Sales Promises That Yield the Most Profit
Updated: June 1, 2005
In order to determine which sales promises will yield the most profit, your sales force will have to consider more than customer relationship management (CRM) data. They must start thinking about supply chain management (SCM) information, too.
For the most part, CRM and SCM have matured independently as concepts and technologies. Where CRM primarily revolves around revenue generation and customers, SCM revolves around cost reduction, efficiency, and suppliers. Despite different focuses, CRM and SCM efforts must be synchronized to maximize profit.
What You Never Want to Hear Your Salespeople Say
The worst words a salesperson can utter to a customer are "I'll have to get back to you." With no visibility into inventory availability and possible ship dates, a salesperson can push a large order when, in fact, the supply chain can only deliver a fraction of the order by the promise date. Meanwhile, the frustrated customer begins pricing a competitor.
Conversely, when the two technologies work together, salespeople can utilize concepts like Available to Promise (Is the product in stock?) and Capable to Promise (If the product is not in stock, how long will it take to get it to the customer?).
Are You Asking the Right Questions?
Forward-thinking business managers are asking even tougher question than whether or not sales and supply are working together. They're concerned with whether it is profitable to transact and serve that customer in the first place.
By utilizing the concept of Profitable to Promise, organizations gain the ability to make accurate decisions on whether to go the extra mile for an individual customer based on that customer's overall value to the firm. If a company knows which 20 percent of its customers make up 80 percent of its business, it can effectively allocate resources to that key group.
Profitable to Promise takes the integration of supply and demand to the next level by incorporating sophisticated customer valuation data with clearer visibility into production and inventory, then placing the insight in the hands of customer-facing employees.
Think Big, Start Small
Naturally, companies do not want to undertake CRM and SCM integrations that will slow down business because of their cost and complexity. They want solutions that are attuned to existing workflows and applications. For example, if sales agents keep key customer information in e-mail, a CRM solution should tie into that e-mail tool. Or if inventory planners use a specific spreadsheet application, the chosen SCM solutions should be able to tie into that tool.
When it comes to implementing Profitable to Promise, think big, start small, and then reap the benefits. Over time, small steps combine to make a much wider, positive impact.
Learn More
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Microsoft Dynamics CRM
Microsoft Dynamics for supply chain management
