By using Salient Management Company’s performance management solution, RC Beverage figured out how to compete more effectively with larger competitors and manage business performance to gain market share and improve margin.
Royal Crown Bottling (RCB) of Evansville Indiana began operations in 1938 and grew through acquisition and market share gains to distributing more than 5 million cases per year. The company bottles and distributes Royal Crown Cola (RC), 7UP and other soft drinks, teas, fruit drinks and bottled water in a territory that includes portions of Indiana, Illinois, Kentucky, Tennessee, and Missouri. RC-Evansville has seen major market share growth in its “new age” beverages as consumer tastes are expanding. Increasingly, its customers are wholesale-type retailers who demand low price points to satisfy their consumers’ expectations.
Then the game got tougher for this independent company. The business was built on close relationships with long-time customers, but suddenly the competition got fierce. While the competition became more aggressive, the direct store delivery (DSD) business was rapidly changing. Costs were going up and margins were shrinking for everyone. For RC-Evansville, despite the fast-moving playing field, there was little information available to the street-level sales team. What had become a straightforward account management task became more complex as more packages, products and options were available to every account. All of the variations required detailed information and a level of analysis that had never been needed before. To top it off, larger competitors had become technically savvy and were well-equipped to go head-to-head in the marketplace. In order to continue its winning ways, the RC-Evansville sales team needed to quickly review the relevant information and make sales decisions based on facts rather than on gut feel or from simplistic, historical information.
- Maintain market share growth and improve profitability
- Capture loyalty and market share from rapidly-expanding wholesale-type retailers
- Increase productivity and profitability in a short period of time
- Improve visibility into the ramifications of sales decisions
- Address the change in company culture forced by competitive pressures
RC-Evansville faced an uphill battle in its fight to retain its market and improve profitability. Traditionally, the sales team followed their instincts when it came to setting a price point for customers. Frequently a wrong guess would be made by several sales persons and profitability hits and production miscues would compound and last for a significant period of time. Additionally, without the means to track and understand new product adoption, RC-Evansville had no way of proving to customers that taking on a new product would deliver significant returns.
The big competitors in the market had the data and technology to make the sales process easier. In contrast, the RC-Evansville sales team was lacking visibility into their pricing, promotion and sales strategy. The competition was using data to demonstrate to customers how they could put more money in their pocket using competitive products.
The RC-Evansville management team found that the playing field was
becoming uneven and they were ready to make it level once again.
The management team knew that the entire sales team required technical training and the group needed a robust, yet simple business performance management solution that would provide valuable insight into promotion and pricing strategies, without overwhelming the team. So as not to stop momentum and not lose market share, there was little time to waste on the learning curve between technology enablement and full business performance management.
Despite the obstacles, senior management automated the sales team and looked to move from a home-grown information analysis system that involved reams of paper and weeks of analysis to a solution that could provide effective and immediate insight into daily business activities.
- Empower the sales team with a strong business performance management solution
- Apply data visibility, speed and granularity to enhance every selling situation
- Rapidly adopt and customize a solution that will enable the company to compete more effectively in a changing business environment
The management team wanted to put the company on an even footing with their larger rivals. Management also wanted to ensure that future growth could be easily accommodated and that the Total Cost of Ownership (TCO) for the solution was low. RC-Evansville chose Margin Minder® for their performance management solution after an extensive search.
Once the sales team was trained in the new environment, the value of the solution was immediately apparent. The difference between perception and reality about the sources of profitability was verified, and re-verified. Once a level of trust was in place between the sales team and the data, and the team was confident in the accuracy of the information, RC-Evansville was able to focus on making its sales agreements more effective and profitable.
The sales team uses Margin Minder® to check pricing and volume ranges to ensure that they don’t have products that are being sold at the wrong price. Sales managers can now check for holes in the product mix at each customer site to make sure that customers are effectively selling all lines. Each sales manager can use the data from Margin Minder® to show a customer how to enhance profitability by carrying and promoting the right mix of products at the right price.