Margins are tight in the distributive trades, so it is crucial to examine all your systems and processes to gain cost efficiencies and to sell as profitably as you can. However, in many companies, there is waste associated with back-office sales processes. So how do you know if your systems are as efficient and effective as possible? Find out how to sell profitably below.
Ask yourself:-
How quickly can you find important sales information?
Research shows that, even with electronic systems, people typically waste 30 minutes a day searching for documents. Multiply that by each of your frontline sales staff and you can see how inefficiencies can add up.
Imagine that a customer calls in with a request that goes something like this: “I want a repeat of that order I had back in September last year – but this time, I need it delivered to my sister company in Scotland.”
For your staff to process the order, accurately, and on the spot, they need to:
- find the customer account and identify the order
- see whether the goods are still available and in stock, and identify alternatives if not
- know how much was paid, whether a discount was applied, and whether the discount is still valid
- find the Scottish address, see whether it is part of the same customer account, and check the customer’s credit status
That is a lot of disparate information to track down. And what if the original order was made via the trade counter, instead of on the phone? The difficulty increases in a multi-channel sales environment. If sales information isn’t instantly to hand, you may also be missing opportunities to upsell or add value to customers’ orders.
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Is sales information sometimes missing?
Suppose that the customer then says “I had an incomplete delivery last month, so I’d like to use the credit to pay for this order.” It can be hard to find the evidence to support - or counter - a claim like this. Many proof of delivery systems are paper-based, so even if the driver has retained and submitted the correct document, properly completed and signed by the right person, it needs to be accurately entered into the system, and converted into a credit note on the account. One study found that large organizations lose a paper document every 12 seconds, and PricewaterhouseCoopers estimates that 5% of all hardcopy records are lost or misfiled. Even in electronic environments, there are multiple touchpoints where errors can occur. Again, this could add up to substantial losses for the business.
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How is your sales information formatted?
84% of invoices enter processing in formats that include paper, fax and email attachments, which require manual conversion to enter accounting systems. This can be expensive; the average cost of manually processing a sales document can be around 5 times as high as for automated processing. This is valuable time that your back-office staff could be using instead to prepare management reporting and sales analysis, to help you drive your business forward.
To sell more profitably in the distributive trades requires investment in systems and processes. A fully integrated trading and business management system, that gives you end-to-end visibility of the business, will reduce manual processes and prevent errors, and enable you to access your business information in an accurate and timely fashion.
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