TopDeck Solutions

I am personally intrigued by the fact that every CEO that I have ever met will state that Customer Service is one of the 5 key attributes of their companies’ focus and success. We all know that most of them are lying to me. Each of us knows from our own experience day to day that customer service is largely terrible and rarely excellent. Why is this? Over the years I have found that while we like to mention Customer Service in our strategy statement we do not focus on developing business processes that always support it. While we like to include Customer Service in our mission and values statement, we do not deploy performance systems that support it in daily practices within the culture. There are certain sectors where focus on short term cost cutting and efficiencies have resulted in customer service being trampled in unexpected ways. The airline sector is just one of these that has recently grabbed unwanted news headlines with terrible examples of customer service. We have worked with the “world’s favorite airline”, and the most successful organizations in many sectors. Without exception all excel at Customer Service. They focus like maniacs on the customer both at the executive level and on the front lines. They have performance measures in place that promote and ensure very high levels of service in every transaction. They review performance on a regular basis looking for ways to improve customer service delivery. TopDeck can help you to understand and improve Customer Service. The TopDeck Customer Service Certification program (TCSC) will help you to assess Customer Service within your organization, within a few weeks and identify improvement potential. Visit the store on this site to learn more about the Customer Service Certification program or call me and I would be happy to hear your thoughts and recommend an approach. Hope to hear from you soon! General Flood Phone 416-485-9900  

In order to get the most from channel management you should consider extending your reach through a Broker Distributor System and a Broker Performance Management system.

Broker Distribution System:

No matter the size of a company’s own sales force we find that merchandising can generally be improved by utilizing a Broker Distributor to leverage regional relationships and merchandising. Often this arrangement dramatically improves listings at the wholesaler level and builds retail distribution and merchandising. First of all, Broker Distributors can offer better call frequency at both the wholesale and retail levels. Fiurthermore, on a regional basis, they generally have stronger relationships with key accounts.

People often cite the Japanese distribution system as confusing but it isn’t. It features Broker Distributors regionally and on a multilayered basis to the point where a retailer can order a single product (less than case load) which improves their product turns. Broker Distributors can be found in most industries in North America and increasingly in Europe and the Asia Pacific including Australia. Typically these arrangements are made on a sales commission basis usually about 7% of net sales but sometimes higher or lower depending on brand volume. But these Broker Distributors could carry 1300-2500 products in their book and can talk only about 3-4 products on an average call so don’t do it unless you can get more than your fair share of attention. That’s why we invented the Distributor Performance Management System.

Distributor Performance Management:

If your sales rank within a Distributors portfolio is #12 but you are getting more attention than the #3 and #4 brand groups then you are leveraging your channel and practicing excellent channel management. More often than not our consulting assignments show us that most companies have one or more distribution systems but almost no one manages them properly to maximize results. Isn’t it strange that as brand companies we have policies, performance appraisals and objectives with our own employees but we ship our products to distributors over whom we have little or no control. TopDeck’s proprietary Broker Performance Management System was invented for this purpose and is being used by rapidly expanding companies internationally.

Solution:

We can help you to delegate responsibility to your Distributors and get more than your share of attention and success with the Distributor Performance Management System. We can establish it and manage it. We would also like to assess your distribution channels from a competitive standpoint. Their may be additional or alternative channels which will increase your sales and profit margin. Please call General Flood to discuss how we can help at 1-416-485-9900. Also in the shopping section we offer a consulting solution to assess your potential and a checklist for $1 to help you consider the potential for improved channel management.

 

 

A prior Blog questioned the 4 P’s of Marketing theory and stated that it omitted the most important “P”, Positioning. The positioning of a brand is by far the most important element of marketing. Brand Positioning must be unique and compelling; it must be clear and precise. This Blog will explain How.

On a single page we must communicate:
Brand Positioning (Brand Promise) : In a single sentence state how the brand offering is unique and compelling and to whom.
Support for Brand Positioning: What technical, research and historical support proves the brand promise.
Target Group: Expand on the target group to ensure that we can isolate and reach them with chosen media.
Competitive Set: Who else is in the category and what are they saying.
Price Point: Price of this product and any key competition
Target P/V Ratio: Says a lot about resources available to ensure success
For assistance in this area call TopDeck and ask for General Flood. We can also assist you by evaluating your current Brand Positioning and suggesting improvements. The suggested format for Brand Positioning together with examples completed is available in the shopping area for $1.

Yours Truly,
G.F.

