below Rs. 5000 in most cities. Most firms do not push for an increase in this amount and leave it completely to the discretion of their distributors. Given the increase in the cost of living in the last few years, these salaries have now become completely inadequate. As a result, only high school graduates with no better career options at their disposal, select FMCG sales as a profession. 4.Low Willingness to Learn: Last but not the least, grassroots salespeople display low willingness to learn. This can be ascribed to the fact that they do not see this learning as something that will help them move up the organisational ladder through job promotions. Most FMCG firms hire fresh MBAs from bottom tier institutes as TSIs or TLs. They spend a fortune on training these new hires and getting them ready for work, completely overlooking the best frontline salespeople for these higher positions.
The following interventions can immediately be made to address the barriers to capability development at the grassroots:1.Structure of the Training department: Training departments need to be manned and controlled in a way that supports consistent classroom training as well as on-the-job follow-ups with frontline trainees. In the absence of this infrastructure, the concept cannot be made to work. 2.Practice Environment: While most trade schemes are compulsions due to the competitive nature of the FMCG market, there are times when reliance on trade offers and consumer promotions can be minimised. It is during these phases that the frontline salespeople will get to practice their selling skills. 3.Rationalisation of Salary: To get a minimum level of quality in frontline salespeople, entry level salaries need to be mandated by FMCG companies to their distributors. Preferably only graduates should be hired, so that it is possible to scale up their capabilities via training. 4.Scope for Job Promotions: Unless there is scope for promotion, the high performers among the frontline salespeople will never stay on. After spending a couple of years, they will look at other job opportunities. Since they have a grasp of company processes and are also adept at managing trade relations, at least the top 10% must be absorbed at TSI and TL levels.
Investing in such capability development at the grassroots can secure a lot of advantages for FMCG firms. The first and the most important benefit lies in better execution of the sales strategy, translating into direct increase in value/volume sales. For every training rupee saved per person, promotion and trade scheme costs are incurred for every unit of the product sold. Better training can thus enable the company to do more with lesser spends.
Capability building at the grassroots is a strategic choice and in this author’s opinion a wise investment. It takes care of the brand at the very last mile where the best laid plans often fail due to poor execution. However, a genuine commitment to consistent development of capability requires a lot of hard work, patience and grit to follow through. If executed well, this can create enduring competitive advantage.
Vivek Golcha is an alum of the prestigious St. Xaviers’ College, Kolkata and IIM, Ahmedabad. He presently heads three companies namely Quency Consultancy Pvt. Ltd., SLS Telecom and B.G. Distributors Pvt. Ltd., an associate of Procter & Gamble. He has also worked with Nestle India in the past.