How Distributors Improve Customer Retention A common rule of thumb in distribution is that it…
Top Four Goals for Distributors in 2017
2017 is a year of great opportunity for the distribution industry, but also offers its share of challenges. Distributors are worried on many fronts – declines in spending from key customer segments, increases in competition from online sources, channel conflicts with various vendors and more. When a significant decrease in your revenue happens, do you really know what has occurred and why? Unfortunately, many distributors find themselves in a vicious cycle: uncoordinated information and processes leads to bad decisions, bad decisions lead to incorrect team behaviors which then lead to declining revenue growth.
In order to break that cycle and replace it with one focused on growth, distributors are focusing on four key areas this coming year.
1. Getting Everyone on the Same Page
A common problem in distribution is that sales, marketing and customer support are working from different silos of data. Sales reps are not able to see what kinds of communications marketing has made with the customer. Customer support has to engage with the customer well after many important interactions have already occurred. Integrating your data across your entire organization is one of the key benefits of SMP’s New Distribution Platform. SMP provides a shared record for every customer and contact so that your sales people can see your support interactions and address issues they may have had. Your marketing teams can pull sales, product and behavioral data together to offer the right message to the right customer segment. Most importantly, your team is acting together for the benefit of your entire company.
When your team has a shared goal, they can focus on execution instead of constantly reinventing new processes. Too many distributors are still using meeting notes and spreadsheets to try to drive goals and processes. CRM allows you to systematize your processes and track them so that you can work together for constant improvement.
2. Reducing Sales Attrition
Sales person turnover remains a major issue for distributors today, because of the high cost of replacing important employees. Turnover can also create service disruptions for you best customers. Any way you look at it, losing top sales performers will have a significant impact on your company’s revenue. The real problem, however, is not turnover but is in fact a low level of engagement from your sales team. If you are not taking the time to analyze the behaviors that lead to sales growth and then tracking and measuring your sales managers ability to create those successful behaviors in other sales reps, you may find it difficult to break the cycle of attrition. Consider that you most disengaged reps may also be poorly managed. Those reps are less successful and end up leaving your company after they’ve been trained only to become successful at a competitor location. If reps are leaving because of disengaged management, then the more disengaged a manager is the more replacements they hire. It is not uncommon for 80 percent of new hires in a distribution sales organization to be made by the bottom 40 percent of sales managers. Unfortunately, many distribution owners and executives exacerbate the problem by putting pressure their managers to keep a lid on sales attrition. This then pressures managers to keep poor performers.
CRM allows you to improve the engagement you have with your reps, keeping them happy and successful. It also allows you to track behavior so that you can get to the root causes of unsuccessful sales quarters and train your reps toward more successful habits. Successful reps enjoy their work and want to stay.
Don’t underestimate the importance of technology in engaging your employees. According to a PwC commissioned study by Opinium Research, 59% of millennial employees surveyed said that an employer’s provision of state-of-the art technology was important to them when considering a job, more than half routinely make use of their own technology at work, and 78% said that access to the technology they like to use makes them more effective at work. This next generation was born into a data-driven world of mature applications and cloud-hosted capabilities. Your employees are more tech-savvy than ever before. They are natural-born knowledge workers who expect easy-to-use and creative solutions that give them access to data across your entire company.
3. Improving Effective Performance Tracking
The best sales managers understand the specific behaviors of their top reps and coach their team to improvement by emulating those best practices. They understand important metrics like activity volume, outbound calls, emails, quotes, response times and close rates.
After identifying these successful behaviors, they work to create a systematic, repeatable and measurable process inside of their CRM system. Your CRM solution allows you to create, follow, track and improve the behaviors you need to succeed. Some sales trainers call this “the cookbook.” You need to know which and how many activities create success. In other words, you need to know how many calls lead to how many appointments, how many appointments lead to how many quotes, how many quotes lead to how many closed sales and so on.
It’s important to consider smart phones and tablets in your strategy. A CRM with robust mobile capabilities allows your reps to take their “cookbook,” on the road with them with one-time data entry for key customer information such as contacts, notes, tasks, or upcoming meetings and no additional work required to synchronize data updates, changes or additions back to your company’s central database.
4. Implementing New Growth Campaigns
Smart distribution marketers want to be able to leverage all of their customer data for their email campaigns. Imagine the power of integrating your ERP and CRM data into your list management and email profiling capabilities. You could combine CRM data (who sold what to whom) with rich data from your ERP system (product costs, customer profile details, and more) in order to identify which groups of customers would be most likely to respond to various email offers and campaigns.
With tight integrations to your other systems, your marketing teams will save many hours per month gathering useful information that will result in higher response rates and ultimately higher sales. Additionally, your customers will have a richer experience with your email marketing because it will be tuned to their goals, needs and purchasing habits.
With the right integrated system, you can close the gap between your email marketing efforts and your sales and product data. This brings your marketing more in line with your sales and operations activities. It also allows you to deliver content that your customers will appreciate and find valuable. You will have a better understanding of how your customers want to be engaged and then have a toolset that will let you segment lists based on the behaviors you identify and make carefully targeted offers to those easily generated lists.