Tomasz Makaruk

Success story. FMCG. PLN 35 million on additional sales every year. For 7 years now

The time of the pandemic and the accompanying social distancing phenomenon resulted in work moving from offices to our flats and houses.
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Looking at what can be seen behind the majority of interlocutors who turn on the camera and have not yet mastered the art of blurring the background – usually in the living room or the kitchen. As we no longer have to commute to workplaces, can save time for parking, going out for lunch and as the time efficiency of online meetings has increased at the expense of stationary ones, and also thanks to taming a number of other factors that used to reduce our operational efficiency – we have more time to work and for ourselves.

Increasingly, the issue of work-life balance has been considered from the perspective of life-work balance, bearing in mind that the closeness to our nearest and dearest, which under normal conditions was in deficit, is now in surplus. I personally spend my surplus time on participating in selected webinars and a number of consultations, aiming to increase i360’s ability to generate even better business results for its Clients.

One feedback item I received last week was an encouragement to post on the blog a description of specific case studies of incentive programmes implemented by i360 in order to highlight the specific benefits of implementing such activities in the organization. Appreciating the good advice, it is time to move on to action with proper data anonymisation, so as not to violate any business secrets.

A case study taken from i360’s everyday practice. An incentive programme implemented via the traditional trade channel over a period of 7 years, i.e., from 2014 continuously to the present day, for an FMCG Client. The value of the entire market, to which the analysed case study relates, amounts to about PLN 6 billion annually, while the market dynamics are 8% year-on-year. The Client’s product offer included in the incentive scheme covers 5 market segments, two of which are dominant, both in terms of quantity and value, due to seasonality, with increases recorded during vacations and public holidays. 49% of the sales value is generated by points of sale in the traditional trade segment (kiosks, small, medium and large grocery stores) and it is the representatives of these links in the distribution chain who are targeted by the program analysed. The programme is based on rewarding for repeatability of purchases and achievement of sales targets, supported by gamification methods addressed to both distributors and retailers, including sales staff in retail stores.

Each year, the Client records a real increase in market shares of 1.2 percentage points. What is the significance of each percentage point of the market share, which is worth PLN 6 billion, of which 49% corresponds to traditional trade? It is over PLN 35 million of additional revenues from sales using the traditional channel!

The product sales dynamics covered by the incentive program, in terms of value and quantity, exceeds 8% of the dynamics of the whole market in terms of value. As a result, according to Nielsen’s data, the dynamics of market shares in each of the 7-year programme implementation periods exceeded 1 percentage point.

Statistically, over the past 7 years, the Client has been investing in the programme just over 2.5% of the additional net income it generated from the program. This means that it spent 2.5 groszys net to generate 1 zloty net of additional revenues from sales. This value covered the value of the prizes, i360’s remuneration and communication with the participants. Of course, looking back, the entire budget is financed from additional margin that is generated on sales proceeding from the operation of the incentive program.

Bearing in mind that the budget for prizes, which are given only when the retailer achieves the assumed sales increases, constitutes about 80% of the total budget, the risk is limited to less than 20% of the budget, as a part of the i360’s remuneration is due only if the assumed financial results of the project are achieved. What does that mean in practice? As we said, 2.5 groszys net have been invested continuously for 7 years to generate 1 zloty of additional sales. As the risk concerns only 20% of the budget, it is limited to literally 0.5% for each additional zloty generated.

If you already have an incentive programme in place, we can increase its efficiency by taking over the service, thanks to optimization of the process, legal, tax and consequent costs.

For those of you who represent companies that have not yet implemented any incentive program, your benefit will consist in growing faster than market dynamics, thanks to the launch of an incentive programme based on over 10 years of i360’s market experience.

We invite you to contact the Sales Director, Mr. Dawid Łuciuk at 600.534.631 or Dawid.Luciuk@i360.com.pl

Zapraszamy do kontaktu z dyrektorem sprzedaży Panem Dawidem Łuciukiem pod nr tel. 600.534.631 lub Dawid.Luciuk@i360.com.pl

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