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As a distribution company you have an opportunity to stand out from your more complacent competitors by enabling your customers to easily order from you, and track their orders online.
Small to medium-sized distribution companies are certainly not as quick to deliver this feature as the major online distribution houses. But your customers are used to ordering their own goods at home, having inventory and shipping information at hand immediately.
So, can your ERP system deliver when it comes to user friendly shipping and order information? Is it seemlessly integrated to your in-house system? Easy access to shopping carts, inventory status and shipping information is what your customers live with in their personal lives. Do they want to step “back in time” at the office?
Its time to involve your customer in your ERP solution.
Tags: ERP, order, track
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Our previous posts in the current series on “Building More Profit In Your Distribution Business” covered pricing, inventory, warehouse management, customer relationship management, and customer order tracking.
Data is flowing to and from your customers, vendors, administrators, salespersons and operational areas. Data is flowing to and from from your ERP systems, your CRM system, your website.
The key to make all this work is integration.
When an order is entered in your ERP system, you don’t want to spend the extra time and money to enter it again into your CRM system or if it came from your website, you don’t want to then enter it into ERP and CRM…too many hands on one set of data.
Compounding the problem of multiple systems and different roles within your company that need access to accurate data is the existence of different devices.
Servers. Desktops. Laptops. Smartphones. Tablets. Voicemails. Emails. There are lots of different touch-points where data is coming from and going to.
Can you take all the pieces you have in place and connect them? For the best return on investment, laborious custom tasks should be reduced to a minimum.
An experienced systems integration company working with a state of the art software solution can turn your disparate systems into a seamless whole.
For today’s profitable business, using one solution with all the necessary pieces will keep administrative costs, maintenance costs and operational costs at their optimum lowest level.
And your customers, vendors and employees will have all the data they need at the right place and at the right time.
Tags: disparate systems, integration, multiple systems
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Inventory Management is the number one reason distribution business owners buy software. But Customer Relationship Management should be the number one reason distribution business owners buy software.
In our last “Building More Profit in Your Distribution Business” post, we discussed the need for warehouse management in your software solution. Managing inventory, warehouse by warehouse is important, but only if you have the sales that are actually looking for the inventory.
How will you track sales and your sales pipeline?
How will you keep track of all the leads that come into your business from the marketing department? How will you track the conversations your sales people have had with your prospects? How will your sales people prioritize the time they spend with their prospects? How will your marketing department know which prospects need further marketing?
If sales is the lifeblood of your company, then you need a ready answer to these questions.
That’s why CRM software should be your number one priority
A robust, professional cloud-based or in-house CRM system enables you to:
- Track customer activity: conversations, emails, information they’ve consumed, meetings they’ve had with you.
- Track sales person’s activity: prospecting calls, follow-up calls, nurture marketing activity, demonstrations and meetings.
- Market to your prospects: determine which prospects are cold and require educational marketing, and which prospects are further along the path and require more trust-building marketing.
In other words, a CRM system helps you take control of your sales process, just like an ERP system helps you manage your inventory management process.
Make acquiring a CRM system a priority
You manage your Inventory with your ERP software. But you’re not in business to move inventory from one warehouse to the other. You want to sell it. This is the purpose of your business.
So make CRM software a priority now.
Tags: crm, distribution business
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If a distribution company with multiple warehouses had a Facebook page, what would its relationship status be?
“It’s Complicated.”
In our last “Building More Profit in your Distribution Business” post, we discussed inventory as the number one focus of small business owners with their software searches.
You might be a wiz at using your current software, or Excel, or even index cards, to control inventory in your one warehouse. But add an additional warehouse, or two, or three, whether they’re virtual or physical, and your current system breaks.
Can your current software keep up?
Your inventory could be spread across warehouses, or you might store different items in different warehouses. You might have two or more warehouses.
But do you know what are your committed, on hand and on order counts across all your warehouses are?
Can your current system handle this? If not then it’s time for an overhaul.
Conclusion
A modern ERP system can easily help you take control of inventory not just for real-time numbers and forecasting accuracy, but over several warehouses.
If you’re running multiple warehouses and your software isn’t specifically designed for this, then it’s time to get new software.
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Want to know how to lose a customer? Sell them your product, and then tell them you can’t ship it for weeks because it’s not in stock.
For a distribution business, over-promising and under-delivering is an inventory problem.
