Why Has CRM's Potential Not Been Realized for Many Distributors? - Modern Distribution Management

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Why Has CRM’s Potential Not Been Realized for Many Distributors?

Existing solutions are clunky because they aren’t set up for high-volume repeat sales, high SKU counts and many channels. Instead, they were built for SaaS software companies or service businesses, says proton.ai's Benj Cohen.
Partnership Skills for Industrial Buyers and Sellers (Part 2)

Customer Relationship Management software is notorious for its failure rates, ranging from a third to 90% of projects not delivering on the promised ROI.

The idea behind CRM is not bad – help your team meet customer needs throughout the customer lifecycle, streamline sales processes, give managers visibility into the sales pipeline and ultimately increase conversions and grow wallet share.

But for many distribution organizations, CRM’s potential has never been fully realized. Existing solutions are clunky because they aren’t set up for high-volume repeat sales, high SKU counts and many channels. Instead, they were built for SaaS software companies or service businesses.

CRM doesn’t usually make anything a sales rep does on a day-to-day basis easier. In other words, the “What’s in it for me?” of CRM is missing on the front lines of most distribution companies. Because of that, reps don’t use it. This makes it useless for management as a forecasting tool because it doesn’t have useful data.

Most sales reps view CRM as a tool for managers to look over their shoulders. Most CRMs are also not set up well for the distribution sales model, and they require a lot of manual data entry. In a Forrester report, nearly 40% of respondents attributed their poor CRM adoption rates to “people issues.” CRM is most often used for tracking notes, contacts and tasks – a glorified Rolodex. If a sales rep doesn’t think that the time to enter that data (often manually and with multiple clicks) is worth it to them, they won’t do it consistently. That erodes the value of the tool for both the rep and the distributor.

More Intelligent Capabilities

Distributors need a more intelligent CRM. An all-in-one system powered by AI will transform CRM as we know it today and add greater value for distribution sales reps through:
● AI-generated opportunities that help sales reps figure out how to grow sales with each customer – without manual data entry. AI can point reps to sales opportunities that most warrant their attention. This includes predictions about what each customer will buy, and when and where they will buy it. For example, conversations can move from “Do you need anything?” to “I noticed you’re buying conduit from us but have never purchased conduit benders. Can I send you some information on a few products?”
● All customer interactions from all channels in one place so that the AI-powered models get smarter, which in turn makes reps smarter. Fueled by buying and shopping data from inside sales, outside sales, e-commerce, customer service, marketing and counter sales, an AI-powered CRM can provide your team visibility into a customer’s entire history with the distributor, even if it happened in a different channel.
● Integrated document and product search that makes it easy to find everything reps need one in place. When a rep can’t answer a question from a customer in a timely fashion, that hurts the customer experience. An AI-powered semantic search of PDF sell sheets, documents, product description and attribute data within a CRM will get the sales rep an answer in a fraction of the time it would take to Google the question (if Google has the answer) or pick up the phone to call a manufacturer rep and wait for the response.

Distributors need an AI-powered CRM designed for their businesses, which looks very different from existing solutions. With this, CRM can move from a much-maligned technology in distribution to one that is embraced by every level of an organization.

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