Why Adopting CRM is a Wise Choice for Wholesale Distributors
Do you ever think about how you managed life before the adoption of certain technologies? Researching information on a topic took used to take a large amount of time, which could have included a trip to the local library. Now we go to the Internet for instant information. Or how about life before the mobile phone—let alone a smart phone—where you had to plan out when you were going to contact someone. Now it's second nature to contact someone anywhere.
So how is it that you've managed your customers in an ever-changing environment without the adoption of key technologies? In the wholesale distribution (WD) space, there are almost 700,000 companies in North America distributing products and providing other services to their customers. How do differentiate? Customer service. But how do you manage the service you give your customers? How do you get the full picture of what's happening with your customers with all of the touchpoints you have with them? How can you see if you're successful in managing these touches?
We know the old rule of thumb that it's easier to keep a customer than to find new ones. And that likely 80% of your business comes from 20% of your existing customer base. So how can the adoption of a new technology better manage your customer relationships? What would it be like to ask yourself, "how did we ever manage before"? Let's look at how a customer relationship management (CRM) tool can help WD companies better manage their customers. We'll also look at how a CRM that's part of a full, integrated suite of applications is even better than a standalone solution.
- Customer 360-degree view: At the base of all business are the customers. We wouldn't be in business without them. In an ideal world, all information relating to customers would be found in one place, so that we could get a full 360-degree view of the services and touches we have with them.
- Contacts: Within each company we do business with, we have contacts. Who's the purchasing manager at Customer Smith? Who do we need to contact in the event of a payment collection? The question to ask is yourself is whether you're maintaining these contacts in a Rolodex or even in a standalone contacts database. If so, how does this tie in to your customer record in your ERP application? How can we connect contact information with actual invoiced transactions?
- Communication: A key success factor in any relationship is communication. We all know that. In business, communication could be a conversation with or an email to our customer. Do you have a centralized view of all communications? Can multiple internal parties access the email correspondence with a customer in the event that the primary person is unavailable? Think about how effective your team would be if they could review marketing and sales emails, as well as transaction-related emails. Think of how valuable this information would be if it was in one customer record.
- Marketing: You know who your customer is; you know the products that they've bought in the past, and now you have a new product line that you want to communicate to a targeted audience. Can you send an email campaign to your customers? Can you track the success of these marketing initiatives by accumulating the sales as a result of this campaign? Imagine doing all of this in one application.
- Support: Another key success factor for WD companies is offering high-quality support to their customers. Support could range from answering questions about a shipment to recording problems with the product. How are you keeping track of these interactions? What are the most common requests? Which customers require more support than others? What if you could answer these questions, and what if a customer service representative could answer this question in the same record that contains a customer's order history?
- Customer Self Service: One last customer service point that I'll mention is giving customers the option to service themselves. We all know what it's like to be on the busy end of a day and have to make an after-hours queries. Imagine if your customers could look at their account balances, view open orders and even contact support from a self-service portal. To the small- to mid-size distributor, this can be a differentiator that can set them apart from the competition—at the same time it adds value for their customers.
A CRM solution will help you manage your customer and all of the touches you have with that customer. It will help you manage your contacts, and your communication. It will help you market new product offerings to your customer base and be intelligent and focused about it. It will help you manage customer support, and it will also give your customers the option to service themselves. This is not to say that all CRM tools are created equal. You'll get a centralized, 360° view of your customer if your CRM system is also integrated into your ERP application. This is most effective when they are the same application and built with the same architecture. This is how you can get sales and service information linked to back office transaction records like invoices and payments, all centrally organized. From this central information you can get business intelligence on your customer and customer base, which will guide you through the competitive WD market.
After adopting an integrated CRM application, you'll ask yourself how you ever managed your customers without. You may even compare it to life before the Internet!
Posted on Fri, July 23, 2010
by Steve Bisset filed under