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Technology To The Rescue
By C.J. Mittica
April, 2010

Got a business dilemma? Technology may be the answer. Get some tips from four distributors using advanced solutions to improve their businesses.

Janie Goldberg freely admits there was a time she had no idea what she was doing when it came to technology. The CEO of Omnisource Marketing Group (asi/287488) knew she wanted to utilize it to serve her company; she just didn’t know the best way to go about it. The technological momentum finally began to swing when she brought her son, Michael, on board as the vice president of the Indianapolis-based distributor; he helped install a computerized culture that continues to this day.  T“Any investment we’ve made in technology … I’ve never been sorry,” Janie says. TIt’s a sentiment that is increasingly being shared by distributors. Technology continues to be looked to as a magic potion to solve a company’s most pressing concerns.

Communication issues? Cost hikes? Efficiency problems? Inconsistent results? There’s a server for that. “Technology allows you to deliver a world-class solution at a very low cost,” says Anthony Poly, chief technology officer at Shumsky Enterprises (asi/326300). “If you try to do things manually, you’re going to have more errors and higher labor costs, and that’s just not going to make it for the long term in this industry.”

Business as a whole is looking to technology when it’s needed most. A December 2009 survey of CIOs, CTOs and other IT executives found that information technology was becoming more important to improving efficiency and reducing costs – and that their companies were less concerned about lowering their technology costs to get there. In addition, 65% of respondents expected investments in new technologies to increase or hold steady in 2010.

Distributorships on the cutting edge of technology are positioning themselves for a new era, with the idea that so much has changed in the economic fallout of the past two years. To them, being technology driven isn’t a generational thing, or a money thing.

“I think it’s a mindset, to be quite honest,” says Mark Graham, president of Rightsleeve (asi/308922). “And I think you’re starting to see the companies that have invested in proprietary technology will be that much quicker. It allows them to collaborate more. It allows them to be in touch with customers in a more efficient way.

“I really see in the next 12-24 months a huge divide between those that get it, and those that don’t.”

In other words, it’ll pay to be one of those companies that gets it, that understands how valuable technology can be to your business, that views technology not as an expense item but an investment in future success. Want your business to be that kind of company?

Here are examples of four companies that have a brighter future thanks to technology. Follow their lead – and ramp up your success as a result.

Optimizing A Web Site

Jim Franklyn believes clients have changed. They’re busier these days, and don’t have time to go through every drawn-out step of creating a promotional products order the way they did before.

That’s why his company has re-engineered its Web site to perform faster and more accurately for customers. “They want to go online and get it done and move on to the next thing because they don’t have time to mess with it anymore,” says Franklyn, the vice president of sales and marketing for InkHead Promotional Products (asi/231159).

No surprise then, that InkHead’s motto is “Speed Kills.” And indeed, the Web-driven distributor, which was one of Counselor’s Fastest-Growing Distributors last year, has been using technology to expand its business – while others have been focused simply on surviving. It’s experienced growth of 100% in the last two years – and 33% growth last year alone. More referrals in the past 12 months than the previous five years combined. An increase in revenue for the average order and a higher quality customer than before.

How is the Winder, GA-based distributor doing it? By trying to position itself as the top ad specialty distributor on the Internet. “Our Web site is our number one salesperson,” Franklyn says.

The goal has been in place ever since 2003, when InkHead’s three founders (software engineers by trade) entered the industry, partnering with a person with brick-and-mortar experience and concentrating solely on driving sales from the Web. The idea was to utilize search engine optimization to the fullest – making it so that when the average consumer would search for a promotional product through Google, InkHead’s site would pop up first. The target? Consumers who could customize and perfect their orders without having to ever pick up the phone, if they chose.

While a lucrative proposition, it also stands in contrast to an industry that prides itself on building relationships and accruing face time with clients – something which InkHead recognizes still must exist in some fashion. Besides the toll-free number that clients call should they need personal interaction, the distributor keeps tabs on its biggest customers (all users are registered, just like most online shopping sites). When certain revenue or order benchmarks are reached, the company assigns account managers to those customers; the managers will call as consultants to make sure the customers are getting the best products for the projects they’re working on.

The company execs freely admit that the technology has changed thoroughly since the Web site has launched, and they changed the company accordingly. Last year, for example, InkHead restructured internally – diversifying its support roles instead of seating everything within one person – to help serve customers who want to do more than place an online order.

“When we first started out on the Web site, we sort of threw products up and hoped people would buy them,” says Chris D’Agnefe, president and CEO. “Now we strategically put up the best-sellers and most popular items within their categories. We place them in certain places the demographic of the user is telling us to.”

Indeed, data is the holy grail for the company, which uses mountains of it, culled from its 20,000-plus registered users, to inform its product inventory and keep tabs on which markets are selling the most. Now, the distributor has learned it operates best when driving traffic by itself, and relies on its continual investment in technology to stay ahead of the competition. In a changing economy, speed still kills.

News Feed Tracks Company Progress

All it took was extra lines of code to have a monumental impact on the culture of Rightsleeve. The technology-savvy Canadian distributorship was already creating a custom order-management system when Graham decided to add an extra function: a Facebook-like news feed that tracked the critical selling and marketing activities of the company.

“All that stuff,” says Graham, “is served up in real-time chronologically in any given day so that we can tap into the pulse and the rhythm of the company.”