The P/V Ratio is not just an important commercial attribute of a brand, it is the most important. As defined in an earlier Blog the Profit to Volume (P/V) ratio is the amount that falls to the bottom line from an incremental sale. Usually it is the Gross Margin less selling and distribution costs. Let’s assume a leading brand has a net sales value of $250/case and a Cost of Goods of $75 per case yielding a Gross Margin $150 per case. Assuming selling costs of 10% and distribution costs of 7% the P/V ratio would be $107.50. Compare this to a price brand or generic in the same category whose P/V ratio is likely $40-50 and you can see the advantage. The P/V ratio defined the brands “will to live”. In battle it can deploy twice the resources. On an every day basis it can afford superior advertising and merchandising. Marketing is Advertising and Merchandising! In an emergency the premium brand can deliver “shock and awe” and still make its money back after competition has been forced to leave the field of battle. Naturally the General prefers premium priced brands because they have more firepower. Such a brand should never consider cutting its price long term as this is an unforgivable “act of surrender” in the face of combat. Always protect your P/V ratio to the last combatant.

The Story:
Long ago and far away there was a major battle in Australia. Unilever was preparing to enter the dishwashing detergent category in Australia where Finish DWD had an 75% share and represented 80% of the local companies profit. General Flood was consulting to the Finish brand and prepared a strategic response to Unilever, warning the local GM to hold his price when attacked. Unilever launched the Sunlight brand into the category. Sunlight is a brand in many hard surface cleaning categories around the world that offers and fresh lemon scent and a 7-10% price advantage. In response to the Sunlight launch the local GM cut the price of Finish and was immediately removed
from the battle. The price cut would reduce the P/V ratio to the point where no defense could be justified as spending and payback opportunities were evaporated by the lowered price. Immediately the Finish brand prior pricing was restored and the proper attack was implemented. A line extension Lemon Finish version was launched along side Regular Finish DWD. Simultaneously a “works okay and costs 30% less” price-flanker brand was launched. This way the “news value” of Sunlight brand position was totally destroyed. It was a me too lemon version and at a higher price than the price flanker brand. Finish, with its high P/V ratio restored had the will to win and Sunlight had great difficulty buffeted around by heavy shelf merchandising and with nothing new to say. Unilever withdrew from the market place.

Does this mean that the Sunlight brand is potentially vulnerable everywhere in the world where it is currently sold? Probably.

This story shows both the importance of P/V ratio and the importance of unique and compelling Brand Positioning, the subject of an earlier Blog. Contact TopDeck and ask for General Flood. I will be glad to assist you to measure and improve both Brand Positioning and Brand P/V ratio.

Yours Truly,
G.F.

Brand Equity has long been discussed and defined in different ways by so called experts. It has to do with the way the consumers or customers feel about the brand. A brand with high brand equity must be one that customers feel stronger and more positive about than its competing brands that exhibit lower brand equity. A brand with strong brand equity will exhibit higher “Top of Mind” or “Unaided” awareness. It will perform at a higher price point than its competition. While these qualities of Brand Equity are probably true and intrinsic, they do not help us to quantify Brand Equity. Long before I became a General I had to develop a quantifiable and commercial method of defining Brand Equity. After all, if we are going to sell a brand we need to agree with the buyer what it’s worth and visa versa. Brand Loyalty should not be confused with this evaluation as it is something quite different and has to do with the propensity to purchase which in turn is related to purchase frequency. Brand Loyalty is a separate notion, part of buyer behavior and will be discussed at a later date. Setting aside the esoteric and etherial qualities often discussed the General can help you to define and measure Brand Equity.
General Flood’s Brand Equity Disclosure:

BE = f{P/V x 4V} Brand Equity is a function of the Profit to Volume ratio x 4 years of Volume

The most important attribute of Brand Equity is the brands P/V or Profit to Volume ratio. This is the amount of money that falls to the bottom line when an incremental product or service is sold. Usually stated in shipping case value. This is usually defined as the Gross Margin minus other transaction costs such as commissions and shipping costs. We then multiply this P/V ratio by 4 years of volume, the last 2 actual and the next 2 expected. This allows for the fact that bigger brands are worth more than smaller brands. Future years are included to allow for the fact that the brand may be regional currently or in test. It also allows for the fact that there may be channel management opportunities. Perhaps the brand has only 64% All Commodity distribution due to weakness in the channel management strategy and the buyer can easily see improving this to 97% like their other brands in the same channel. This valuation method can bring the buyer and seller into concurrence and properly done yields the buyer a higher valuation leading to a deal. This valuation is also used to measure the payback period, the length of time for the buyer to get their money back and produce a targeted return.

We can help you to evaluate Brand Equity. Just call TopDeck Solutions and ask for General Flood.

Of course we often have to buy a company to acquire a brand. This means that in addition to the brands we need to value efficiencies, identify processes that can be improved or discontinued and understand the Culture of the company we are acquiring so that obstacles to change can be understood and planned for to ensure performance targets based on the acquisition. TopDeck Solutions has tools to help you with due diligence to identify potential in Brands, Business Processes and Culture Change. Call TopDeck Solutions and ask to speak to General Flood.

Sincerely,

G.F.