Sales Strategy (organization, size, sales process, staffing, training)

Industry Analysis

Size:

-Local Company, Headquarter 3605 SE 21st Ave Portland, Oregon (Buzzfile).

-Sock It To Me has around 11-50 employees (Keep Up With Sock It To Me).

-Market Research reported in 2014 that the global sock market is valued at 5.6 billion dollars. This number was expected to increase by 8.5% from 2015- 2023 (Home).

-The global sock market is segmented by specialty socks, athletic socks, trouser socks, womens socks, casual socks and others.

-The key players that currently dominate the sock industry are as follow:

-Adidas Group

-Puma SE

-Nike inc

-Asics Corp

-Thai Socks Corporation

-For the purpose of this project we will be covering specialty socks, trouser socks, women’s socks, and casual socks.

Competition:

-Depends by market, but SockSmith and Stance are the main competitors.

-Socksmith is more based on the novelty print aspect, whereas Stance is based on the aspirational distribution channels.

-Socksmith was founded in 1988 in Santa Cruz, California. In 2007, after they spend years speaking with their customers to get a better idea of what sock ideas that were wished to be sold, they in turn wanted to create a better artisan brand with a West Coast point of view. Which was how they became even more successful and have hundreds of stores nationwide (Socksmith Designs).

-Stance started making socks six years ago in 2011, but have accumulated $86 million in funding and a $50 million series C from investments from celebrities such as Will Smith and Dwayne Wade. While famous fans include LeBron James and Rihanna (Nagy).

Key Players:

(Image Iwa ppt).

Macro environment:

Trends and drivers:

-The gift market.

-Shoe Stores

-Selling at bookstores such as Powell’s, since that was a great opportunity.

-Novelty socks are becoming popular, as people are tired of wearing plain black and want to stand out (Satenstein).

- Driving individual fashion creating a consumer good that makes them stand out (Sock It to Me).

Company Analysis:

Profile:

Sock It To Me is a company located in Portland, Oregon, and founded in 2004/2005. They mainly operate in the Women’s Accessory and Specialty Retail stores within the Apparel and Accessory industry (Buzzfile). Sock It to Me socks and underwear has expanded around the globe. They still hold true to their statement of, “Be nice and play hard” (About). They now ship internationally, roughly seven percent is international. The company originated out of a simple messy bedroom desk and is now become 4,000 wholesale accounts. They now also boast 400 original designs and over 40 employees. The socks are designed locally through design contests and the Sock It To Me team; however, you can personally design a sock as long as you purchase 1200 pairs. All socks are made in Korea and undergarments are made in China (About).

Sock It To Me cultivates an incredible business environment. They prioritize giving back to the community and creating long lasting relationships, particularly within the community. Sock It to Me welcomes and enjoys requests for donations. Donating fulfillment can take 4-6 weeks to process; therefore, they request as much time as possible in order to produce the products. Past donations include the following:

• Janus Youth Programs

• Street Roots

• Transition Products

• Camp Fire Columbia

• Cat Adoption Team

• Ask Wellness Center

• Portland Public Schools

• Join

• Achon Uganda Children's Fund

• “ I Have a Dream” Oregon

• Project Lemonade

• Bridgtown

Every year in the fall, Sock It To Me creates a contest to help ensure the latest and trendiest designs. Sock It To Me uses the design contest as a way to not only gain new designs, but also further connect themselves to the community. The contest winners are decided by celebrity judges ranging from NBA players to a cat. They have received 5000 designs from 75 countries and over 7000 people voted on their favorite designs. Last years winning socks consisted of “Deep into the Sea” as first place followed by “Yonder Castle”. The first place won a cash prize of $2,000 and their design will be manufactured on real socks and they will receive 15 pairs of socks from their current line. The second place receives a cash prize of $500 and ten pairs of socks. The third prize winner receives $250 and five pairs of socks (About).

Performance:

-The company estimates to generate around $210,000 in annual revenue (Buzzfile).

-They sold half a millions pairs of socks back in 2011, at about $9 a pair (Zax)

-Experience a 27% increase in 2016 from 2015, and project a 20% increase in 2017 (Iwa ppt).

(Image Iwa ppt).

(Image Iwa ppt).

Marketing:

They Market themselves on social Media such as: Facebook, twitter, Instagram, Pintrest, and youtube.

The Contract a network of 1099 sales agencies (independent sales reps) across the country who have showrooms in critical cities where fashion markets take place, and they service those geographic territories.

-Made sense for reps to service bookstores, and it was an opportunity since no one knew that bookstores could sell socks.

