Motivation programme

Prepared for:

September, 2010

resources: people

142 people in Moscow HQ7 regional offices

83 permanent representatives in smaller citiesactive coverage of 617 cities

*source: GFK & RAMU 2009 BTL market survey (next two slides)

about us action! was founded in 2004

action! creates consumer and trade solutions

more clients recommend action! to their peers than any other btl agency*

action! looks at the world differently

Clients:beeline, electrolux, kimberly clark, fritolay, pepsi and more

Trade marketing agency ratings 2010

6,79

6,84

6,97

7,51

7,61

7,72

7,73

7,85

7,96

8,22

6,00 6,50 7,00 7,50 8,00 8,50

BeeTL

IQ Marketing

IMS Marketing

ITM

Orange

EMG

Progression

___ -Draft

TVIN IMC

Action

224 employees from 125 companies (top 150 list)

Selection criteria: reliability, quality, creativity

source:RAMU survey 2010

Case studies: motivation programmes

april 2008 - april 2010

Beeline experience

Kimberly Clark

integrated motivation programme for distributors and traditional trade

autumn 2009

«ПРИЗнано в Европе, ПРИЗнайте и Вы»

june-november 2010

Frito-Lay

traditional trade motivation program

Oct-Nov 2009

Beer T

motivational programme for point of sales owners and salesmen

June-August 2008

Motivational program for salesmen («Связной» chain)

July-October 2009

Goodyear

salesmen loyalty club winter 2008 winter 2009

Our experience with Heineken brands

key account merchandising

Three medvedya promoEdelweiss promo

promo merchandising events

PIT Nasha Russia Promo

Ohotaproduction t-shirts

mailingwarehouse

Dr.Diesel promoAmstel promo

Bochkarev lottery

PIT Nashestvie

Heineken event “farewell”

Heineken event “Baikal”

key account merchandising

Test audit

To understand the current field situation we conducted an audit of 50 points of sale. (in proportion to the channel mix specified in the brief) :

Test audit

SM 14% 7

Kiosk 14% 7

BTC 72% 36

Total 50

The main conclusions:

Test audit

10% points of sales have difficulties with ordering product.

28% points of sale have difficulties with product delivery (out of stock)

POSM presence (any beer brand): 0%

Promo activities (beer brands): 0%

The main conclusions:

Test audit

# of outlets Edelweiss (Эдельвейс)

Guinness (Гиннесс)

Heineken (Хейнекен)

Ohota (Охота) PIT (ПИТ)

Zlaty bazant (Златый Базант)

kiosk 7 42,86 42,86 100,00 100,00 57,14 71,43

SM 7 85,71 71,43 57,14 85,71 42,86 71,43

BTC 36 50,00 50,00 88,89 97,22 33,33 52,78

      - Distribution level more than 50 %

Brand presence at points of sale (%):

Target audience analysis

Goals :to understand the motivational programme member profileto understand their attitude to such programmes

ProfileProgramme members (salesmen and administrators)

Women: 92% Married: 79% Over 45 years old 46%Children 81%Children under 18 66%

Hobbies: 36% specified quiet leisure activities such as going for a stroll, watching movies, theatre, reading

More than 2,500 trade channel employees were surveyed

Attitude to motivational programs96% take part in motivational programmes 4% don’t take part in the other programs due to: lack of time (23%)they don’t trust such programs (30%)administration prohibition (18%)

The most attractive prize – gift certificates of main chains ( seen as a money reward) (52%)25% don’t care about the type of the prize.89% participants noted that motivational program is attractive for them because of prizes.

