In an article originally written for FMBE Magazine, Director of Retail Alchemy Rhys Jones, investigates the value of Field Sales Relationships.
The relative merit of an ongoing field sales relationship versus a more short term, tactical relationship is one that many of our clients are concerned about. Naturally, most field agencies prefer an ongoing relationship since this both grants some guarantee of longevity in terms of repeat business, and allows such agencies to benefit from the operational efficiencies granted by having a well-established, largely fixed, team in place.
But is there also a tangible benefit in terms of ROI to the agencies’ client from having such a relationship in place as well? Our work on proving the true incremental value that field sales activity returns suggests that there is.
Take a look at the two graphs below. In both cases we have mapped the ROI from various field sales campaigns from a variety of clients in our database against the number of stores that that activity covered and the number of weeks for which the activity took place (i.e. against the ‘size’ and relative ‘scale’ of that activity).
It’s clear from the graphs that an interesting pattern emerges: as size and scale increase, so too does ROI, indicating that ongoing relationships (i.e. those with size and/or scale) yield a higher ROI than shorter or smaller scale tactical engagements.
Some of this pattern will be down to the differing costs associated with an ongoing vs a tactical team: agencies often face increased recruitment costs associated with the short term set up of more tactical teams and these costs are often passed on to the client in the form of an increased daily rate, depressing any ROI gained from the activity.
However, there is more to it than that. Our studies have consistently shown that, on a like for like basis, many tactical engagements are less effective than their longer term counter parts in terms of revenue uplift generated and indeed the length of time that activity continues to affect store sales after the store visit has taken place. Quality of hire and indeed ‘cohesion’ of team both internally and in terms of relationship with retailer staff clearly matter when it comes to the effectiveness of a store visit.
The upshot of all of this? Rather than commission activity based on a budget cycle, agencies and clients need to find a way to work together much more closely so that work, and more importantly relationships in the field are not disrupted.