Tag: self serve
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Demand Driven For Configurable Products
Lane Strategy
It amazes me how sophisticated companies are getting with their supply chains. The recession has forced even more sophistication. As a way to weather the storm, companies are segmenting their supply chains to manage demand volatility better. I was talking to Jack Becker, VP of Supply chain for an electrical goods company, who described this as “3 lanes on the highway”. We just call it the “Lane Strategy”.
The fastest lane is the stuff that customers buy a lot of, and we build often. The middle lane is slower stuff, tends to be more configurations. The slow lane is the one-offs and custom builds. The key thing to remember is that the segmentation is demand driven, based on what customers are buying, and what is moving through the supply chain.
The key success factor for the lane strategy is to have a method to convey the lanes to the sales reps and distributors. Sales is the “mouth of the beast”, and it drives volatility and cost through the supply chain.
“We have had numerous attempts at trying to create a segmented supply chain ”, Jack said. “However, the sales guys will sell whatever is easiest to sell, and what they know to sell. So we had to device a way to make it easy on them to sell what we wanted the customers to buy.” Success finally came when Jack implemented a sales tool that would recommend configurations to the sales reps, and color code based on availability and the Lane Strategy.
“We offer a configurable product. Our biggest opportunity is that customers do not fully specify what they want. They just specify a few features they want, and leave the rest to the sales rep. They want the sales rep to recommend a good choice. Like we see on Amazon e-store…. But we are not selling simple stuff like books. Everyone on our team talked and agreed about an “Amazon like strategy”, and we knew that we needed sophisticated tools to accomplish that for our products, which are highly configurable. However – if our sales reps could recommend a few configurations at the point of sale, it is a win-win”.
“Supply chain folks typically think about the supply side of the equation. The key to success for a demand driven supply chain is managing the demand at the point of sale. Recognizing this opportunity and leveraging it has been the biggest key to our success!”
Emcien offers a product mix optimization solution that is a sustainable solution and process for the lane strategy.
More details on the execution of this strategy in the next blog….
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Self Service for All Configurable Products!
Configurable products are complex. There are so many ways the product can be configured! As the choices grow, it makes it more difficult on the sales reps and channels to make sure that they are selling the right product to the customer.
I was talking to a Steve Wright, VP of Sales at a company that sells a myriad of electronic and electrical products. He told me about the pain of training his reps on the product! “My guys just want to sell! I have them locked up for weeks on product training.” The company measured sales productivity and Steve was feeling the pain. “I don’t expect sales reps to memorize all the names and contact info for the customers they are calling on. Why do I expect then to memorize the products?”
Today sales tools (CRM) include contact management and pipeline management. However, products are changing faster than customer contact information. Who is helping sales reps keep up with that?
The challenges in the field are:
- Sales reps will only sell a few familiar products
- Customers often end up buying the wrong product variant
Steve has over 900 sales reps in the field. His challenges are sales productivity due to high turnover, and training (and re-training!). The bigger challenge is customer service and product returns because they were sold the wrong stuff. The product returns/ customer remorse is 75% higher for configurable products. The dissatisfaction of “being sold the wrong product” tends to make customers move to a competitor.
We all know of an industry that was completely changed when their products became very easy to sell. The products are highly configurable. So configurable that we needed a agents to help us buy their product. Today customers self-serve this product on the web, and we love it! The industry is airline travel. Airline tickets are highly configurable with a myriad of choices for airline, price, time, fare, stay-over options, alternate airports, ……. the list is endless. Self-service has also made it very easy for customers to educate themselves on the product at very low cost. An educated customer is better buyer and is more comfortable with the product they buy. The cost to sell the product has dropped very dramatically. When is the last time you called a travel agent?
The airlines that quickly embraced this revolution had a competitive advantage for over a decade. American Airlines led the pack with the Sabre reservation system.
The technology has arrived to make self-service possible for all configurable products. Companies who embrace it quickly will enjoy a competitive advantage in their industry. This is a truly demand driven model, driving much higher customer satisfaction.
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How I want to buy a car
Every five or so years, I shop for a new car. I hate car shopping. The haggling, the long trips to dealerships way outside of town, the hours and hours of waiting, punctuated by furtive whispers to my husband, “Don’t give in! Stick to our budget! But don’t tell them our budget!” and similar. But that’s toward the end of the process. There’s a lot of work leading up to it.
First I hit the Consumer Reports site to research cars. A subscription is just $5.95 a month, but it auto-renews so you have to remember to unsubscribe or it quietly chips away at your wallet forever.
I find the five safest vehicles according to my car type and year. When I say new car, I just mean it’s new to me. I like to benefit from someone else’s new-car depreciation, which is something like 25% the minute you drive off the lot.
Anyway, I get on several different car sites like CarsDirect.com and AutoTrader.com to look for my next set of wheels. First I have to pick make and model, then enter my ZIP Code, then there’s a long list of cars. If I want to, I can see the list from lowest price to highest. The trouble is, I want to compare five different models and several different years. I’ve got to select the same filters over and over for all five and then compare the info. continue reading »
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