Reasons for refusing to participate motivational programmes :

Main issues

mechanics

Programme availability

MOTIVATIONAL PROGRAMME SHOULD BE EASY TO UNDERSTAND (FOR PARTICIPANTS)

PRIZE FUND AND MOTIVATING FACTORS SHOULD BE ATTRACTIVE AND DESIRABLE

ALL PARTICIPANTS INVOLVED INTO THE PROGRAMME SHOULD BE INFORMED OF THEIR RESULTS, AND GET INFORMATION ABOUT THEIR EFFECTIVENESS.THE MOST EFFECTIVE WAY IS TO USE CRM SYSTEM WHICH HAS BEEN DEVELOPED BY HEINEKEN (THE FIRST EXPERIENCE IN FMCG MARKET)

Information availability Achievable result

GOALS PER EACH POS SHOULD BE ACHIEVABLE AND FLEXIBLE

Result 15% sales growth (SELL-IN) Loyalty increasing to Heineken brands

Programme principles

Programme KPI

Sales Growth -15%

Merchandising

Range of products

POSM

Increased loyalty of trade channel personnel

Crit

eria

of

“Mod

el”

outle

ts

Approach. ROI Calculator

Average turnover per monthSM 50 000∂.BTC 25 200∂.Kiosk 20 000∂.# of months 12

Type # of outletsshare of

the universe

% of growthexpected turnover

including growth

ESTIMATED INCREMENTAL

SALESCost per visit

additional expenses (POSM production, IVR, Management)

gross margin (assumption)

INCREMENTAL (GM) minus all expenses

ROI (based on

estimated growth)

15% 234∂. 1 21% 3% 94∂. 35%

SM 1000 13% 15% 57 500∂. 7 500∂. 234∂. 1 1 575∂. 3% 94∂. 35% 723∂. 38%BTC 6000 75% 15% 28 980∂. 3 780∂. 234∂. 1 794∂. 3% 94∂. 35% 202∂. 18%Kiosk 1000 13% 15% 23 000∂. 3 000∂. 234∂. 1 630∂. 3% 94∂. 35% 93∂. 10%

Total

Total 231 380 000∂.33 180 000∂.1 870 586∂. 6 967 800∂. 748 518∂. 2 026 096∂. 21%

Total 3 052 560 000∂.398 160 000∂.22 447 034∂. 83 613 600∂. 8 982 220∂. 24 313 147∂. 21%

5%

8000

Breakeven point (minimal growth of turmover to cover field and additional expenses)

# of visits per monthInvestments to outlet (prizes

fund)

1 outlet per 1 month

Calculator

Bonus Scheme

We recommend 2 levels of motivation:

Prize Fund

Prize Fund should meet the following requirements:

To be attractive for participants

To have a wide range of goods for optional choice

Short lead time for receiving prize

Effective logistics including management of stock

Possibility for constant purchasing, short lead time for purchasing/production

Effective Cash Flow

Prize fund. action! experience

Our wide experience in motivation programme execution and programme data analysis shows that the most attractive prize for customers is a gift certificate :

Statistics are based on more than 200 000 ordersGift certificate share = 77%

Prize fund. preferences

Based on our experience, the main participating chains:

We propose catalogue of prizes with 3 types*

1.Prizes which don’t require logistics2.Retail Chain cards3.High perceived value prizes

*saving of about 15% of prize fund if participants order prizes themselves

Mechanics for prize distribution:

•Automatically (type 1)•By Sales Representatives•By Mystery Shoppers (immediate prizes for product placement)•Redemption centre (via our offices)

Prize Fund Proposal

Prize fund. Type 1

Prizes which don‘t require logistics

Eldorado cards

E-shop OZON.RUWide range of products, regional coverage – 37 cities, Possibility to work with legal entities to replenish private accounts

Mobile account replenishment (all operators)

Fuel cards (Ruspetrol)These cards are accepted on TNK, Slavneft, Sibneft, Rosneft,Tatneft & others. About 500 points in Moscow & Moscow Region

Prizes Fund. Type 2

Retail Chain CardsBeauty Impressions

Sport Family Food

Clothes

DVD-disc setsWe have an opportunity to buy license Universal disks at low price – 72 rubles per disk. The price depends on volume of the order, so we can recommend this as a guaranteed prize for «model outlet». It can be distributed by mystery shoppers during their visits

