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Sales Strategy & Management

Craig Plowden Launched A Business To Increase The Profitability Of Returns

A purely transactional approach to business will never result in customer loyalty. If you want to cultivate loyal customers, you need to care about their long-term happiness. That means thinking about reverse logistics.

GG van Rooyen

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  • Player: Craig Plowden
  • Company: Revlogs
  • Position: CEO
  • Established: 2007
  • Visit: www.revlogs.co.za

Sales are important, of course. No company can be successful without making sales, but there is an important issue that is often overlooked: Customers send stuff back. The more things you sell, the more things your customers will send back. It is inevitable — just a reality of doing business.

What is reverse logistics?

For this reason, reverse logistics is becoming an increasingly important issue. What is reverse logistics? It’s the process of picking up unwanted goods from a customer and returning them to a store or OEM.

Why can’t the original delivery company simply manage the process? Well, reverse logistics is more complicated than delivery. As mentioned, items are returned for various reasons, and the nature of the return will dictate what needs to happen with any particular item.

Is it broken? If it is, you need to assess how big the problem is. Is it a quick fix, or does it need to go back to the supplier? And what if it’s simply unwanted? Does it need to be repackaged, or is it still sealed and ready to be sold again?

“Around 8% of items sold are returned,” says Revlogs CEO Craig Plowden. “That’s a very significant number, so the way in which you deal with returns can have a major impact on your bottom line. When business is booming, it’s tempting to move product as quickly as possible, but you need to have some sort of reverse logistics strategy in place from very early on.

“I know of companies with millions of rands’ worth of dead stock just sitting in warehouses. They didn’t track these returns, so they don’t know why it’s there. What’s broken? What’s ready to be sold again? Trying to make sense of it all at this stage is very difficult.”

E-commerce returns are even higher and need to be handled with care

This is even more complex when it comes to e-commerce. Not only are you responsible for getting items to the customer and picking up any unwanted items, but the very nature of online sales means that returns are more likely. Customers can’t touch or test an item in store, so the odds are higher that they’ll be unhappy with it.

Plowden came up with the idea for Revlogs, a reverse logistics company that helps retailers manage returns, while working for a large international brand.

“We sold to large chain stores, and I was just amazed with the amount of returns we had to deal with on a regular basis. I realised that someone needed to be in charge of the process — someone needed to keep track of all these items travelling in the opposite direction,” says Plowden.

Related: 10 Ways To Get High-Roller Customers Spending More With You

Reverse logistics is a fundamental component of sales

Amazingly, the concept of reverse logistics didn’t really exist in South Africa — at least not as an important and explicit component of the sales process.

“It’s only in the last five years, or so, that things have changed,” says Plowden. “When we started, it was hard to convince companies of the importance of reverse logistics. But people are catching on now. They’re realising how much money is being wasted. The rise of online shops has also had an impact, since getting things returned when you’re a purely digital business can be tricky and expensive.”

Keep your customers happy

So, why is reverse logistics becoming such an important issue? Ultimately, it’s all about customer service. Some items will be damaged or faulty, and will need to be returned, but that’s not the only thing driving the growth of reverse logistics.

There’s also the fact that it makes good business sense to allow customers to buy something and return it without hassle. A customer might, for example, like being able to try on several outfits at home and know that any unwanted ones can be sent back without any fear of losing money.

“As a business, you want to have a very generous returns policy. These days, you can’t only take something back if it’s broken. You want the purchasing experience to be pleasant for the customer, and that means giving them the peace of mind that something can be returned with ease.”

Make your returns process easy and convenient

“In other words, the easier the process of returning something will be, the likelier someone is to buy it,” says Plowden. “It’s all about ease and convenience. If you make things hard for customers, they’ll go somewhere else.

“Of course, a generous returns policy is great for the customer, but not so great for you, since you’re left having to deal with the logistics of the process. To make sure that you don’t lose too much money, you need to track everything. You need to know the location and condition of every item. The quicker you can get things repaired and returned, the less of an impact returns will have on your bottom line.

