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Differentiating at the right journey touchpoints is the key to value creation
Onboarding
Engagement
Retention
The segment demonstrates an average performance with a potential for differentiation across FFP and money saver offerings
Q1 – Was the onboarding experience transparent and hassle-free?
Voice of customer insights
The experience of the distributors while onboarding with the FMCG brands is average and needs improvement –
- Brands often conduct rigorous due diligence, which can be time-consuming and may deter potential distributors
- Difficulty in adapting to digital tools and platforms required by the brand can pose challenges, especially for smaller distributors
- A lack of clarity on how the partnership will help distributors scale their business can affect their willingness to commit
- Lengthy and complicated paperwork for compliance and agreements can delay the onboarding process
- Negotiations on trade schemes are another area where distributors are currently not satisfied with the experience
More emphasis is required on relation-building vs transactional activities for sustaining growth
Q2 - Did the brand make it easy for me to conduct business with them?
Voice of customer insights
Overemphasis on transactional activities rather than relationship-building can leave distributors feeling undervalued –
- Poor support and coordination from the regional sales team can also hinder operations and affect the business relationship negatively
- Inefficient handling of sales returns or damaged products can disrupt cash flow and affect trust
- Repeated inefficiency or delayed processing of sales orders impacting the distributors order book or leading to missed allocation of fast moving items can directly lead to poor experience
Supply chain disruptions can delay deliveries, making regular updates and easy tracking essential for a great experience.
Enhanced coordination and support across the payment cycle can significantly elevate the distributor experience
Q3 - Did the brand appreciate my business and make it a rewarding experience?
Voice of customer insights
Overall, the segment is showcasing a consistent performance across parameters with ratings between 3.8 and 4.2 –
- Lack of regular updates on inventory levels, promotions, and delivery schedules can lead to inefficiencies
- Lack of clarity or disagreements over payment terms with the FMCG brand can cause friction.
High variance in customer ratings was observed across trade scheme reimbursement and sign-off on receivables –
- A misalignment between receivables and payables can strain working capital, impacting operations
- Hence, indicating a potential for brand differentiation across payments and financial support.
Striking the right balance between delighting the distributor and the cost of servicing them is key to maximising value
Performance of the segment on prioritised experience attributes
The focus of the FMCG ecosystem, including brands and distributors, is shifting from urban markets to rural regions
- Rural demand is outpacing urban consumption, prompting distributors to prioritise rural areas for growth
- Companies are tailoring their strategies to meet the unique needs of different regions, hence, a wide portfolio and pan-India presence might be essential for driving regional customisation
Collaborative efforts and mutually beneficial strategies are required to keep pace with the industry
- Distributors are facing increased inventory levels due to fluctuating demands and aggressive consumption patterns
- The adoption of digital tools for inventory management, order tracking, and analytics is becoming the need of the hour for enhancing efficiency and transparency
- The rise of e-commerce and direct-to-consumer models is also altering traditional distribution methods, requiring distributors to adapt to new dynamics
Distributor retention is influenced more by growth opportunities than satisfaction, with 49 per cent switching to brands that promise scalability
Customer segmentation based on satisfaction and loyalty
(percentage share of respondents)
Distributor retention is dependent on their satisfaction with the brand and their tendency to explore alternatives. ‘Ambassadors’ are highly satisfied distributors who will keep contributing to the brand’s success. ‘Switchers’ on the other hand, are always seeking better options. ‘Critics’ as the third segment, actively convey negative feedback about the brand, if not satisfied. Finally, ‘Dependents’ are distributors who remain loyal despite low satisfaction due to lack of alternatives in the market.
98 per cent of the distributors are satisfied with the FMCG brands they are currently associated with
49 per cent of the distributors might discontinue working with the FMCG brands if expectations are not met –
- 12 per cent of distributors stated that reasonable margins and product schemes are crucial for continued business
- 11 per cent mentioned unethical practices, non-adherence with the FDA compliance, or false advertising on ingredients, may tarnish distributors’ trust in the brand, hence, causing them to seek alternate brands
- 9 per cent of distributors favor brands that can meet product requirements when expanding into a new category
The segment fulfilling the experience requirements at 83/100, with need for improvement on the ‘Personalisation’ pillar
Performance across the KPMG in India’s six pillars of distributor experience
(Weightage of the pillars to the overall experience requirements)
‘Expectation’ (26 per cent) and ‘Integrity’ (20 per cent) are the key pillars influencing the decision of the distributors
FMCG brands can meet distributors' expectations by –
- Maintaining clear and consistent communication about product availability, pricing, and promotional offers
- Ensuring timely delivery of products and minimising supply chain disruptions
- Supporting on inventory management
- Using digital tools for real-time tracking, order placement, and performance analytics
FMCG brands can improve on the ‘Personalisation’ pillar by –
- Tailoring strategies to suit the unique needs of different regions and distributor profiles
- Providing training on product knowledge, sales techniques, and market trends to empower distributors
- Offering competitive margins and incentives to keep distributors motivated and financially satisfied
Distributor’s willingness to invest more is highest across ‘ Expectation’ and ‘Time and Effort’ pillars
Top experience attributes influencing the distributor’s willingness to pay
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FMCG brand with a wide product portfolio catering to different consumer segments
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Trusting brand name amongst peers and end-distributor
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Nation-wide availability of all product categories
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Refunds and returns on the damaged/extra products
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Delivery experience on orders, TAT, and communication
An individual’s willingness to pay a premium is driven by immediate needs. As today’s customer evolves, the focal aspects of premiumisation have shifted from functionality to experience. This aspect may translate as personalised convenience, focus on efficiency, and exclusive margins.
- 28 per cent of the distributors will be open to negotiations on margins, considering the brand can offer a vast portfolio of products
- 27 per cent will agree on lower margins and may invest more in distribution when working for a trusted FMCG brand
- A nationwide presence boosts demand and reach, with 23 per cent of distributors willing to invest more in such brands
Ease of operations influences 20 per cent of the distributors to invest more -
- Refunds and returns for damaged products in transit reassure distributors of risk coverage, and
- Efficient and timely delivery builds reliability and trust, encouraging distributors to invest more and pay premium prices
Our customer experience (CX) insights across sectors
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