Until recently, consumer packaged goods (CPG) companies have been able to offset rising commodity, transportation, and energy costs by passing on higher prices to consumers.
Yet, the move of cash-strapped consumers to lower cost, private label products, and the likelihood that future growth will come from outside of local markets, has made bumping up prices a less tenable response to margin pressure.
This puts CPG companies in an awkward squeeze: costs continue to rise, while investors expect earnings growth.
One area for potential savings is in a company’s sales organization. The average sales organization can usually reduce administrative expense by 2 to 3 percent without negatively affecting pipeline or performance, at least in the short term.
But beyond temporary cuts to sales administration, there are more long-lasting and significant efficiencies that can be gained, again without hurting overall sales effectiveness.
To help sales executives in their efforts, Deloitte Consulting LLP's Larry Hitchcock and Sales Benchmark Index (SBI)'s Mike Drapeau have amassed industry intelligence and analyzed it to identify five key ways a CPG sales leader can realize substantial and sustainable savings.
The average sales organization can usually reduce administrative expense by 2-3 percent without affecting pipeline or performance.