By Andrew Ardron on Wed 16 January 2019 in Wholesale & Distribution
You sell products B2B - either distribution or wholesale, or you’re a manufacturer, distributing your own products, and you want to increase sales. In that case you've come to the right place.
We all know now that a CRM can help increase sales and efficiency…but naturally, you're wondering if it'll be right for your business. How effective will it be for you? Perhaps you've tried to implement a CRM system before and struggled. Perhaps you have a CRM right now, but the sales team just use it like a basic name and address system. Or perhaps your sales team are using tonnes of spreadsheets to supplement their CRM system with stock information, monthly targets and sales figures, customer sales analysis, etc.
And, it's no wonder. How can 1 software system, or even 1 type of system work for every different business - no matter how different they are, how different their activities, processes, products and routes to market are? Clearly, traditional CRM systems work for some businesses, but for others they can become just another silo of information, used by just 1 department who then work on different data to everyone else.
The fact is, that traditional CRM just doesn’t work for distribution businesses. For distribution, wholesale and manufacturing businesses, all too often, CRM promises…but fails (and fails hard) to deliver. Before you join the long list of distribution businesses that have tried and failed with CRM, let's understand what's so different about sales engagements in a distribution business, and why traditional CRM just doesn’t work.
Is this for us?
If you don't do B2B e.g. you sell video production, consulting services or building conveyancing – or run any sort of business that doesn't sell physical products B2B, then don't worry – you don't need to know or care what's special about sales processes in a distribution and wholesale business. Traditional CRM is perfect for you.
So, now the non-B2B folks have left, let's focus on what makes a B2B distribution business special (I'm just going to say distribution from now on, but you can be sure the rest of this article is relevant to wholesale and manufacturing businesses too!).
What do sales staff do differently in a distribution business & why doesn't traditional CRM work for them?
It’s a fact that sales staff in distribution businesses have unique challenges that just aren't addressed in a traditional CRM system. In fact, traditional CRM has a very high failure and dissatisfaction rate amongst distribution businesses...simply because most CRM's weren't designed for you.
In your distribution business you will either have multiple sales specialists, or more likely your sales staff will wear many different hats. Either way, a few of these hats work OK with traditional CRM systems, but most don't. Most hats require the sales teams (and Sales Manager) to work in the dark or switch to different systems or use multiple spreadsheets alongside their CRM.
And that's just the sales functions. It's easy to think of a CRM system as just a sales tool, but CRM stands for Customer Relationship Management (not "grab a quick sale and sod the customer relationship"). The end goal of CRM is clearly more sales, but to achieve genuinely sustainable sales growth (especially in a B2B product distribution business, where we need to build trust, develop good customer service & achieve high customer satisfaction). That means our sales team need all the usual CRM stuff…plus sales analysis, efficient and accurate quoting & order processing, accurate product information and inventory management, probably even stock forecasting. Plus, after the order has been taken we need order tracking, back-order information, up-to-date due dates, and, when things go wrong we will need problem, issue and complaint handling features. Without all of that we are going to struggle to build achieve high customer retention and regular, high value re-spend.
Let's contrast that with a non-distribution business. Let's consider a sales person in a consulting or pure service business, say selling corporate video production. This sales person need all the traditional CRM features that you need – they’ll need to track enquiries, record customer details, call notes, make follow-ups etc. But, when it comes to sending a quote, the quote will be just an email. There's no stock to check. There's no order to process and no goods to ship. The eventual invoice will probably be a 1-liner. And that's just a simple new business sales enquiry.
So, as you can see, the different types of businesses need what suits them. Keep your eyes peeled for part 2 of this blog series, where we’ll share comparison charts contrasting typical Sales roles in a distribution business vs. a pure service business, and how their CRM needs differ.