Several different companies are examined to see how they acquired sales automation technology and informatiion.
Want to jump-start your sales process? Acquire the information and technology that'll make you a master of sales automation. But act fast. Doing nothing could be fatal
No matter what kind of business you run, your company's growth, even its survival, depends on your smart use of information technology. If you haven't done so already, you need to examine the way you sell and the way your customers like to buy. Then you need to figure out how computers can help you serve your customers better.
As hard as it is to have to invest time and money to figure out what equipment you need to buy and how to use it, you probably don't have much choice. If you don't think technology is here to stay, go to Sioux City, Iowa, and get an earful from Sioux Honey Association sales and marketing vice-president Jim Powell. For years the $50-million cooperative sold honey to major grocery chains, never bothering to invest in the electronic data interchange (EDI) technology that would let buyers bypass paperwork and place orders through their computers. But a few years ago the big chains got tough. Start using EDI, they told Powell, or pay an extra $25 to $50 in fees per order to cover the processing of paperwork.
EDI requires specialized software on each end. Whether he liked it or not (and he didn't), Powell would have to research the options, at a cost of several thousands of dollars. Finally, Sioux Honey decided on a program called Premenos, designed for the IBM System 36 mainframe computer, which the cooperative already owned. That program cost about $20,000. Sioux Honey also pays a few thousand dollars a year to an electronic-mail provider that uses phone lines to deliver the data to the grocery stores that sell Sioux Honey's Sue Bee honey. Add to that another $20,000 a year, which is what Powell spends in travel costs. That includes trips to seminars on EDI and visits to customers to ensure that their computers can talk to his.
It's not that Powell doesn't believe computers can help businesses operate more efficiently. It's just that the payback -- if there is one for the company -- is far smaller for Sioux Honey than it is for the multibillion-dollar food conglomerates against which it competes. "We do thousands of transactions with the grocery chains each year. The big guys do millions," Powell says. He wants retailers to cut him some slack, but he knows that's unlikely to happen. So he continues to shell out thousands of dollars each year for EDI upkeep.
"They asked us to use this technology, and we took it to heart," says Powell. "We had to find out what it was and how to use it."
But not every company's needs are the same. For another perspective, talk to Peter Mackins, general manager of Santa Barbara Stone Masonry Supplies, in Santa Barbara, Calif., a family-owned business that sells sand, gravel, granite, and other building materials to local contractors. Mackins hopes that the $30,000 he plans to invest in new technology will give him at least a fighting chance of getting back the revenues he has lost because of a local building slump and the rise of national chains like Home Depot. Since 1992 Santa Barbara's sales have slipped from $4 million to $2.5 million. Mackins's 12-year-old minicomputer isn't helping things any. Although it performs basic accounting functions, getting it to alert the user when the company is running low on sand, gravel, granite, or other building materials, or to flag accounts that are more than 60 days past due, is trickier. Mackins has to run a report -- which he paid a vendor $100 an hour to write -- and wait for the answer. Worse still, Mackins spends $5,000 a year in maintenance and modifications for the system. "I'd like to pitch the whole thing," he says. For a pricetag of $30,000, here's what he would want a new system to do:
· Deduct precise amounts from inventory at the point of sale and charge the customer accordingly. Contractors buy materials by odd measures, such as shovels, sacks, and scoops.
· Alert the user when inventory levels fall below a predetermined level. That way Santa Barbara could buy from the lowest-cost providers, instead of paying a premium for fast delivery at the time of demand. In spite of all the money Mackins has sunk into his computer system, he now relies on the yard personnel to let him know when stock is low.
· Check the status of a customer's account at the point of sale to extend credit accordingly.
· Automatically generate status reports for past-due accounts.
· Analyze customer buying patterns, including requests for products the store doesn't carry. That way the store can diversify its product lines accordingly.
· Run on Windows-based personal computers (several of which Mackins already owns) with an easy-to-use interface.
Santa Barbara's story reinforces the message that small businesses need to make good use of information technology to stay competitive. If you're willing to spend time figuring out how computers can help you serve your customers, as Mackins is, you'll be able to keep even the most demanding customers happy. If you're not, your competitors will be able to buy at lower cost, service more accounts with fewer people, match your latest discounts instantly, and get to new customers before you do.
By now you know that there's a plethora of new technologies out there that claim to help you sell more at a higher profit. Of course, getting there from here is not as simple as it sounds. But if, for instance, your salespeople work in the field, it pays to know that state-of-the-art notebook computers are not just status symbols for traveling executives. They are smaller, cheaper, and lighter than their full-size siblings, and they're as powerful as many of the mainframe computers running multibillion-dollar corporations. (See "The State-of-the-Art Notebook Computer," page 5.) And if, like most on-the-road salespeople, members of your sales force need to dial into headquarters to check a price in the database, you can equip your notebook with a credit-card-size fax-modem that doubles as a network card, the device your computer needs to work with the office local area network.
If your salespeople find that plugging into phone lines just isn't practical, then you'll need to look into wireless communications. Providers of such services use radio airwaves to connect your salespeople to the office computer from virtually anywhere. (See "Resources: Wireless Help," page 6.)
