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Five Primary Reasons why MSO's Fail

In the nearly 25 years I've been doing this I've been privileged to work with the best MSO's in the industry; and unfortunately I've watched some good people lose lucrative MSO companies. 

It's a well-known axiom that over half of business fail within 5 years of startup. That number holds true in the retail industry, and I'm certain that part of the reason for the retail drop off is connected to inadequate merchandising services delivery.

So, why does that happen? Why do MSOs fail to support their retail clients (and go out of business themselves)?

I've got five areas that – if not addressed – set you and your MSO company up for failure.

Five Primary Reasons why MSO's Fail

  1. Not understanding client needs accurately

You'd be surprised how many times a retailer-MSO relationship ends because it started with a muddled understanding of needs. Sure, project completion, speed of service delivery, and other metrics have a profound effect on your success rate. But if you don't fully uncover your client's needs at the outset, problems can occur later on. I've come to believe that business success is mostly the result of clarity and communication; and this goes right back to those points.

  1. Poor planning/lack of planning

Assuming you've uncovered their needs fully, the next step is to come up with a firm, yet flexible plan of action. Retailers rely on MSOs to keep their stores well-stocked, appropriately marketed, and full of top-selling products. You can't do that without having a plan in place that ensures that a rep will be on site at the right time (every time) with the goal of 100% completion. And don't forget to plan for contingencies and emergencies – responding to those situations will make your break your relationship. Of course, developing clarity involves adequate planning, so we see that continues to rule the day.

  1. Acting swiftly and being responsive

Retail is an every-second-counts industry. Even when things are running smoothly, you've got to be incredibly fast at fulfilling client demands. You can't leave store managers sweating that shipment processing errors will leave shelves empty and back rooms full. Think about Black Friday, for instance. What do you do when a last-minute shipment of a highly marketed holiday gift gets coded wrong on the Thursday prior?

That's where mobile technology and field workforce management software give you the power to execute responsive plans address urgent problems.

  1. Inadequate Staffing

Let me ask you: how many reps per store are you carrying? Can they complete projects on time?

If you don't have a way to measure those metrics, you're already in trouble. ESP provides tools to measure and monitor those metrics and many more -- for this and other important reasons. Make sure your software provider can help you here so you can avoid business destroying mistakes and maximize business profits.

Learn More About Field Management By Metrics ›

What is your primary workforce count...and what does your backup team look like? You can have some of the best reps in the world, but if you don't have enough bodies, you're sunk.

Now that isn't to say you just put someone who can fog up a mirror in the stores of your valuable clients. No. You've got to have motivated, well-trained individuals. After all, they are the face of your MSO.

Which brings me to my next point....

  1. Sufficient training

If your reps don't have a clear handle on key requirements such as kitting or signing for each of their stores, then you've got a problem. Some MSOs take the independent contractor approach. Let field workers manage their stores – after all, they are in there, right?

Well, if you don't have a thoughtful, well-executed training program, your client base will notice.

Not all retailers follow the same in-store marketing approach (though there are plenty of similarities). If reps are left up to their own devices:

  • your servicing becomes inconsistent,
  • you may be unable to quickly respond to urgent needs, and
  • new reps will get confused early and take matters in their own hands, creating even more inconsistency.

The good news is that mobile workforce tools and retail execution software can help address most of these areas. Tools help reps implement the careful planning that must take place, allow you to be swift, responsive, and flexible, and help to optimize workers in order to maintain a high completion rate.

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Topics: mso merchandising success merchandising greatness