-No brick and mortar stores, so trade shows are their main bulk of sales (Asher)

-90% wholesale and 10% online

-Can be found locally at New Season Market, Powell’s Bookstore, Naked City Clothing, Sock Dreams, Present of Mind, Buy Olympia or on their website (Asher)

-Contract 11 Regional Sales Agencies to service special accounts in specific geographic territories and channels.

Sales Strategy:

Organization:

-Organized by territory right now, but there are a few overlaps in key areas, certain markets

-There are few territories that overlap, such as gift line wrap, where the majority of the business is

done, and an apparel rep and a bookstore rep are also involved.

-Majority of the business sales, are done in the US Domestically at approximate 84%

- 7% is done internationally

-Sock it to me has has made 50% of it Revenue generated by their 11 sales agencies that are Grace by Catherine Sullivan, Just Got 2 Have It!, Kris & Company, Stated, Chickman, JBrandes, Harper Group, NE Pub Reps, Dandylines, Twist, Montage.

-Bookstores - College bookstores, lease operation

-Blog

-University (main) direct sales

-Different sales groups for different markets

-3 people a group ( call on store/ answering questions), no checking everyday

Sales Process:

-7 people in sales group but have 4 total now for 4 years

-Different combinations of groups

-4 people a group to call，plan，goal

-Goal = to open account

-Main job is to increase sales within the store

-Different festivals have different sales themes

-No more new store plans

Staff:

-40 full time employees, that includes the distribution centers.

-With the contracted agencies there are 75 account managers out in the field.

-2 corporate account managers

-50% of the company is serviced by contracted sales reps, and 50% is owned by in-house account managers.

-With the contracted agencies there are 75 account managers out in the field. They service between 75 and about 2,200 accounts.

-Fewer accounts, wider geographic territory.

-Spend a lot of time in their car-nature of serving the specialty retailer as they have to be in the stores and being the ____(?).

Train:

-Coaching, day to day sales process

-How to position sales pitches

-How to do customer research

-May send them out to external resources for training, but not there yet.

(Image Iwa ppt).

Sales Operations (compensation, territories, quotas)

Compensation:

-For contracted sales reps, it’s commission based

-Commission rate is 15%; standard for industry

-In-house team all base salary

-The main incentive is the vacation trop everyone gets to go on.

-It’s a universal if revenue, goals are hit. Get to go on vacation, all expenses paid plus

one.

-Fun perk for everyone in the company because while managers are managing operations, it takes everyone in the building to achieve goals.

-Once top-line sales goals are achieved, everyone in the company gets to participate in profit sharing

-Not really anything specific for the sales team in terms of an incentive plan.

-But they are looking to develop sales specific incentives.

Territories:

-Out side sales 13 western states (Greg)

Quotas:

-New, as of this year

-Top-down exercise with a bottoms-up exercise: have salespeople look at their accounts, and build sales plans for each one. Setting strategy to achieve plan, very involved.

Sales Management:

Leadership:

-Laid back family oriented from a company that began in a garage. Daily coaching and sales process, to postion sale pitches and customer research training. Potential external resources for training. Quarterly meetings are set to celebrate team accomplishments and individual sales achievements. Motivating sales reps with their earned commision.

Forecasts:

-Iwa is the Head of Sales for Sock It to me her responsibilities are forecasting and budgeting, developing teams and new business development strategies Sock It To Me company has a steadily grown within the years. In 2016 The company had a 27% increase over their previous year and they projects a 20 % increase in 2017. It will continue to grow and seek agencies among further international sales in the future as they reach geological expansions in other areas in search of revenue growth. (Iwa ppt).

Evaluation:

-Upon further evaluation the company has had a substantial growth with no recorded decline. They are intuitive organization that encourages individuality and creativity. This company is very down to earth, they promote from inside. Their business strategy is very simple and We have evaluated how they motivate their employees through well incentive commissions and plus one vacation trip with the company. The company cares for its employees and gives them an appropriate work loads and consideration.

