by David Sims, CRMGuru.com Contributing
Editor With thanks to CRMGuru.com
In March 1998, Tim Horan, president of wine and spirits distributor Ed Phillips & Company of Eau Claire, Wisconsin wanted to plunge into sales automation, CRM, the whole deal. “Someone from a vendor rode around with our guys and said ‘we can automate what you’re doing now.’ Well, we don’t want to automate what we’re doing now, that just replaces pen strokes with keystrokes,” Horan says. “It’s the old checkbook thing, if you can’t balance your checkbook now you’re not going to be able to balance it with Quicken.”
Horan wanted to develop closer, more consultative relationships with retail customers and suppliers. “Our guys do a lot of route sales, everything we do is with existing accounts, we don’t do prospecting at all,” he explained. “We want to streamline the replenishment process, cutting the man-hours devoted to that to the minimum
Ideally, Ed Phillips reps should be spending most of their time “consulting with the stores and restaurants and bars, suggesting ways to stock and set the shelves and displays to maximize the store profit,” Horan says. “Maybe we know that five percent more shelf exposure for pricier brands results in twenty percent more sales, but they don’t. We can help them there if we have the time and the data.”
Retailers hate carrying the slow-moving merchandise and eating the inventory that barely moved at all [hey call us, we’ll handle it]. Ed Phillips saw an opening for some serious CRM. Horan wants to scrap the “pushing products” marketing model in favor of partnering with retailers to help them sell. “We want to have the database information to say to a restaurant, ‘let’s try this wine by the glass program, and we’ll track it to see how it goes.’ Restaurants have scan data, but they don’t really have the people or sophistication to interpret the data.”
It works the other way, too. “Our suppliers don’t have real good opportunities to collect market data, so we want to be able to say to them here’s what sells, instead of taking everything they’re giving us and throwing it all out there to see what moves,” Horan says. “If we could go to them and say ‘look, we’ve just talked with our top twenty accounts and here’s what’s been selling and here’s what they want,’ they’d fall out of their chairs.”
Horan had to push significant changes at Ed Phillips to accommodate this new approach, including a complete reworking of management team roles and responsibilities. Out went the management team members’ focus on brand management in favor of focusing on adding value to specific customer groups. For freestanding liquor stores it means improved assistance with shelf planning and inventory selection. For supermarkets with point-of-sale scanning systems Ed Phillips will assist with analyzing transaction data in order to maximize shelf turns and minimize inventory
They can show restaurant wait staffs the ABCs of good wine and how to suggest their diners trade up from house wines to premium brands
Some things don’t need to change. Remember, CRM is about finding what’s best for each customer, not slam-dunking technology everywhere. “We could, right now, do a 95 percent accurate replenishment order every Monday, but the store managers want to see some guy taking the orders with a pencil and paper,” Horan says. Sure Carl’s Liquor Store has ordered five cases of Canadian Mist every Monday since Monday was invented, but Carl still wants to be able to tell an Ed Phillips rep “Um, I think I’m going to needlet’s sayfive cases of Canadian Mist this week,” and watch him write it down.
Starting with the results and working backwards, Phillips set a priority on streamlining information flow to and from the field, which in turn dictated the technology purchaseswhich ended up being much more modest than he had been planning, and a great deal more useful. “We bought the server, and upgraded from an old-fashioned order transmission system to giving all the reps laptops with entire account histories on them
Horan expects to fine-tune the system as he goes along, but has no intention of returning to the old way of doing business. Bottoms up.
Dossiers – Empresas