Volume 2 Issue 2 Summer 2001
Using Software and the Internet to Boost Sales
by Sherif El-Dibani and Diane Huybers
As new technologies are introduced, companies are forced to adjust their traditional marketing strategies. This article will cover methods used to increase dealer networks, as well as closing ratios, and new affordable tools that help both the manufacturer and the dealer accomplish just that.
The article will also briefly introduce the concept of a customer-centric marketing strategy and the role of software and the Internet in achieving long term success though Customer Relations Management (CRM).
During our years in the industry, we have established a basic success formula by which we evaluate the potential future success and longevity of our clients (see box page 39). Integral to this strategy is the pursuit of market share.
Pursuing Market Share
Market share, in simple terms, is defined as the number of units sold by a manufacturer as compared to the total number of units sold in the market area.
Market share can be increased in many ways, the most common of which are:
Attracting new dealers traditionally is achieved by offering the following:
The basic underlying strategy is to make the dealer profit by selling your products. Most of the strategies listed above imply lower margins for the manufacturer, and may also result in larger expenses incurred adding new product lines and/or adding staff to improve customer service.
Is there a better way of achieving the same results by forgoing margins and/or increasing costs? The answer may lie in today’s available technology: a combination of software and the Internet.
Putting Software to Work
Software is already a tool used by many to facilitate the quoting process at dealer sites and with salespeople. But there are many shortfalls to how manufacturers view software. Most manufacturers use software as a tool to allow the dealer to quote easily and accurately, transfer orders to the manufacturer’s system or fax them to customer service, while allowing the dealer to print professional quotations for the client. While these are very strong points for the distribution of software to dealers, will the dealer actually end up relying on your software, or even using it at all? If so, for how long?
To ensure that software is a success with dealers, manufacturers should put themselves in the dealers’ shoes by asking themselves the following questions:
Dealers are just like everyone else; they would like to use tools that help them throughout their business while also helping them increase business. So, if the software is designed to address the manufacturers needs with little regard to what dealers really need, it is a wasted investment on the part of the manufacturer and will only end up frustrating the dealer.
If a manufacturer chooses to supply dealers with quoting software then it is crucial that this tool address most, if not all, of the dealers’ business requirements. Manufacturers that succeed in this will get dealers hooked on selling their products. It becomes very difficult for your competition to convert dealers from your products to theirs.
How can software help your dealer increase the closing ratio?
Some software even offers the dealer the ability to set a dummy limit, which, when reached, displays a warning “Discount level not authorized. Please contact the office.” This limit is usually set at a lower discount level than the real limit, which the second and absolute discount level allowed. This is a good example of the power of well-researched software design. The customer will see such a warning and think that he is getting a very good deal, more reason to sign the contract now.3. Compare salespeople.
A salesperson enters a house and uses software to introduce the company, design products, price them and generate a professional quotation. Another competitor pulls a price book, hand draws windows, flips through price books back and forth, hand-writes the quote and hands it to the customer. Who do you think will get the deal?
Why Use Quoting Software?
Well-designed software should provide both dealers and manufacturers with benefits.
Some of these advantages to dealers include allowance of the following:
Some of the benefits to the manufacturer include:
Internet Expands Its Role
Most window and door manufacturers use the Internet to advertise and communicate information about the company and its products. Very few have adopted the Internet as a tool to improve customer service, increase sales and reduce costs. The Internet, coupled with appropriate quoting software can accomplish all of this and more.
What does CRM mean? Customer relationship management should be exactly that: the process of actively deepening the knowledge you have of your customers over time, and then using that knowledge gained to customize your business and strategies to meet that customer’s individual needs.
It is important to stress this point simply because a large percentage of the market’s perception is that CRM is simply a technological solution that does sales force automation or call center functions. CRM is about an entire change of mindset to become customer oriented; it is not simply a piece of technology that will solve all your needs (definition provided by Ryan CrawCour).
First, you must realize that this is a very old concept. If one has knowledge and information about the market to which they are selling, then potentially they can gear their efforts more directly to satisfy this market’s requirements. The result is increased sales.
There are two customers involved here, the dealer and the homeowner. While technology is the obvious tool for gathering this data, it is what you do with it that counts.
Gathering Information from Dealers Using the Internet
As a manufacturer, can you imagine being able to see what quotes were issued by dealers, which ones were accepted and why?
Here are some clues to the type of knowledge that can be derived:
What can you do with this information?1. Change pricing strategies for individual dealers and/or regions;2. Run specials on certain products/options for regions or within certain time frames;3. React quickly to competitive pressures;4. Plan workforce, purchases and inventory levels accordingly.
What you do with the information is really a reflection of your business. But if your competitors start doing this before you, you will end up playing catch up.
Gathering Information from Homeowners Using the Internet
Now this is tricky. Does a manufacturer that sells through dealers really want to hear from the homeowner? Of course.
What if you, as a manufacturer, provided a forum for the homeowner, who has purchased his products directly or through dealers, to log onto your website and register his windows and doors for warranty? What if you went further and allowed homeowners to register complaints and/or praise about your products on your website?
There are two distinct advantages of doing this:
There is so much to be said about the role of software and the Internet in CRM and in increasing your bottom line. It is important however to remember that it is not the information that you gather that’s important, but what you do with it.
Additional Valuable Internet Uses
The Internet can also be used as a medium to run quoting and order processing software. There are many debates over the usefulness of such capabilities. Yet with today’s Internet security features, at least the argument of “who wants to have their price book where everyone can see it,” is no longer valid. Do you think that none of your competitors have your printed price book? Think again!
Other uses of the Internet extend to suppliers and manufacturers offering them the ability to see what part numbers you have in stock, so they can plan production and delivery. There is so much more that can be done over the Internet and with good software. There are always new ideas and we are always learning from new customers. Maybe in a few years we will have a Palm (PDA) based contact management and quoting software!
Manufacturers of all sizes do not consider investment in software or the Internet as well-placed dollars. Most also tend to think that the costs are prohibitive. In reality, manufacturers cannot afford to do without either software or basic web presence, and the costs are now much more affordable. If a manufacturer calculates the per year cost of customer service and order re-keying errors generated on orders placed by the top 10 percent of their dealer network, they will quickly realize that a small investment in software and the Internet is well-worth their while.
There are many strategies and tools to help achieve the formula for success. Most strategies are not new and have been tried and tested. Software and the Internet are the new tools that help you put these old strategies to work. Software and the Internet are key in beating your competition. They are no longer a luxury; they are necessary and affordable tools for today’s competitive marketplace.
Diane Huybers and Sherif El-Dibani serve as president and operations manager respectively for Computers Mean Business Inc. in Toronto.
© Copyright 2001 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.