One Blog |December 8, 2014 | POS Tracking Software
POS Marketing Technology — How to Drive Down Your POS Costs
I was standing in the TSA queue at O’Hare airport within the last couple of weeks and way up high on the terminal wall I could see a prominent 20’ x 12’ sign with the message:
WORKERS LOSE UP TO 70 HOURS A YEAR
WAITING TO BOOT AND LOAD APPLICATIONS.
Seeing this message, reminded me:
For nearly 9 years, those of us at OnTrak Software have been amazed at how many minutes per day sales and marketing people spend in configuring, ordering and following up on their POS signage and other marketing materials.
The Real Cost of POS Placing and Tracking POS
Based on information our customers provide us, sales and marketing people “lose” a minimum of 44 hours per year, per person placing and tracking POS material orders from their customers to their internal printing facilities. This is because most beverage alcohol distributors use a manual system to order and track POS, and not a suite of POS marketing technology like OnTrak.
Additional time is lost in rework and replacement, to say nothing of the cost to the retailer in lost incremental sales while incorrect POS materials are removed, reworked, redelivered and replaced. When POS materials have to be reworked often several prime selling days are lost. Products are on the retailer’s shelf without the benefit of being marketed at-retail via the promotional materials that typically provide the last “persuasive push” to turn shoppers to buyers.
Quantifying the Components of POS Costs
- Salary — With a conservative average cost of $36/hour, the lost time spent inefficiently ordering POS alone amounts to nearly $1,600 per rep, per year. For a supplier or distributor with 200 reps, the “lost time” amounts to nearly $320,000.
- Errors and Reworks — For that same supplier or distributor with 200 reps, if each rep makes one ordering error per month, the rework costs add up to an additional $450,000. Based on a rework time of 1.5 hours per rework (according to our customers), the number of hours lost just to get the right POS to the customer swells to about 62 hours per rep, per year. That’s up 18 hours per year, per rep from the 44 hours mentioned earlier.
- Additional Time — Production time can also be lost in locating and loading the raw graphics files that match the supplier’s graphic templates. On average, it requires about 15-20 seconds to locate the raw graphic files based on templates referenced in POS production orders. If 30,000 signs using graphics are created annually, and the time spent in locating the raw graphics for these signs is cut from 20 seconds to 10 seconds each, the savings is 300,000 seconds or over 83 hours per year. Some of OnTrak’s customers produce nearly 10 times as many signs as our example — about 300,000 signs per year. To say the time (and therefore cost) savings are impressive is probably an understatement.
Using POS Marketing Technology to Achieve Significant Savings
These areas of improvements in time, materials and costs amount to substantial, attention getting savings. All this is possible with the deployment of an automated POS promotional materials tracking system. When your reps are freed up of this time spent on ordering, tracking and reworking POS, they can spend more time selling, and generating incremental sales.
For many beverage distributors, hourly sales in the thousands to tens of thousands of dollars are the norm and easily determined with even basic sales analysis tools.
Using our example 200 sales rep beverage supply company, and our expectations of up to 62 hours per rep, per year able to be “reclaimed”, it is simple multiplication to see the potential top-line impact of an additional 62 hours per year spent in selling by each and every one of the reps.
If a typical rep sells an average of $2,000 per hour in product, and is able to work selling products 62 hours more per year, the potential annual incremental revenue per rep would be $124,000. In our example of 200 reps that would be a potential reclaimed top line revenue of more than $24.8 million.
Apply your numbers to this example and you can quickly calculate the significant saving from investing in a POS Tracking software solution. Even if you would expect less than 100% of the hours saved to be spen in making additional sales, the potential incremental revenue you could gain is impressive.
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