joint business planing process findings & recommendations - cmg

Copyright Channel Marketing Group, 20169/8/2016, page 1

Industry Webinar


David Gordon Victoria Gustafson

President, ChannelMarketing Group

Partner, Business EvolutionVerde Associates

Channel Marketing Strategist Distributor Growth Initiator

Growth Expert | Data Strategist | Thought Leader


Executive Summary

Detailed Findings

Improvement Considerations

Parting Thoughts

1

2

3

4


Executive Summary

Detailed Findings

Desired Process

Parting Thoughts

1

2

3

4


Joint Opportunities

Identification

Prioritization

Planning

Execution

ManufacturersInternal goals

Business Intelligence

MarketRegion

Customer

DistributorsInternal goals

3 – 4% increase in growth vs. non-

participants*

*Source: IRI research in Consumer Packaged Goods (CPG)

1


36%

45%

50%

Manufacturers Distributors

Satisfaction with Current JBP Process

Dissatisfied Somewhat Dissatisfied

MANUFACTURERS DISTRIBUTORSRATING DRIVERS RATING DRIVERS

• Acknowledged need

• Process does take place

• Little focus

• Spotty execution

• Inconsistent measurement

• No accountability for results

• Ignoring needs of end customers

• No review/course correction

• Strong vendors demand planning

• Pursue strategic and tactical alignment

• Lack of tracking of results

• No periodical reviews to identify course correction opportunities

• Missing the big picture of where the market is moving

Q: How satisfied are you with your current Joint Business Planning process?

1


Define time horizon,

agenda and participants

Research to identify mutual

opportunities

Establish mutual

objectives

Develop action plan

Implement action plan

Measure and review results

1 2 3 4 5 6

1

ASSESSMENT RESULTS

CURRENT PROCESS

Process adjustment

7


1. Topics covered by JBP◦ Focus on Value-Add Issues◦ Broaden Customer needs discussions◦ Extend Time Horizon

2. Quality and granularity of market research used to generate insights

◦ Regional and trading area-level insights◦ End-Customer Research

3. Value received from the process◦ Meaningful and actionable outcomes◦ Minimize efforts/maximize results

4. JPB effectiveness◦ Implementation in the field◦ Periodic measurement and accountability

1


Executive Summary

Detailed Findings

Desired Process

Parting Thoughts

1

2

3

4


Mfg59%

Dist18%

Mktg Group Req

23%

Planning Process Initiation

Q: Who usually initiates the Joint Business Planning process?

24%

53%

24%

0%

1-6 Months 6-12 Months 1-2 Years 2+ Years

Planning Time Horizon

Q: What time horizon do you usually discuss during a typical Joint Business Planning session?

2


DISTRIBUTORS

• Setting long-term joint sales/revenue objectives

• Increasing operational process efficiency

• Profit improvement

• Joint staffing/funding

• New service revenue initiatives

• Geographic expansion

• Line authorization for additional/new branches

MANUFACTURERS

• New product offering/product diversification

• Alignment with distributors

• Growth targets

• Setting long-term market share goals

• Long-term product roadmaps

• Setting long-term market share goals

2

Som

etim

esO

ften

Rar

ely

Q: Which of your company’s strategic objectives do you discuss with your partners?


• Sales/customer training

• Target customers

• Line conversions

• New product launches

• Promotions

2Som

etim

esO

ften

Rar

ely

Q: What tactical objectives do you discuss with your manufacturing partners during your Joint Business Planning Session(s)?

• Inventory levels

• Marketing funding support/co-op usage

• Renewing Special Pricing Allowances (SPAs)

• Inventory adjustments

• In-stock product price negotiations

• Rebate opportunities

• Return policies

JOINT DISCUSSIONS

Customer Outreach

Profitability


56%

18%

24%

2%

Should a plan be required to participate in a rebate program?

Yes No Only set a purchase goal Not involved in this area

2


MANUFACTURERS DISTRIBUTORS

Nev

erSom

etim

esO

ften

• Regional/District Manager

• Rep Principal

• Rep Salesperson

• National Account Manager

• Sales Director/VP

• Marketing Director/VP

• Sales Management

• Distributor Owner

• Marketing Management

• Purchasing Management

• Operations/Supply Chain

Q: Who typically participates in more than 50% of all JPB meetings as a representative from your company?

