January 22, 2009

Cultivating "Demand Led" Business

Posted by Bizaholic | 9:24 PM | with 0 comments »

Every business has to be "demand led" to prosper in the long run. Streamlining systems and processes of sales management is the ideal point to start cultivating a culture of "demand led" rather than "push driven".

There are still many companies in India that are primarily "push driven" and focus much of their energy on pumping stocks among trade partners (dealers and stockists) and keeping inventory at a higher level than necessary. Unfortunately, this is not the best way to do business as any sustainable model of business has to built on "choice" rather than "force".

Transformation of a business into "demand led" could start with following initiatives at basic sales management level:
  1. Greater engagement of stockist in the sales process - Stockists have to be trained and equipped with necessary know-how and made accountable for the sales of the geographical area assigned to them. For a given geographical market, stockists are permanent in nature vis-a-vis sales personnel who may move from one assignment to another from time to time. Systematic development and engagement of a stockist would help in establishing a fairly permanent face in the market irrespective of the movement of the sales personnel in charge of the area.
  2. Demand led ordering process - Any order has to be as per demand received from the market and within the policies and systems of the business rather than to meet primary sales target. Focus should be on demand creation rather than order punching. If demand comes, orders are bound to follow.
  3. Company sales personnel as guide - Role of company sales personnel must be redefined to make more involved in mentoring the stockist and guiding him to generate more and more sales. The essence of the role should be to become a bridge between the company and the stockist whereby the sales personnel acts as a mentor to the stockist and a custodian of company policies and systems.
At the heart of any business success is the ability to create sustained demand for its products and services without any coercion or force. For this to happen, it is essential that both marketing and sales process are driven by a "demand led" culture.