The Benefits of a CRM for Distributors with Built-In Business Intelligence
In the distribution industry, managing customer relationships and data can be a daunting task. Unique challenges such as handling bill-to/ship-to accounts, navigating complex pricing structures, and optimizing inventory levels require robust solutions.
This post will illustrate why distributors need a CRM with built-in business intelligence (BI) and why most generic CRM solutions, such as Salesforce, aren’t enough.
Distribution Industry Challenges
Managing Bill-To/Ship-To Accounts and Contacts
One of the unique complexities in distribution is managing bill-to/ship-to accounts. A single account may have one billing address but dozens of different shipping locations. Understanding the relationship between these accounts is essential for building stronger customer relationships. For instance, recognizing patterns in product purchases across different locations can help identify related products for other locations with the same billing address.
Maintaining separate data for individual dealers and end users is another nuance that’s difficult to parse out in a general CRM solution. This was a challenge for LEPCO, a lawn equipment parts distributor. Historically, CRM software hasn’t made it easy to see the relationship between accounts and contacts without extensive customization.
With White Cup CRM + BI, LEPCO can easily see the relationship between bill-to and ship-to dealer accounts and whether or not an account is a dealer or an end user. This helped them expand their marketing directly to customers — for instance, offering special discounts to bring them into a dealership — in addition to marketing to dealers.
Complex Pricing Structures
Distributors often manage thousands of SKUs across multiple suppliers, customer segments, and geographical locations, making pricing a complex and dynamic task. Factors contributing to price volatility include fluctuations in supplier pricing, shipping costs, and currency exchange rates. Different customer segments require tailored pricing strategies, such as bulk discounts for large volume buyers. Distributors also need to monitor competitor pricing and adjust their prices to avoid losing market share. Regional variations due to local demand, shipping costs, and regional taxes further complicate pricing strategies. Relationships with suppliers also influence pricing strategies, allowing distributors to negotiate favorable terms and offer better prices to their customers.
Electrical distributor E.B. Horsman struggled with providing the detailed reports its vendors needed to see to consider expanding partnerships or negotiating better deals. Compiling reports from its ERP, Epicor P21, was time-consuming, and the data would often be outdated by the time they were done.
With White Cup BI, the company can use prebuilt vendor scorecards to show suppliers the cost of goods sold, most popular products, and more. This has boosted their credibility with vendors, leading to more profitable partnerships.
Optimizing Inventory
Holding costs for inventory can affect pricing, so distributors typically focus on optimizing inventory levels in their marketing efforts. Promoting slow-moving products over more in-demand items helps balance inventory levels. The distribution market is also highly competitive, with B2B customers using multiple sales channels for purchases, including in-person, phone, websites, and procurement portals. Managing these fragmented channels often involves inside sales teams, customer service, outside sales reps, and marketing managers. To say it is a significant challenge is often an understatement.
The Benefits of a CRM With Built-In Business Intelligence
Generic CRM solutions often lack built-in BI, forcing distributors to purchase separate solutions like Microsoft PowerBI or Tableau. This typically requires extensive IT involvement for data export and report customization.
A CRM with built-in BI, such as White Cup CRM + BI, offers numerous advantages:
Faster ROI
Distribution-specific, off-the-shelf reports and dashboards deliver value from day one. Instead of spending months integrating a BI tool with their ERP and CRM, distributors can use White Cup BI’s 1,100+ pre-built reports and role-specific dashboards immediately.
Callico Distributors is one example of a company that achieved much faster returns using White Cup compared to Salesforce. The company previously had Salesforce for several years but only used a fraction of its functionality. Because the CRM did not integrate with their ERP, they weren’t able to see essential data they needed to forecast sales, set pricing, and identify new opportunities. They had to pay a data analyst each time they needed a custom report. Creating a custom integration with Salesforce would have cost upwards of $60,000.
Instead, Callico decided to use White Cup CRM + BI, which integrates directly with their ERP. Now they can accurately forecast demand based on historical trends, see sales performance at a glance, and act more quickly on opportunities.
“We’re going from a totally siloed solution to being able to have visibility between these pillars of the business and being able to plan and react to what’s happening in each one of them,” Callico Director of Strategic Initiatives Cole Callahan said. “We use insights we get from White Cup BI to create opportunities or leads within the CRM, launch marketing campaigns, and feed the data directly to sales.”
More Proactive Customer Outreach
Generic CRM solutions like Salesforce make it difficult to reach out to the right customers at the right time because they don’t integrate with ERPs. Without essential customer and product data, distributors cannot access order history and purchasing frequency data. White Cup CRM integrates with ERP systems, providing comprehensive customer, product, and purchasing data. Features like customer scorecards, automated alerts, notifications, and marketing/campaign management tools enable proactive customer outreach.
Ability To See Business Performance
Most teams lack the ability to see key metrics in a single source of truth. Tracking cash flow, expenses, profit margins, and inventory is crucial. Darcoid Rubber’s director of finance, Brian Poggetti, improved visibility into cash on hand, sales backlogs, and order volumes with their custom daily check-in dashboard. This enhanced visibility leads to better decision-making and visibility.
Faster Sales Forecasting
Traditional forecasting methods, such as increasing previous year’s numbers by a standard percentage, are problematic in fluctuating markets. Constant re-forecasting creates interruptions for sales teams and stakeholders alike. Synchronized sales data, product data, and business intelligence allow for accurate and timely sales forecasting, aiding business planning.
More Efficient Collaboration
Using separate BI platforms with generic solutions hinders collaboration. A CRM with built-in BI consolidates all data, improving collaboration across departments. This leads to more efficient operations and better decision-making.
Improved Sales and Marketing ROI
Deeper insights into sales and marketing performance lead to smarter resource allocation and better returns on marketing spend. Mar-Hy Distributors, for instance, quickly identified customers with declining sales and addressed issues proactively. Metrics like turns, fill rate, and sales by product group are crucial for performance monitoring and improvement.
Better Vendor Management
Built-in, distributor-focused business intelligence within the CRM leads to better vendor relationships. Distributors can easily see which suppliers have the most popular and most profitable products and provide them with real-time data to demonstrate the value so they have greater incentive to continue the partnership.
Why White Cup CRM + BI Is the Best Solution for Distributors
White Cup CRM is a better alternative to generic CRM software like Salesforce because it is designed for seamless ERP integration by distribution industry experts. Unlike most CRM solutions, it has built-in business intelligence, allowing sales, marketing and operations teams to make data-driven decisions.
This leads to more profitable customer relationships, more successful vendor partnerships, and a better handle on inventory needs. Ready to see a closer look? Schedule a consultation today.