In our last “Building More Profit in your Distribution Business” post, we discussed the importance of incorporating your own pricing formulas into your software. But, as every distributor knows, you can price properly and sell more, but without accurate inventory counts, you can’t make accurate promises and can’t deliver on time.
Does your software help you manage your inventory?
Inventory control is the top reason that owners of distribution companies shop for new software solutions. Many times, their current in-house systems have capabilities around inventory that can solve inventory status problems.
But modern ERP systems were designed with inventory control as a core functionality, in addition to accounting and pricing.
But maintaining inventory counts to provide the high visibility you need to gain and maintain customer trust in your delivery promises has to become a priority.
Is inventory control a priority for your Operations Department?
To keep inventory visible and forecasting accurate you must re-establish in-house priorities and demand real-time data on the following:
- Purchase orders
- Receipts
- Shop floor control
- Order entry and
- Shipping data
Your staff and managers must make collecting and entering this data into your ERP system a priority.
Get inventory under control and differentiate yourself
The good news is, your competition probably does not have accurate control over their inventory. Or if they have, they made not be using it to improve customer service.
Many ERP systems enable you to extend real-time inventory information over wireless networks, so your distribution sales staff can provide on the spot and accurate inventory counts to your customers while on-site.
Conclusion
In the distribution business, not only does pricing make or break your business, but so does inventory control. An accurate, real-time view of your inventory allows you to project inventory levels into the future, and avoid over-promising and under-delivering.
A great way to keep your customers loyal, and differentiate yourself from the competition.
Most modern ERP systems provide inventory control as a core functionality, in addition to pricing and accounting functions.
If you’re in the distribution business and you don’t have an ERP system yet, you should probably get one ASAP.
Posted in Inventory, Profitability Series, Tip of the Week No Comments »
Pricing can make or break your distribution business.
But it’s one of the most complex parts of your business. In this ultra-competitive business climate you need to make sure you’re priced competitively, while handling other complexities such as volume pricing, customer-specific pricing and vendor-specific pricing.
Keeping track of all the moving pieces can become a full-time job.
The Importance Of Price Management
Your distribution business relies on competitive pricing. You also may have contract-specific pricing, and may also offer vendor-specific specials. Your sales people may have negotiated special pricing in order to bring on a new customer, or close more business during the last day of the quarter.
Managing pricing specifics has never been more important for a distribution business.
Many companies use spreadsheets to manage their pricing. But keeping track of the different versions of spreadsheets across your company can be overwhelming, especially when you’re trying to decide which version contains the current pricing formulas.
ERP Systems Make Price Management Easy
Enterprise Resource Planning (ERP) software systems provide the answer.
You can add complex formulas for customer-specific, vendor-specific, and volume pricing to your ERP system, so when your customer places an order the correct price is automatically calculated.
But ERP systems add an additional element: the trust factor.
Instead of chasing the latest Excel spreadsheet with the correct formulas, an ERP system is always up-to-date. As the common industry buzzword states, an ERP system contains the “single version of the truth.”
Conclusion
In the distribution business profit margins can be razor thin. Pricing items too low can erase profits. But commoditization and globalization also means slight differences in prices could mean the difference between competitive success or failure.
An ERP system provides the answer. These are sophisticated systems that take complex pricing formulas and automatically apply them to your ordering system.
If profitability in your distribution business depends on complex pricing arrangements, you should seriously consider implementing an ERP system
Tags: erp systems, pricing, profitability
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So you have the right contact info, you know all the right history. Your software should let you proactively reach out to your customers with the right message at the right time.
Now you can let the client know that it is “re-order time”, “pay attention time” or just “say hello time”.
But can your software really do this?
Treating customers right can benefit your customer and your sales
Armed with your customers’ information, you can individualize communications to customers to let them know they’re special, and at the same time drive repeat business with them. Special pricing, special promotions and “special client” programs that thank your customers while doing what you really want – selling to them.
Modern CRM packages allow you to dynamically adjust pricing and present offers based on sales history, profit history, and vendor pricing, allowing you to reward your best clients.
But you’ve got to have the right software
Yes, salespeople work hard to manage this “best price for best customer” relationship, but that’s an extra burden on them. They should spend their time selling instead of trying to analyze their customer history. That’s the role of a modern CRM application.
But if your software can’t deliver these numbers to you proactively, in very real time, its time to revisit your software.
Next Steps
What are your next steps? Will you continue to guess who are your best customers, or spend endless hours manipulating spreadsheets so you can get this information? Or will you invest in a state-of-the-art CRM system that does all this for you? Talk to us about what a CRM can do for you.
