You gotta be kidding me – it’s not a software issue?

A few weeks back I was asked to join a call and explain how our Advanced Supply Chain Software™ functionality could solve this prospect’s problems.

As is typical with these types of calls, the prospect explained that they were losing money on the high majority of their deals (approximately 80%).  Their sales representatives were competing against each other, and by the time they got the deal they were below cost but could not back out.

How can we stop this from happening? They will be out of business at this rate! I had to ask some questions to see what was really going on.

First question – Do the sales people know they are competing with each other?
Answer – Yes!

Second question – If they know they are competing against each other why do they do it?
Answer – Multiple acquisitions and the customers are still going directly to the sales teams from each of these acquisitions and asking for quotes. These acquisitions were competitive and many of them used to compete with us for the customers book of business.

Third question – Did you tell them to stop doing it?
Answer – Yes!

Fourth question – So why are they not stopping?
Answer – They said they are not aware that the customer is contacting all of them for the same quote.

Fifth question – Are they not using their ERP system to follow through on these quotes?
Answer – Yes but we have multiple ERP systems as a result of competitive acquisitions and they are not/cannot be integrated.

Sixth question – Are you looking at rolling out one system across the company?
Answer – We are looking at reducing the number of ERP systems and consolidating to at least 2 systems and no more than 3 based on individual division requirements.

Seventh question – Have you re-assigned your customers to specific account representatives
Answer – No

Eighth question – Are you planning to?
Answer – No

Ninth question – Why not?
Answer – The system was always working correctly, the customers are comfortable with their reps and the reps know exactly what the customer needs and how to manage them. We do not want to affect our business with them.

I had no choice but to state that they are not only losing margin on these orders, but they are actually selling below cost in some cases. How is that be acceptable? The prospect then said that is why they are looking for a new software system.

A new software system will solve many issues – consolidation, modernization, collaboration, visibility and so much more. However, the issue here is not software, the issue is process!

There is no software system in the market today that will keep representatives from competing against each other unless you absolutely control and assign each customer to a specific rep. You may assign them by territory – this might allow a customer to keep their original rep – or a customer to a rep (rep may have multiple customers but a customer has one rep). Once these assignments are in place the system will ensure that the rules are adhered to!

Will this upset your reps? Of course it will, but if you do a good job with the assignments they will still make their revenue goals and eventually get over it.

Will it upset your customer? Probably not!!!!! If the service, quality, pricing and value are the same or better – they will not even feel the impact. In many cases a change is actually beneficial as new approaches will be presented to the customers.

All this to, basically, say that some issues are not system related but process and people related. In this case a new system will add value and efficiencies the old one does not have but the process – if not corrected – will cause the same issues as the old system.

More proof that “we always did it this way” approach is just not acceptable.

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