Secondary Research Conducted

The beginning of the business started with Carrie Atkinson. She began the idea of selling socks when she was living in Korea while teaching English. She saw a market of silly socks that gave her the idea to buy and sell them in Saturday Markets in Portland. She Tapped into a growing trend, and went to a Las Vegas Trade Show in 2007. The rest is history, as the company gains 90 percent of sales come from 3000 wholesale customers (Broadsky). Todd Lemmere is the director of international Sales. In hopes to expand the company internationally to the United Kingdom, Scandinavia, France, Italy, Japan, China, Mexico among other countries. Sock it to me is now a $5.9 billion industry. The company is now attempting to expand by selling underwear as a new product. The advantage of the industry is that it is not reliant on seasonal sales as its competitors. (Broadsky)

Client Interviews Results

-Based on the client interview with Iwa Hooe, it appears that Sock It To Me is an organized, but easy going company that focuses on growing together and improving. As it is a big effort and value of theirs to make a built community, include all employees and taking care of each other. They appear to be well structured domestically, selling in bookstores such as Powell’s, and other stores such as: Fuego, Sock Dreams, The Sock Shack, and many others. Their contracted agencies selling in key territories/markets is another factor as to how they become successful as the gift market has exponentially expanded. Also, partnering with sock stores is Sock It To Me’s second largest group of retail partners with their own original accounts. There is a lot of effort that is put in to motivate employees through many means to help further their culture and the company’s overall success.

-From Greg Chickman’s interview, it gives more of an insight of what a sales rep does, compared to a sales manager, since they travel and sell to a wide variety of locations, such as bookstores at colleges and different markets. Greg did also mention the hiring process of recruiting new sales reps, as well as the steps of those who work as outside sales reps in order to gain new accounts. Greg has worked in sales industry for over 38 years mostly in food and clothing industry and now he has worked over 4 years as a commissioned sales representative for SockItToMe. Currently, Greg works with a team of four people whose goal is to open new accounts and increase sales through the bookstores by increasing product visibility and better product placement. Greg explained us that working as a commissioned sales representative has given him more freedom and flexibility. There is a great understanding between the team members. He also said that the they hire people mostly within the industry who are well knowledged about the product and market which allow them to take more initiatives. Therefore, there are less turnovers.

Preliminary Findings:

-Our preliminary findings before doing any research or conducting interviews was that the company Sock It To Me sold colorful, crazy and fun patterned novelty socks, as well as underwear now. The socks could be found in stores such as Powell’s Bookstore, and a few other places in Portland. Granted, we didn’t really know much else about Sock It To Me. After conducting the two client interviews, as well as our own research, it turned out the company is actually quite successful with an organized salesforce, and a caring culture helped contribute to their overall success since 2004. Sock It To Me is based on hard work, and dedication through encouragement and motivation of their employees who are still around even after 13 years. This indicates that Sock It To Me has created a unique culture with very low turnover rates, and has most likely been a key factor in their success as they continue to inspire to push their employees out of their comfort zones, but still help them along the way. From the interviews, we also learned more about how their sales structure was organized, and the tasks they undertook to increase the revenue.

Next Steps:

-Split up the research paper sections

-Continue to do more research

-Finish each section by a given deadline

Work Cited

Asher, Abe. "Success That'll Knock Your Socks Off." The Dig. N.p., 05 June 2014. Web. 4 May 2017.

Retrieved from

https://theaardvarkdig.com/2014/06/05/success-thatll-knock-your-socks-off/

Broadsky, Rivkela. "Portland State University - Single Sign-On." Web Login Service. N.p., 4 Sept. 2015.

Web. 4 May 2017

Buzzfile. ”Sock It To ME." In Portland, OR - (503) 419-6428 - Company Profile. N.p., n.d. Web.

4 May, 2017 .Retrieved from http://www.buzzfile.com/business/Sock-It-To-ME-503-419-6428

Keep Up With Sock It To Me. LinkedIn. Web. 8 May, 2017. Retrieved from

https://www.linkedin.com/company/sock-it-to-me

Nagy, Evie. "This Company Raised $86 Million To Revolutionize The Tired, Boring World Of Socks."

Fast Company. Fast Company, 18 Apr. 2017. Web. 6 May, 2017. Retrieved from https://www.fastcompany.com/3048263/this-company-raised-86-million-to-revolutionize-the-tired-boring-world

Satenstein, Liana. "Novelty Socks Are Fashion's Newest Necessity for 2016." Vogue. Vogue, 31

Jan. 2017. Web. 6 May, 2017. Retrieved from http://www.vogue.com/article/novelty-socks-fashions-newest-accessory

Socksmith Designs-- A Little Sock Company From Santa Cruz. Web. 9 May, 2017. Retrieved

from https://www.socksmith.com/company

"Sock It to Me." Sock It to Me Blog. N.p., n.d. Web. 3 May, 2017. Retrieved from

https://blog.sockittome.com/mens-style/

Zax, David. "How Cute Socks Conquered The World." Fast Company. Fast Company, 08 Aug. 2012.

"Home." Size and Forecast by 2023. N.p., n.d. Web. 11 May 2017.

Web. 3 May 2017. Retrieved from https://www.fastcompany.com/3000223/how-cute-socks-conquered-world