Tags: crm, customer relationship management
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In our previous blog post we discussed the importance of knowing your customers’ history.
Now this is where it gets interesting.
Did you know there’s gold in your customers’ records? Are you mining for that gold or just letting it sit there?
Most modern software systems will allow you to slice and dice the data you collect on your customers’ purchase history in ways that allow you to see new patterns and possibilities.
What the data tells you
Is it time for your customer’s typical monthly order? Are there new products that your customer might be interested in, based on previous purchases? Are vendors passing down savings for bulk or repeat business that certain customers would like to know about? Has someone been out of touch for too long?
The right time to use this data
In addition to slicing and dicing, many systems will allow you to set up “alerts” that allow you to take advantage of timing triggers so you can take advantage of this new data, to benefit both your customer and your company.
Are these “alerts” easy enough to set up in your current client management system or is your staff haphazardly checking (or not checking) these records in a far too tedious manner? Are you spending too much time looking at “normal events” when you should be honing in on the “exceptions” that really deserve your attention?
Newer software solutions can easily select, alert, email and track responses on all of these pro-active sales efforts.
Are you ready to mine for gold?
Tags: business intelligence, customer data
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In our previous blog post we discussed the importance of identifying all the contacts within your customer’s organization. Get to know who all the players are, and expand your relationships within the companies you do business with.
But you can go beyond that. To really deepen your customer relationships it’s important to know their history.
How much do you know about your customers?
Do you manage every contact you have, including every prospect, every reference and every client? Do you “touch” these connections in a user-friendly, value-added manner, spreading knowledge and good will?
Can you easily find every contact you have ever had with these prospects, references and clients – what they have bought or sought, proposals you have given, prices you have charged, items purchased and the when and where of them?
Making your customers feel special
Knowing your customers’ history makes them feel special, like when you greet an old friend.
When you meet an old friend at the store, you can pick up where you left off. You ask them how their mother is, how their kids are doing, how the new job is treating them.
Knowing your customers’ history, with the help of a modern customer relationship management application, can help you generate the same effect: like you’re meeting an old friend.
You can make your customers feel special.
The soft benefits and the business benefits
Knowing this information can help you with the soft benefits of generating good will, letting your customers know you care, and engendering loyalty.
But there are some solid business benefits as well. Knowing their purchase history with your company, for example, can also help you predict how often they’ll buy in the future, and what else they might want to buy.
You can then focus your marketing efforts on current and past customers, increasing sales to your current customer base, without the attendant expense of acquiring new customers.
Maintaining your customer knowledge base is as important as maintaining your financial records. Maybe its time to devote more resources to client management and less time on rote, automatable bookkeeping tasks…
Tags: crm, customer history
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Does your “contact” list have the contact name that you think it has? Are you sending product sales information to the Accounting Department contact instead of the President of the company? Do you invest marketing funds, sales efforts and any effort at all, reaching out to people who are no longer with a firm or just non-contacts for the purpose of your efforts?
Do you know who your customer really is?
Does your current customer contact software allow you to store different names of important people within your customers’ organization?
Do you know who the buyer is? The buyer is the gatekeeper to your product within your clients’ organization. Make sure you know whom she is because she can block you from ever selling to her company again.
Do you know who the user is? The user of your product or service is the one who enjoys the benefits of what you sold. Keep this person happy and you make the company happy, and you keep future sales flowing. This person can also refer new customers to you, both within and outside of their organization.
Do you know the users’ boss? The users’ boss is usually the person who approves the budget for your product or service. Also, the happiness and productivity of their employee affects their whole department.
Do you know who the accounting person is? It might be important to know the person who handles the accounts payables, don’t you think?
Is this info integrated throughout all your touch points?
In the real-time world in which we live, you need the ability to make instant decisions. If a customer service emergency escalates up to you, can you access all this information through your smart phone so you can get an instant view of your customer’s history?
Do you have everybody’s email address so you can continue to market to them?
Do you have access to all their social profiles? Many customers prefer to communicate via Twitter or Facebook. These tools can also provide valuable background information for research purposes.
Your software should integrate your customers’ information through multiple touch points. If your customer contact software doesn’t allow you to identify your customers’ names, and allow you to integrate all your touch points and their social profiles, you should consider moving the money you currently invest in advertising to managing your existing clients instead.
Tags: crm, customer relationship management
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