Integrated Order Fulfillment Will Make Your Employees Happy, Increase Customer
Loyalty and Reduce Costs
By Jerry Sparger, Founder and CEO, Global Business Solutions, LLC
Why do they make it so hard to buy?
Many companies make it difficult for me to buy from them.
Whether I am spending a small amount for personal use or a large
amount for business use, my experience is the same: Inattentive
salespeople, computer-attended endless-loop phone menus and
indifferent customer service representatives. I sometimes wonder
if companies really want my business. If so, why do they make it
so difficult?
As a business person, I realize companies need to increase
revenue and manage costs to grow profit. Any way to increase
revenue without excessive sales costs should help my business.
To that end, I recognize that it’s cheaper to keep customers
coming back than chase new ones. I think of all the things that
take time away from selling or make it hard to get from a “yes”
to a contract; they cost money and customers. If you can’t keep
customers happy at a reasonable cost, you aren’t likely to stay
in business. Yet not all businesses operate as though they hold
that same tenet. They should.
Here’s an effective approach to gaining customer loyalty while
managing the cost of customer acquisition: Create a seamless
customer interaction that allows the customer to spend the least
amount of time to get the right products, at the best value, in
the shortest possible time, with the best support. In other
words, make it easy for them to buy!
‘If your sales staff is stuck researching this information for
the customer, it is taking time from selling, negatively
impacting revenue generation.’
Providing real-time inventory and order information makes it
easier for your customers to buy from you. Not having real-time
inventory and order information available to customers makes the
buying process more difficult for the consumers and reduces the
likelihood they will buy from you. If your sales staff is stuck
researching this information for the customer, it is taking time
from selling, negatively impacting revenue generation.
A good business strategy, focused from the customer’s
perspective, will put in place the tools to improve the way you
interact with your customer. This strategy has three components:
- First, identify your customer’s optimal buying experience.
What would make it as easy as possible for your target customer
to buy from you?
- Second, define the strategic goals and objectives that would
provide your customer with the optimal buying experience.
Everyone who “touches” or has an impact on customers should have
activities and metrics that help improve the buying experience.
Optimize communication flows around the way your customer seeks
information. Tailor business software to facilitate good
customer interaction.
- Third, implement your strategy and monitor customer feedback,
making mid-course corrections as necessary.
Lost sales
Consider a Chattanooga, Tennessee-based media production company
that sells its products over multiple channels, including the
Internet, telephone, mail and fax.
Several years ago, the company was not meeting its revenue
goals. Most of its business at that time was in-bound telephone
orders. It saw a drop in sales per call at the same time as it
was becoming clear that the Internet was a good sales channel
for its products.
Executives assessed their situation and realized they hadn’t
evolved from a mail-order company to a robust, Internet-age
retailer. They needed to provide their customers with an
e-commerce buying experience while continuing to serve the many
customers who still placed phone orders. All customers,
regardless of how they contacted and did business with the
company, were expecting the same speed and flexibility. They
wanted to place orders quickly, to have access to order status
as the order was being prepared and to be able to dynamically
change orders up until time of packaging.
But the order-entry department was not tied to order assembly,
packing, shipping or billing. Therefore, people working order
entry had no effective way of helping a customer determine the
status of an order or dynamically changing that order up to time
of packing. They also had no way to confirm that the desired
items were available to be ordered. This resulted in orders
taken that could not be fulfilled by the stated promise date.
They could not easily cross-sell or up-sell; an important
revenue contributor. Orders were canceled or worse yet returned.
Orders were typically small in dollar value but containing
numerous components. The company could not cost-effectively use
customer service to chase down material availability or order
status. That information was found in other departments. Because
customer service did not have real-time access to all customer
and order information, reps were having difficulty providing
customers with order status accurately and cost-effectively.
No matter how many people the company hired, the process wasn’t
getting better because the business was without a
customer-centric business strategy. The organization was
overstaffed and inefficient.
Executives realized they could address some issues by adding
staff and shortening communications paths among customer-facing
personnel. However, they recognized that such an approach would
be cost prohibitive and would become more so as the company
grew. These measures would not be able keep up with the
real-time pace of the Internet. New people or communications
improvement would not provide the necessary real-time
information. To address these issues, management decided to
revolutionize the company’s customer strategy, tearing down
departmental boundaries and implementing business software.
The company estimated the implementation cost of integrating the
entire order-fulfillment process at $100K, with ongoing costs of
about $20K per year, offset by increased revenue. Everyone
involved in serving the customer had real-time access to
information and the ability to act upon it. Internet customers
and telephone-order-entry personnel had accurate real-time
information of inventory availability, ensuring that an order
could be filled as expected. They eliminated communication
errors in communication across activities, thereby ensuring
shipping accuracy and billing accuracy. Internal waste was
eliminated.
The result? Business doubled with no additional staff.
Helping your customer will help you if you develop your business
strategy with the goal of getting everyone involved in helping
the company sell – and doing it to improve revenue. Simply put,
you:
- Minimize sales and sales support costs.
- Improve customer loyalty.
- Make more money.
What could be better?
Jerry R. Sparger is Founder and CEO of Global Business
Solutions. He has more than 40 years experience creating
innovative solutions to business problems. Jerry has held senior
and executive management positions as well as specialized in new
ventures and turning around struggling business units. Since
founding Global Business Solutions, he has not only led the team
in providing valuable solutions for clients, but has also served
as chief intellectual architect, creating and perfecting
methodologies, authoring numerous articles for national business
publications, lecturing and speaking to audiences across the
country. For article feedback, contact Jerry at
jrsparg@gbsonline.net
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