Why Wholesale Organizations Do Not Implement Enterprise-Wide CRM?Why Wholesale Organizations Do Not Implement Enterprise-Wide CRM?

The value proposition of CRM systems has enabled this application to penetrate most industries. Both large and small companies are leveraging the benefits offered by CRM. On the other hand, it is hard to find enterprise-wide CRM implementations in the wholesale and distribution industry. If at all, CRM is finding limited use in their marketing departments.

There are two main reasons:
• Unique sales and support processes - The wholesalers' field sales reps need to perform tasks that require unique information and processes which are not available in generic CRM packages.

• Two tier customers- While most organizations are prospecting, selling and serving the same customers, wholesalers need to develop and maintain relationships with two tiers, namely; their retailers and the consumers.

These unique characteristics make generic CRM systems unsuitable to service the wholesale industry. The impact is most noticeable in the following key areas:

1. Customer Management
In most industries, the sales team is focused on prospecting and qualifying new customers. Generic CRM systems provide tools which log and manage the prospecting and qualification process. This leads to an optimally managed sales pipeline.
However, the main task of sales reps in the wholesale industry is to; educate existing customers (retailers) on new products, present these products in the most compelling manner, and help them maintain optimal stocking levels of the best-selling products. For this, ideally, they need a smart e-catalog ordering application that is integrated with their ERP and provides critical real-time sell-out and inventory information. No generic CRM provide this type of information.

2. Campaign Management
In most industries direct marketing efforts promote products to the same market that the sales department is addressing. However, in the wholesale industry, the marketing department has two separate target audiences: the retailers and the consumers.

With respect to the retailers; in addition to the standard marketing solutions offered by generic CRM systems, wholesalers must manage and control how third party retailers are presenting the merchandise. A display management solution is required which will manage the pictures taken by sales reps when they visit retail outlets.
With respect to the consumers; wholesalers employing generic CRM solutions cannot reach out to the end-users of their products as they do not have access to the customer information which is under the control of the retailers. To overcome this, wholesalers need an application that would collect this information for their retailers. After retailer approval, this solution will generate campaigns without the wholesalers seeing the actual consumer information. Again, generic CRM packages cannot address these requirements.

3. Service/After-sale Management
In products that have warranties, the retailer collects customer information at the point of sale during the sales process. On the other hand, in most cases the first contact a wholesaler has with a consumer is when a service call is registered. At this time they must validate the warranty before providing services. Reproducing the proof of purchase or warranty registration is often time consuming and frustrating for the customer. Automatic registration of warranties at the time of purchase would overcome this.

Furthermore, most service calls are both originated and terminated at the retailer. Timely access to this information is valuable for the wholesaler, who can then track and manage the complete process while informing the consumer in real-time of the progress. Again, generic CRM packages cannot address these requirements.

Conclusion: In contrast to most industries, the wholesale industry requires a CRM application that addresses a unique set of requirements that characterize the wholesale and distributor industry.
by Ofer Yourvexel
References and Bibliography
Ofer Yourvexel is CEO of WRNTY, a company that provides software solutions for wholesale distribution including THE WHOLESALER CRM tool.
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