Tickets to performances and showsAs we know Heineken have free-charge tickets to performances (if Heineken is sponsor of this event, for example). It can be special offer to all participants or to the best performance participants

On-line prizes:lottery - participant can win a lot # of points by spending minimum # of them, prize fund is collected from points of participants virtual auction on-line games with opportunity to spend points for upgrading

High perceived value prizes. Type 3

Decision for taxes

Based on our wide experience we recommend the following accountancy scheme to minimise taxes on the one hand and to observe the rules on the other hand:

10% of prizes fund are in official documents, 90% we arrange as service (POSM placement, audit, trainings etc.)

the list of prizes shouldn‘t include prizes of a value more than 3 999 rubles

Saving cost calculation:

100% arrangement: prize cost + VAT (it is not subject to compensation in this case) + 20% taxes on profitIf the prize costs 100 rubles, you actually pay 138 rubles

Our scheme: 10% - above mentioned calculation, 90% - prizes cost + VAT (cost of our scheme)If the prize costs 100 rubles, you are to pay 10+3,8+90+16,2 = 120 rubles including VAT to compensation - 16,2 rub.

Actual cost of 103.8 rub vs 138 rub.

Creative concepts

Visual 1

Visual 2

Visual 3

Communication with participants

Work with participants

Programme attractiveness for participants starts at the planning stage. However it is highly important to keep the participants informed and interested in programme at the set-up stage and after it. Otherwise interest to the program will be lost.

Basis of success for involving participants is the sales approach. We consider communication with a participant as a motivational programme sales tool.

Action! experience – quantity of active programme participants increased by 80% per 9 program months.

Motivation programme management

CRM-exported data , “field” reports

Award cost Award typesDelivery award time

Parameters for analysis

Decision

Participants activation Resource planningTransport logisticsDelivery time optimisationPrize fund modification

Participants number Number of active participants by groups Parameters dynamic

Communication tools

Database creation via which regular mailing is executed (SMS, E-mail, mail)

Personalised addressing

Face-to-face communication

Information materials

Creating info occasions – to maintain interest to the program (draws, events, changing programme conditions)

Participation stimulation (bonus per the 1st sale, additional bonuses subject to fulfilling target levels)

IVR-support (Hot line)

Brochure- contains programme conditions (to be distributed during the first visit). Contains participant questionnaire (personal data, contact information)

Prize fund catalogue -a leaflet with prizes descriptions, codes, pictures and prices (specified by relative value).

Sticker- programme reminder, containing consultant & contact information (sticks on a suitable surface in POS)

Participant card -small programme directory-reminder. Contains summary of main programme conditions and hotline number.

Information Materials

Hotline

Hotline provides the following information support :

Programme conditionsRegistration in programme Score talliesBalancePrize order Complaints handling

Hotline work parameters :

Schedule of work: Monday – Friday 9.00 am - 9.00 pm Moscow time Period – 12 months3 operators

IVR text regular updating# incoming calls - not more than 40 per dayCalls recording service level is not less than 85%

Event

It is very important to distinguish the most successful participants during the programme. (possible criteria: scores, turnover level, etc).

The distinguished result should be – the best team (best 10, best 100, etc)

Action! recommends as incentives: Special subject events :Open air partyThematic abroad trips

Optional: internet –portal with interactive interface and on-line competitions and lottery.

Beeline

Autumn 2008

Beeline

Autumn 2008

Client’s Feedbacks:

Ural Regional Representative Office ОАО “Вымпелком» conveys the gratitude for “Step Forward” Event organization and execution. The event was really bright and memorable.

We are sure that our future cooperation will be as positive and fruitful as the event.

D. BaklanovUral Regional Director

On behalf of our Company and myself I would like to thank the whole Action team for excellent event organization. You have proved your professionalism in Events organization – one more time, as usual!