2

Meeting Participants


•Product trends•Pricing trends•Product sales analysis

•Customer segment dynamics

•Contractor purchasing behavior

•Industrial trends•Residential trends•Institutional trends•Competitive insights

•Macroeconomic trends

TOTAL MARKET INDUSTRY

POINT OF SALECUSTOMER

Q: Which of the following factors do you incorporate to build Joint Business Plans with your partners?

Types of Research Incorporated into Joint Business Planning

2



0%

57%

29%

14%

20%

80%

0%

0%

Dissatisfied

Somewhat Satisfied

Satisfied

Very Satisfied

Q: How satisfied with the quality and granularity of research that [Manufacturers] share and include into plans?

Satisfaction with Research Used for

JBP meetings

2



• DISC• Dodge Report• Aggregated Point of Sale

LEVERAGED

• Electrical Wholesaling Market Planning Guide

• Internal Data

RARELY/NEVER LEVERAGED• Customer Research

• Focus Groups• Surveys

• Industrial Info Resources (IIR)• Epicor Vista Information Services• MDM Analytics• Marketing Group Info (A-D, Imark, etc)

• NAED (Economic Newsletter, State of the Industry Report)

• Collected Feedback from Customer Service Calls

• Census Bureau Data• Aggregated In-Field Intelligence• Market-level Trends• Electrical Trends Newsletter• IBIS World• tED Magazine

Q: What industry sources do you use to build Joint Business Plans with your partners?

2


MANUFACTURERS

• Sales and Share Goals

• Customer Strategies

• Strategic Objectives Alignment

DISTRIBUTORS

• Sales and Share Goals

• Customer Training and Events

• Strategic Objectives Alignment

Q: Please choose top 3 areas that drive the most value for you in the Joint planning process with your partners. Consider what are

the indicators that will drive your overall success

2

Current Focus Opportunity

• Short-term• Tactical

• Long-term• Strategic


Return policies

Marketing funding support / co-op…

Inventory adjustments

Into-stock product price…

Rebate opportunities

Promotions

Inventory levels

Renewing Special Pricing…

New product launches

Target customers

Sales/Customer training

Line conversions

Distributor Manufacturer

More important to

Manufacturers

More important to Distributors

2


2

• Joint staffing/role funding

• New service revenue initiatives

• Sales goals• Setting long-term

market share goals• Target customer

opportunities

SALES Only

• Product content for website

• Product mix goals

MARKETING Only PRODUCT/PURCH Only

• Long-term product roadmaps

• New product offerings/ product diversification

• Pricing levels


ISSUE SALES MKTG PRODUCT/ PURCH SERVICE OPS

Authorization to sell to additional/new branches x x

Customer segment focus x x

Customer training and events x x x

End-customer strategies x x

Geographic expansion x x

Line conversion opportunities x x

Market research – industry trends x x

Market research – local trends x x

Market research – macro trends x x

On-shelf assortment x x

Product training x x x

Promotions x x xRenewing Special Pricing Allowances (SPA) x x

Strategic objectives alignment (12+ months) x x x x x

Unmet contractor needs x x x x

Increasing operational process efficiency x x

Inventory review / management x x

Management of returns x x

Quality and timeliness of shipping x x

Volume rebate program (if applicable) x x

2


0%

64%

36%

0%

Ineffective

Somewhateffective

Effective

Very effective

Perceived Effectiveness of In-Field Implementation

Q: How effective, defined as ‘achieving goals set during Joint Business Planning’, is the in-field implementation process?

RATING DRIVERS

• It works if it is done correctly and measured consistently

• Follow through and periodic reviews make it work

• Not effective in all markets

• Highly dependent on distributor and manufacturer engagement

• Needs follow-through and accountability

• Negative experience with results

• Lack of focus

2


Monthly82%

Quarterly18%

Internal Results Measurement and Review

Monthly27%

Quarterly55%

Semi-Annually

18%

External Results Measurement and Review

Q: How often do you measure and jointly review results with your own sales force?

Q: How often do you measure and jointly review results with your partners?

