Increasing Sales and Profitability
There are many factors that influence sales and profitability - some of which you have control over, some you don’t.
- Competitors positions
- Market influences
- Taking advantage of special purchasing opportunities
- The ability to store and handle inventory efficiently
- Control of your expenses
- The customers perception of your company’s value to them
- A quality sales force
For the most part, competitor’s positions and market influences are pretty much out of your control. However your purchasing people, when assisted by a computer system that is rich with historical information and easy to use, will be better equipped to make better purchasing decisions with our system.
A good food distribution software package can also help control expenses and increase profitability in many ways. A fully integrated financial system along with good credit management, inventory control and purchasing tools will provide your management team with all the information they need to make the decisions that will help increase the bottom line.
With the use of well designed sales force automation tools, you can be assured that your customers’ perception of your level of service will dramatically improve along with the appropriate increase in the bottom line
Now we all agree that hiring and maintaining a quality sales force is a large part of the equation, but quality salespeople are not just born, they are a product of a lot of time in the business, understanding the customers’ needs and your product line, as well as the ever changing status of your inventory.
Wouldn’t it be nice if we could help our salespeople to become more productive - in a shorter period of time?
With a well designed computer information system designed for your industry - you can…
I believe a basic principal we can agree on is:
” There are several significant benefits to having the salesperson, the customer and the computer system interacting at the same time.”
- There are fewer errors - which cost you money and can damage customer relations
- A well designed system can easily provide the salesperson the information they need to up-sell the customer
- The salesperson can be constantly reminded of those items you have chosen to offer ’special’ pricing
- The salesperson can be constantly reminded of those items the customer hasn’t purchased in a while, thereby giving your sales manager valuable information in a timely fashion on changing market conditions
- In the absence of their regular salesperson, a customer’s order can be taken by another salesperson - who may not be thoroughly familiar with that customer’s particular buying habits - because the system remembers what they buy and what they pay.
It was not feasible having the customer/salesperson/and computer all talking at the same time - until recently - because:
- The computer system was too slow, too cumbersome to use, or just did not have the information needed - available to the salesperson during the sales order entry process.
- Your salespeople saw no benefit to doing it this way - so they continued to write the order for later entry into the system
- You didn’t see the functionality, therefore you didn’t push your salespeople to use this approach
- The customer just wouldn’t cooperate
Now, with the right software - most of those conditions need not exist.
Current food distribution software was designed, from the ground up, with the food distribution industry’s order taking process in mind. This means the developers have included the various pieces of information to fully enable the salesperson to handle the order taking process quickly and efficiently. In addition, it can provide salespeople the tools they need to better manage the order taking process and to guide the process where possible. Now, there are some customers who just will not let you guide them - so be it. However, there are many more who, if properly led, will follow. Wherever possible, the your sales force should be directing the sales process, not following it - a skillful salesperson can do this where appropriate.
The “up-sell” technique
Automobile dealers use it
Why do you think after the deal is made with the salesman/sales manager, you are passed on the F&I person? This person is the master “up-seller”. Their job, in addition to finalizing all the details of the sale and finance information, is to tack on other high margin products and or services.
Large retail stores use it
All those little impulse items are strategically placed around the check out counters in an attempt to lure a few extra dollars of GP out of you.
Large building materials chains use it
They run ads for large window or door units with great prices. Then sell the add-ons where the real GP is (and the buyer frequently fails to check the competition’s pricing on these items).
Fast food companies use it
How many times have you gone into a McDonalds’ restaurant to order a hamburger and a drink only to have the clerk ask:
“Would you like an order of fries or an apple pie with your meal?”
How do you typically respond to the question?
Do you always reject it out of hand?
Or do you occasionally say “sure, thanks.”
If you’re like most of us, more often than not, you buy the additional item or items.
Now, what does that mean to McDonalds?
Conservative estimates for the “up-sell” will put between twelve and thirty thousand dollars in the gross profit column for each location over the course of a year.
JUST FOR ASKING A SIMPLE QUESTION OF A BUYER - -
WHEN THEY ARE MAKING THE BUYING DECISION.
Not bad.
Is there a way you can use this technique to improve your bottom line?
I know what your thinking :
Your product line is far more complicated than that of the local hamburger fast food restaurant
You do not have the same luxury of time the automobile dealer has with his customers
You don’t have customers leisurely viewing your product line as they do in the retail stores.
However, if you can get the appropriate information into the hands of the salesperson while speaking with the customer - when they are making the buying decision - I guarantee you too will benefit from this “up-selling” technique.
Remote Order Entry:
Now, here are 3 additional principals, I think we will agree on:
- Outside salespeople earn most for your company when they are
out of the office and in front of a customer or prospect - selling.
- The more people whose hands an order passes thru, between the time the salesperson writes it down and the time it gets into the system, the more errors.
- Errors cost your company money.
A food distribution software package should have available the ability to take sales orders in the field, and thru one of several methods, transmit those back to the host system - as though it were entered by hand.
In addition, this capability should include the ability to provide additional information to the salesperson like:
- Customer’s current open order status
- Customer’s current A/R status
- Weekly Specials/Spiffs
- Basic Inventory and Receiving information
So, in conclusion, if your current information handling system gives you the tools to do these functions mentioned above - read the other articles which are designed to help you evaluate where you may be able to increase profitability - Purchasing, Inventory Control or Credit management.
If after reading those additional articles you feel your current system handles your requirements and is providing you with all the opportunities outlined to increase your profitability - you have no reason to read the next series of articles I have written to help the small to medium sized food distributor, food processor or food broker analyze acquire a new information processing system.
This series will help you identify your needs and put together a plan to identify, evaluate and negotiate the purchase/lease of an information processing system designed with your issues in mind.
If your current system is lacking, then invest a small amount of your time, and just maybe these articles will help you in your decisions.
What have you got to lose?
Other related articles by this author for the food industry:
Increasing Profitability thru Purchasing Tools
Increasing Profitability thru Credit Management
Increasing Profitability thru Inventory Control
Information Systems Acquisition - a 5 part series
Robert A. Casale is the Vice President of Sales and Marketing for Lighthouse Systems Group, ltd. - a Rhode Island based company whose focus is on providing food distribution software and food broker software to the food industry.