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Wholesale Distribution Software: Leveraging Order Frequency to Increase Sales Revenue and Improve Customer Satisfaction

Tuesday, February 9th, 2010 by admin

Who is your worst customer?  If you are like most wholesale distributors and were to ask this of your inside sales team, they could probably tell you without blinking an eye.  “It’s ‘Fred’ – he’s always complaining and griping.  He just never seems satisfied.”  However, from a management team perspective, ‘Fred’ is a great customer.  He places consistent orders with you at a strong profit margin.

Does the following scenario sound familiar?  You and your sales team are having a monthly sales meeting.  It’s the middle of the month, and you’re reviewing the sales results for the prior month.

You look at the results and there’s one of your biggest customers – The ABC Company, who typically does $250,000 sales per month – showing last month’s revenue at $30,000.  You wonder what has happened to The ABC Company’s business.  It could be that The ABC Company’s business is slow; however, with this dramatic reduction in order activity, it is quite possible that one of your biggest customers may have gotten sufficiently annoyed with you that they quietly took their business and went elsewhere.

So, is there a way for wholesale distribution software to programmatically help prevent this from happening?  With TGI’s Enterprise 21 ERP software, the answer is absolutely!

Using Enterprise 21’s fully-integrated customer relationship management functionality, a customer order frequency value can be established for each customer.  Let’s say in this example, the order frequency for The ABC Company is set to 10 days.  Should we not receive an order from The ABC Company by the evening of the 10th day from their previous order, the Enterprise 21 system will automatically generate an alert notification to the parties you’ve specified in the system – the sales rep, the CSR, the inside sales rep, etc. – alerting them that this customer has not ordered within normal order frequency and that a follow up call needs to be made to them.

By proactively contacting this customer, you should hear one of three things from The ABC Company:

  1. We have been consuming your product at a slower than usual pace.  We’ll be placing an additional order with you in the next couple of days.
  2. We got busy and forgot to place our order.  You really saved us from getting too low on the stock of your products.  Let’s place an order right now.  We really appreciate you looking out for us.
  3. We were really displeased with how your company handled (fill in the blank) and we have been considering taking our business elsewhere.

In all of these cases, you have the opportunity to positively impact this customer’s satisfaction with your business.  Assuming you have effective problem resolution in place (a topic we’ll address another day – for now, see Service Management), numerous studies have shown that you can achieve higher customer satisfaction levels by resolving customer issues than with those customers who have never experienced any issues with you.

Order frequencies can also be set at a customer-product level, where, for example, some products or classes of products are ordered by a given customer every 10 days while other products or product classes are ordered every 30 days.

So, let’s rewind and go back to the monthly sales meeting.  In this case, The ABC Company has monthly revenue of $240,000 for the month.  When asked why their revenue had fallen off for the previous month, the sales rep can describe the issue that had occurred, how it was resolved, and the customer’s satisfaction with that resolution.  This is a far better scenario than the meeting where The ABC Company’s revenue was $30,000 for the prior month, may be $0 for the following month, and the assigned sales rep is looking for a new job by the next monthly sales meeting.

Nobody likes negative surprises.  And, wholesale distributors running Enterprise 21 will be able to discover and correct customer issues and keep sales revenue high and improve customer satisfaction through the use of Enterprise 21’s CRM software functionality with built-in order frequency features.


Extending CRM Usage to the Executive Level

Tuesday, April 21st, 2009 by Alex Smith

What if an executive could see into the future? What if an executive could see past the internal rhetoric to dig deep into the sales funnel or customer base and spot sales growth or dips well before they actually occur? Without question, this insight would dramatically impact the decision-making ability of the executive, as well as provide a more adaptable organization. While some may refer to this as the works of a fortune teller, the “crystal ball” exists today and is utilized by savvy executives in many small to mid-market companies. This crystal ball is far from voodoo or hocus pocus; it is the power of a strong customer relationship management (CRM) ERP software solution.

A business executive recently said, “I would give anything to be able to have visibility into my sales funnel and future revenue stream. In fact, I’d give anything just to be able to know what my sales representatives do each day and if they are actually making the sales calls they claim.” Given the amount of CRM capabilities that are available in the SMB market, this statement is surprising. While CRM was at its infancy stage years ago, the CRM packages of today are powerful.

In Enterprise 21, CRM is more than a module. It is fully-integrated into Enterprise 21 and reaches across the entire ERP suite. It is closely tied to online quoting and order management, accounts receivable, and even manufacturing and shipping. This holistic approach takes the usage of CRM from the sales force and extends it into the entire back office and the executive level. It allows CRM to become a tool for the entire organization.

When CRM data and usage is integrated into a decision support system, the daily activities of quoting, forecasting, and sales call reporting all become strong resources. These generic actions provide a consolidated view of the organization’s past and future activities.

In Enterprise 21, a CEO can see a wide range of information right from within his or her own personal dashboard. The dashboard not only provides information specific to the CEO’s needs, it provides it in the manner he or she desires and allows for further drill down or detailed analysis. This permits the CEO to view critical information such as sales funnel trending, anticipated revenue, and even a given sales person’s daily activities such as onsite sales calls, outstanding quotes, and newly entered sales orders. While this may be too much information for some, to the CEO who has four new hires, it may be just the information that is needed to know if a specific sales representative is delivering as promised.

CRM information can be extended even further to trigger alerts when changes occur in an existing customer’s buying trends. The worst customer is not the customer that constantly complains; the worst customer is the customer who quietly takes part or all of their business elsewhere without any notification or warning.

While Enterprise 21’s CRM functionality cannot change the customer’s communication style, the CRM module can warn of an unexpected drop or delay in a customer’s ongoing purchases or buying trends. While these CRM-based alerts are not necessarily a crystal ball, they are powerful and provide a means for facilitating proactive behavior on the part of the sales force or management team. Most importantly, the alerts and other dashboard information provide the information necessary to move the company from reactive behavior to much more successful proactive operations and communications.