Canvassing is “a planned activity conducted by a person to offer, distribute, seeking sales order for certain products and services, including to deliver and collect certain information from the retailers and/or consumers” M. Reza A. Suarga, 2011
A canvasser is someone who perform canvassing activity.
In Indonesia, canvassing is mostly used by FMCG (Fast Moving Consumer Goods), mobile telecommunications and pharmaceutical companies.
There are five main reasons why companies/manufacturers use canvassing methods:
1) To accelerate product penetration into the market.
a) By shortening the chain of distribution. Manufacturers do not use distributors as an extension to the market, instead do direct selling to retail outlets or consumers. Thus, no time is wasted due to the process of moving goods from the manufacturer’s to the distributor’s warehouse.
This method is suitable for small- and medium-scale business which operates only in one city or in a particular province/territory.
b) By accelerating the performance of distributors. Manufacturers employ canvassers and stationed them at the distributor’s place to help accelerate the distribution of products that have been purchased by the distributor. On the other hand, manufacturers could also require the distributors to employ a certain number of canvassers to do the job.
2) To spread products evenly throughout the sales territory.
In many cases, distributors are only interested in making profit and not give priority to spread the products evenly throughout the sales territory. From their side, the important thing is how the product can “move” quickly from the warehouse to retail outlets with a profitable margin. If there are one or two retailers that want to “accommodate” the whole distributor’s stock, then the distributor will gladly serve the transaction.
This is bad on the manufacture’s side because product spreading/the availability of product in the market is important so that it is easily accessible to consumers and to prevent monopoly by certain retailers.
All this can be avoided by applying the method of canvassing. Canvasser team will distribute the products throughout the sales territory as evenly as possible, thus, the product will be more easily accessible by consumers.
3) Trimming the price of product.
Without distributors, manufactures may sell products at a cheaper price because they won’t have to worry about setting a certain margins for them.
Aside from selling, canvassers can perform branding activity to build awareness by installing POS materials such as posters, flag-chain, hanging mobile, wobblers, flyers, shop blind, and banners at the retail outlets.
5) Accurate feedback from the market.
One important duty of canvassers is to build a database of his/her sales territory.
Basic data collected typically includes the number of retail outlets within the territory, size or outlet classification (indoor/outdoor, stalls, shops, etc.), outlet photo, outlet name, outlet address, name of person in charge at the outlet, outlet contact person, owner and birthdays (usually for retention purposes).
Regular data maintained and updated on daily/weekly basis includes stock level at the outlet (could be more than one type of product), the number of sales per product type, product type and quantity of new orders requested by the outlet, suggestion and/or complaints from the outlet or customers regarding products or services.
Data that is collected by the canvasser and submitted directly to the manufacturer will be far more accurate than relying on data or information from the distributors.
However, canvassing method does have flaws as described below:
1) High operational cost.
Canvasser’s salary, overtime and incentive should be the primary consideration when using this method. Is it comparable between the target versus achievement? In addition, each team of canvassers must be handled by at least one sales administrator, a supervisor and posibbly a manager, which further risen the budget.
2) Lack of control can be disastrous.
Canvassers could be negligence and end up loosing the products he/she carries, canvassers could mis-count the amount of money paid by retailers during sales transaction, the amount of money submitted to the sales administrator does not match with the quantity of products sold, and so forth.
3) The lack of training for the canvassers can lead to errors in delivering product information to retailers and consumers.
4) Canvasser can cause price fluctuations.
High demand may cause canvassers to sell a certain type of product at a higher price than what is specified by the manufacturer or that has been agreed with the distributor. Conversely, if the product carried by the canvasser is owned by the distributor, then with the permission of the owner, canvasser could sell the product below the specified price (due to over-stocking, etc.)
This practice leads to price fluctuations in the market that have a negative impact both for manufacturer and consumers.
5) Distributor becomes “lazy”.
With the canvasser team provided by the manufacturer, eventually distributors will feel that they have no burden to do the distribution.