7 SIGNSYOU NEED BUSINESS INTELLIGENCE

DISTRIBUTORS

A publication of

The wholesale distribution sector was worth $6 trillion in 2014.“

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For the most part, the distribution industry has weathered the economic storm of late. Despite warnings of a slump in the market, the wholesale distribution sector was up in 2014 to a staggering $6 trillion. With sectors such as manufacturing and retail sales seeing double-digit percentage growth in the last year, the market is undoubtedly going from strength to strength.

As the market continues to flourish, many industry challenges are now coming from much further afield. From globalization to increased competition and the rising costs of overheads, many distributors now need to focus and ensure that their entire operation is aligned with demand. This is something that can be challenging in a growing business.

These inherent trials form the backbone of many a distributor’s downfall and are early warning signs that you need a Business Intelligence solution in place to mend the cracks and create a solid business foundation.

Business Intelligence (BI) solutions automate the task of analyzing data, providing a better understanding of company performance, creating a proactive sales culture offering a complete customer view for the entire business and streamlining the sales and marketing process.

7 Signs You Need BI: Distributors7 Signs You Need BI: Distributors

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1. Remaining competitive

The growth in competition has been incredible and the pressure upon smaller distributors in particular is mounting. As many companies seek to buy into different products, markets or even countries, distributors are likely to be competing head on with deep-pocketed companies that dominate the market.

Remaining competitive is vital if any company is ever to succeed and technology is one of the only ways to do this. BI solutions level the sales playing field, allowing smaller companies to compete directly with the industry giants. Spotting valuable sales opportunities before your competition is one of the best ways to outsmart them. The ability to understand where sales lie in seconds will give you the edge every time. You can act quickly to capitalize on these opportunities before the competition even catches a scent of it.

What’s more, you can provide a personal level of customer service where the ‘big boys’ simply can’t. With instant insight into each and every one of your customer’s buying habits, you can create personalized campaigns, special offers and provide a customer service experience to make them feel valued. And what could be more important? A happy customer is a loyal customer.

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2. Rising costs: needing additional revenue

In order to succeed as a distributor, all business resources and operations must be aligned with customer demand at the very best price. The need for access to timely sales data when coupled with a responsive sales operations is paramount and will minimize costs, poor sales margins and boost profits. Without the complete visibility of transactional information such as sales value, GP% and margin, companies are struggling to manage diverse product ranges at the best possible value.

A BI solution will provide a complete view of your entire distribution operation. From a sales point of view, this level of visibility will empower your team to make smart business decisions that result in more profitable sales. From identifying their top GP% line items to spotting opportunities to grow your share of the customer wallet.

Generating additional revenue is simple with a BI solution, with easy cross and switch selling opportunities being brought to light. If a customer is purchasing nuts from you but not bolts, why not offer a targeted discount on bolts to get their custom? What’s more, as this way of thinking becomes second nature for your sales team, they’ll begin to find more opportunities of their own accord.

7 Signs You Need BI: Distributors7 Signs You Need BI: Distributors

3. Difficulty identifying growth

Distributors work in very competitive markets and it’s for that reason that every opportunity for growth must be seized with both hands. The potential for growth within the distribution sector is huge, from diversifying to international markets to extending or focusing on a particular product.

Introducing a BI solution to your business can ease the identification of growth opportunities and decision-making process. Analyzing your company’s historical sales and transactional data, trends will begin to appear in the data that will point you in the right direction for success.

Are sales storming ahead in Europe? Is your automotive distribution channel closing 50% more business than last year? It is this level of insight that will afford your company the ability to make well informed, fact-driven decisions, rather than taking a punt on gut-feeling.

4. Little customer loyalty

The thing with distributors is that, for the most part, they rely on one or two big customers to keep healthy revenues flowing. It doesn’t bear to think about losing a high-spending customer and the amount of revenues you’d lose along with it. While it is paramount to keep your biggest accounts happy, your smaller accounts are equally as important. They may not attract six-figure sums, but the thousands they do bring in are just as important to keep business ticking over.

Any good BI system will integrate your sales data with your customer information and provide you with a complete overview of each account. Not only will this allow you to stay on top of their performance, but will also act as a central information point for your entire business and you can provide a level of service that is truly second to none.

Potential growth for the distribution sector is huge.“

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7 Signs You Need BI: Distributors7 Signs You Need BI: Distributors

BI means that you can become a trusted advisor to your customers, extending the user experience far beyond the first initial sale. This doesn’t mean waiting for customers to come to you with questions or queries, but instead going to them with information and advice. If you’ve discovered that your customers regularly buy a particular item from you, then offer up some advice and add value. You’ll be raising your profile and setting their mind at rest when it comes to re-ordering from you.

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5. Forecasting demandThe distribution industry is built upon forward planning and a minuscule margin of error. So when it comes to forecasting customer demand, data should be driving most of your planning and decision-making, yet numerous businesses continue to rely on gut instinct and feelings to make their supply decisions.

Guess work and intuition alone are no longer acceptable decision making tools, especially when there is an endless supply of data stored in every single business waiting to be used. This data, when analyzed and presented correctly can provide a level of insight into customer demand that is truly second to none. You can monitor spending habits down to a granular level of detail.

A tool such as BI will feed on your company’s past sales data, tracking and identifying customer behavior to highlight trends and average demand throughout the year. Within seconds you will be able to understand the average demand of your entire customer base and can use this information to forecast with precision.

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SKU 04937 at its peak

6. Seeking to improve efficiencies

Any good distributor will be constantly seeking to improve the efficiency of their business. The pain points of many comes from not having enough time, money, resource and the like.

From a sales perspective, time is money. There is little use in wasting hours ringing around hundreds of prospects and existing customers with no real talking points in the hope of making a lucky sale. What’s more, waiting around for orders to fall at your feet is just as useless and not making the best use of the resources at your disposal.

7 Signs You Need BI: Distributors7 Signs You Need BI: Distributors

Opportunity A

Opportunity B

BI software is the key to proactive sales calls. Trawling your data for valuable sales opportunities, it will feed your team with the information they need to make smart calls that count. 10 well informed calls would have a far better closing ratio than 100 cold calls. Concentrating on key areas that will result in sales will ensure that time isn’t being wasted talking about the weather or last night’s game, but will guarantee that every single call counts and sparks an interest in your offering.

7. Need to monitor individual products

As a distributor, it’s highly likely that you’ll be managing hundreds, if not thousands of products, ensuring they get to the right customer, at the right time and for the right price. Managing these thousands of products from a sales performance point of view is often an uphill battle. With thousands of products, knowing which of those are your best sellers, your most profitable and even your worst sellers can take hours to decipher.

With a BI solution, you’ll have a clear picture of your entire product portfolio, from GP% to margin and even which customers have purchased that product in the last 12 months. Or more importantly, which haven’t bought a particular product from you but should be.

7 Signs You Need BI: Distributors7 Signs You Need BI: Distributors

A complete overview will help you to better manage your products, as you will know which you need to be pushing as a team and which you could potentially discontinue due to a lack of sales. The key here is to concentrate on what makes you the most money at the best cost. A BI solution will bring all of this information to light in seconds, removing the need to interrogate endless rows of sales data.

SKU 02632 in decline

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7 Signs You Need BI: Distributors7 Signs You Need BI: Distributors

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