2


2

71%

50%

Manufacturers

Distributors

% Companies That Would Consider Process Change for

2017

DESIRED CHANGES

• More transparency about competition and market dynamics

• More pro-active

• More granular information sharing

• Make the process valuable, or eliminate it

• Implement periodic reviews

• Get more buy-in from parties

• More thorough preparation

• More efficient

• Better tools

• Meaningful metrics

• Build in tracking and accountability

• Focus on most valuable opportunitiesQ: Would your organization consider

changing JBP for 2017 planning cycle?


Executive Summary

Detailed Findings

Improvement Considerations

Parting Thoughts

1

2

3

4





opportunities

Establish mutual

objectives

Develop action plan



1 2 3 4 5 6

3

REVISED PROCESS

RECOMMENDATIONS

• Select partners to plan with

• Have a very well-defined set of objectives, by distributor!

• Invite participants from both planning and execution sides

• Discuss both strategic (1+ years) and tactical (<1 year) goals

• Agenda could vary from partner to partner, depending on current situation and relationship objectives

• Consider tiered planning process





opportunities

Establish mutual

objectives

Develop action plan



1 2 3 4 5 6

3

REVISED PROCESS

RECOMMENDATIONS

• Pre-meeting preparation & sharing

• Understand market size & market share• Distributor for territory

• Manufacturer for category, segments

• SKU Analysis (pricing, assortment)

• Distributors• Research potential by customer, including

market share

• Sales by customer by product category

• Manufacturers• Use research to create a purpose-driven

distribution strategy vs. availability

• Gain insights into end-Customer to uncover growth opportunities

• Fully leverage industry sources to create competitive offense / defense strategy

• Customer/Sales Person/Product Mix





opportunities

Establish mutual

objectives

Develop action plan



1 2 3 4 5 6

3

REVISED PROCESS

RECOMMENDATIONS

• Use the meeting to:

• Get on the same page

• Discuss joint growth opportunities

• Gain agreement on the mutual high level plan of action to capture these opportunities

• Use the meeting to (cont’d):

• Get all tactical issues on the table

• Agree on approaches to address them

• Agree on the criteria by which you measure success for the coming year (high level)

• Assign responsibilities





opportunities

Establish mutual

objectives

Develop action plan



1 2 3 4 5 6

3

REVISED PROCESS

RECOMMENDATIONS

• Once all mutual opportunities are prioritized, build a plan that:

• Breaks down big objective into relevant, achievable and measurable chunks

• Set a metric for each important milestone

• Assign accountability

• Communicate with your partners:

• Milestones and success factors for each milestone

• Dependencies (internal and external)

• Additional resources/time that might be needed to achieve objectives





opportunities

Establish mutual

objectives

Develop action plan



1 2 3 4 5 6

3

REVISED PROCESS

RECOMMENDATIONS

• Communicate objectives:

• Use the RACI (Responsible, Accountable, Consulted and Informed) tool for every important milestone

• Ensure that everybody who has accountability clearly understands what to do

• Create a problem escalation process (both internal and with your partners) in case there are obstacles that could prevent reaching milestone(s)

• Ensure that every person responsible for execution of the plan is equipped to do so (do they have the right tools and resources? What support do they need?)

• Develop/utilize accountability tool





opportunities

Establish mutual

objectives

Develop action plan



1 2 3 4 5 6

3

REVISED PROCESS

• Measure and review results as dictated by business need, not necessarily on a rigid schedule (to prevent under- and over- measurement)

• Create a process to effectively course-correct if market conditions change

• Push performance benchmarks

• Get all relevant parties in the room to review results (might be different from the original group who put the plan together)

• Celebrate successes and learn from failures


Executive Summary

Detailed Findings

Desired Process

Parting Thoughts

1

2

3

4


Commit to extract value from planning It’s a revenue driver, not an obligation No accountability = no value Hope is not a viable rebate achievement tactic

Come prepared Determine if meeting objective is revenue generation or profit

improvement (or what % each) Differentiator and Reputation Builder Engage at appropriate levels & drive communications downstream Remember: data identifies, quantifies and prioritizes opportunities.

Discussion determines if there is a desire to pursue them If action plans don’t include accountability, it becomes “just another

meeting” Consider selective and customized planning approach Planning must be important to management and management

driven, otherwise poorly executed and a time waster


Questions?


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joint business planing process findings & recommendations - cmg

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