The best part is that the updates happen automatically as a function of the system. Rightsleeve employees can comment on the updates, just as one might respond to a friend’s post on her Facebook page. Graham notes how conversations spark between reps working on similar projects, sharing in a way that would suggest they’re right next to each other even though one rep may be traveling hundreds of miles away.

“These are key activities for us that keep the entire organization in tune with what everyone else is doing. It’s amazing how we’ve become that much more collaborative,” notes Graham, whose company’s use of technology won it the Dell Small Business Excellence Award in 2009.

The system (called ROMAN, or Rightsleeve order management) made sense for Rightsleeve, which has embraced an aggressive policy of implementing social media along with its multitude of other technology initiatives. The process began in 2004 when the distributor upgraded its Web site and was looking to do the same with its back-end processes and systems. After becoming dissatisfied with the standard order-management systems available – “I probably had a list of 200 things that I wanted,” Graham remembers – the owner decided the company should just do it itself.

The task was, as Graham puts it, “gargantuan,” but it turned out to be well worth the effort. New employees who were baffled by the industry became trained in a fraction of the time. The barriers of communication between departments dissolved instantly.

Says Graham: “The fact that it’s completely integrated and it ties in with our front end and our back end, their efficiency is probably 20 times greater than it was before. That’s yet another advantage when we go to the marketplace and we hire people.”

The distributor continues to reap dividends from ROMAN. Rightsleeve doubled its staff count within the last 18 months, processed 25% more orders with the same number of staff and upped its gross margins by 40% in the last three years. Graham credits this success to the fact that “we get great pricing from our vendors because they love doing business with us because it’s so easy and transparent in how it is we submit our purchase orders.” 

The next step is to use Rightsleeve’s extensive data – search patterns, client info, industry demographics and so on – to build what Graham calls “a socially
relevant search engine” for his own company. Surely that will draw some comments on the news feed.

CRM System Sets New Tone

When a super team is assembled to fix major problems, it’s usually a fictional construct (the Justice League and the X-Men come to mind). Shumsky Enterprises, however, made it a reality. The Dayton, OH-based distributor assembled a crack cross-functional team to evaluate its business processes once the company decided to create its own customer relationship-management (CRM) platform.

“You obtain a lot of ideas when you’re dealing with different people with different strengths and different skill sets,” says Poly. “It’s really a good collaboration to get everybody’s input and see things from a different point of view.”

By the middle of the decade, Shumsky was exploring both standardized and customized options for its internal quotes. The problems they were seeking to fix? Decentralized information, contacts lodged in individual Outlook e-mail accounts and inconsistent quotes emerging from the reps. “One of the things we wanted to do,” Poly says, “was have that information centrally stored in a database so that everyone who is working with that customer can access the data.”

To craft the customized system that best suited the company’s needs, Shumksy created a business review team by drawing from a variety of departments. Not only that, it interviewed all of its salespeople as well as order processing and support staff to make sure that everyone had a say. Once everything was planned out, it took a year to code and implement the new CRM system.

The benefits that ultimately emerged included: a standardized questionnaire for clients, a screen for recording project requirements that others could search later for ideas, several different pricing mechanisms, a pipeline analysis of sales for each rep and an automated response that tells reps when to follow up on an order. “Our clients enjoy that the quotes coming out of the system are all consistent now,” Poly says.

Initiatives like this are part and parcel for the technology inclined distributor. Its large fulfillment operation allows the company to process thousands of orders at a time. On the front end, its sister company, Boost Rewards, has created robust e-commerce Web sites for performance and wellness programs by integrating its platform with Amazon.com.

“I think it’s very important for companies to highly automate, especially if they have a large client that has a lot of transactions,” Poly says. “By implementing technology to its fullest, you can eliminate errors and you can provide a better quality of service to your customer. And I think if you really focus on the business process, you can design something that works well for your customer and works well for you.”

Distributor Goes Virtual

Omnisource Marketing prides itself in doing right by its employees. If family obligations arise or unexpected trouble pops up, it’s no problem for people to work from home. “Our major philosophy is as long as the work gets done in a timely and accurate manner, we don’t have to see somebody to know that,” says Janie Goldberg about a philosophy forged by her sensibilities as a working mother.

Adds Michael, her son and the company’s vice president, “It makes people more loyal, makes them want to work here. I see e-mails from people on Saturday night at one o’clock in the morning. There’s no requirement for them to do that. If they want to work at that time, they can.”

Many distributors have offered similar flexibility to their staff (and support for their offsite, constantly traveling sales force) for years. The difference in this day and age, however, is that technology has allowed employees to work more efficiently to a degree that simply wasn’t possible years ago.

Omnisource’s staff, for instance, utilizes IP phones and Web cams to sit in on meetings and offer presentations to clients. The company also has segued into a paperless office, and maintains both e-commerce and general Web pages for its clients.

It took time for the distributor to become so technologically inclined. Now, Janie says, the distributor isn’t cowed when clients ask for technology solutions the distributor hasn’t done before. More importantly, Omnisource utilizes its technology to open the lines of communication (such as electronic communication with vendors and direct-dial and individual electronic fax lines to allow customers easy access to their reps and key personnel).

“One of the things I feel strongly about technology is that it doesn’t replace the human interaction. It can enhance that greatly,” Michael says. “It’s something we really talk a lot about in our sales meetings. It’s still really important for our salespeople to pick up the phone and call their clients and also visit them face-to-face.”

C.J. Mittica is a staff writer for Counselor.

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