Ekaterina IlyinaTrade Marketing ManagerMoscow

Heineken elite club

Goals:To distinguish participants who achieved best results To heighten loyaltyTo establish stretch goals for all participants

Selection principles:Goals should be ambitious and achievable.Possible indicators –number of scores, definite turnover achievement (subject to range and shelving requirements fulfillment)

Distinctions “Gold star” (accessory) awardingBest performers are announced via all information channels of the programMini event for all POS staff in honour of joining the elite Heineken club

Business advantages:

Taking part in bonus programmes (exclusive conditions)

Taking part in promo

Improving POS standards = increased sales

Extra advantages:

Taking part in a dream prize draw

Extended prize fund

Taking part in events (automatically)

Possibility to take part in business trainings

New participant’s presentation (via programme communication tools)

Heineken elite club

Account managerRzhanova TatianaAccount managerRzhanova Tatiana

Reporting coordinatorVitaliy Kuzovnikov

Reporting coordinatorVitaliy Kuzovnikov Purchasing

coordinatorBerezgova Alesya

Purchasing coordinator

Berezgova Alesya

Financial administrationFinancial administration DesignersDesigners ProductionProductionLogisticLogistic

Field managerSmirnov RomaField managerSmirnov Roma

Prizes Fund ManagerAnna Yakovskaya

Prizes Fund ManagerAnna Yakovskaya

Account directorPolkanova Olga

Account directorPolkanova Olga

Warehouse Coordinator

Bakhirev Sasha

Warehouse Coordinator

Bakhirev Sasha

Reporting Coordinator

Alesya Yakovleva

Reporting Coordinator

Alesya Yakovleva

CRM & IVR managerAlyona Stupaeva

CRM & IVR managerAlyona Stupaeva

Reporting Coordinator

Kopchikova Ksenia

Reporting Coordinator

Kopchikova Ksenia

IVR coordinatorMasha Terjan

IVR coordinatorMasha Terjan

HRTerebova Natasha

HRTerebova Natasha

Management structure

Appropriate in-depth experience

Financial stability

Strong management structure ready to carry out the project

Long-term cooperation with prize suppliers

Wide & deep regional structure

Our business resources (financial and human) and experience enable us to carry out any Heineken project to the highest level of quality

Why Action?

Addendum Field work

Project field personnel

There are two different approaches:

Agency staff involvementClient staff involvement + control by the agency

Judging by our experience, agency staff involvement is more efficient. Client staff usually have lots of other functions, agency personnel on the contrary 100% aimed at motivation programme goals.

action!

Unique experience and system of personnel training and management in terms of motivational programmesSales approach is in the basis of our system– «we sell motivational programmes to participants».

Ready to take responsibility for the result!

Mystery shopper scheme

Open auditvisits – 1 per month 8000 POS of address programme

coverage – 100% per month

18 auditors involved

Visits quantity per day– 20 visits per auditor

Field personnel functions

POS audit, report filing, Consulting on programme, objections solving,Programme parameters fulfillment control including photo reportoptional– prizes delivery

profileExperience of work for similar projectsage 25+Excellent product range knowledge and competitive advantages knowledge Ability to carry out project properlyReal interest to work in this area

controlAgency supervisorsCoordinators field visits (twice per month) Sales representatives control Joint visits (Client+ agency representative)

Field personnel training system

Training theme Content

main training(at set-up stage)

Product knowledgeProgramme mechanicReportingSales stages (getting into contact with POS, programme presentation, objections handling)Final test to get the permission for work in POS

Trainings after field visits (weekly) Typical objections solvingComplex field situations and problem solving

Field trainings Work correction (coaching in POS) All supervisors have specialised training on coaching skills

Trainings for consultants and supervisors

Training team:Moscow – staff trainers

*all trainings have a video copy and supplementary materials

Reporting

Action! has a bespoke on-line reporting system, based on PDA.

Advantages:On-line reportsNo manual data capturing, minimising errorsAutomatic photo reports – there is no need to collect them by coordinator constant field personnel control

Reports typesField reports (POS checking results) Prizes ordering reportsPrizes delivery report (if Agency is responsible for the delivery)

PDA report example - excel

PDA report example – photo report

take

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