Related: How To Win Customers Over With An Emotional Connection

“Effective returns management will also result in happier customers. If you can have broken or unwanted items picked up and replaced in record time, customers will buy from you again. But leave customers sitting at home with items they don’t want, and you’ve lost their confidence — perhaps forever.”

Create a solid reverse logistics strategy

So, how do you go about crafting a solid reverse logistics strategy? “Companies can create their own internal departments, or they can make use of an external reverse logistics service. It can seem like an unnecessary expense, but it will save you money in the long run.

“Good returns management will reduce costs, reduce admin, protect revenue, increase productivity and improve customer satisfaction,” says Plowden.

GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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Sales Strategy & Management

You Have Less Than 7 Weeks Left To Turn Your 2017 Around

Implement these 5 steps and achieve 2017 revenue targets and set up a great start to 2018.

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It’s no secret that 2017 has been tough for the majority, with less than 7 weeks to go before business winds up for the year. I’ve summarised an effective sales plan that will help you accelerate your way to success before the year ends.

Referred to as the “championship rounds” in boxing, the last few meters of a 100M sprint, be smart with the last bit of mental energy you have left and sell, sell, sell.

Implement these 5 steps and achieve 2017 revenue targets and set up a great start to 2018.

1Be Laser Focused on Your Customers

You’ll never be one size fits all to everyone, review your client base and define 3 to 5 groups of customers that your business serves, and solves problems for.

Grouping Map

  • Customers that behave similarly, have similar problems and face similar circumstances.
  • Define the groups by age, volume, category, geographic location, and similar demographics. The more components you assign to each group, the better you understand them, and effectively communicate your services to them, ultimately solving their pain points.
  • Personalise with a name it e.g. Sarah is a 30-year-old white collar worker that lives in the urban area, earns R30 000 a month in household income, she sends money back home each month “Black Tax” to support family members that lives in a rural area.

Related: Have We Lost Our Face-To-Face Sales Ability?

2What Goes Through Their Minds Before Making a Purchase?

  • Whether it’s subconscious or psychological, people buy solutions to problems, especially in a tight economy.
  • In order to stay relevant to your customers yesterday today and tomorrow. Continue to evolve and develop your products and services to ensure you are solutions driven.

3Build The Right Pitch

As each of your customer group face their unique challenges. Build a pitch that positions your communication for each customer group to maximise effectiveness.

Follow these 5 important pitch building steps

  • Who is the consumer?
  • What is the pain point that you’re looking to solve?
  • What is the setback for your consumer to not have that pain point solved?
  • What do you do to solve that pain point?
  • What is the result for your consumer, of having that pain point solved?

Once you’ve built the pitch, utilising them adequately, and start selling!

4Implement Your Strategy

This revenue-generating strategy has 2 aspects: hunting (Active) and farming (Reactive)

  • Hunting takes on the form of outbound action. Searching, meeting and engaging with your potential clients. In short, stepping out and finding your customers.
  • Farming is more reactive, it is known as inbound selling. You farm by leaving breadcrumbs that lead your customers towards your services. This is done by generating practical content and using digital platforms to attract attention towards your services or products.
  • Build a calendar for your hunting and farming activities, for the next 12 weeks, and specify tasks for each day.

Related: Savvy Sales Skills To Grow Your Franchise Footprint

5Execute, Measure, Adjust

  • Hunting: Make 10 calls before 10 am each day, make use of a sales script, this forms part of your daily activities.
  • Farming: Schedule a week’s worth of social media content to post.
  • After week one find out which group gives you the best response, tweak it & carrying on.

This plan will help you to notice which approaches yield the best results. You’re able to remove what doesn’t work and focus your time on what leads to the most sales. May this help you turn the last 7 weeks of the business year into a profitable one.

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Sales Strategy & Management

Email Is Great But Face-To-Face Meetings Are 34 Times More Successful

If your goal is to communicate, talking is a lot better than typing.

John Rampton

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We have all of the advances in communication technology – Skype, FaceTime, Slack. etc. Yet, nothing beats a good, old fashioned email. It’s quick, easy-to-use and, best of all, it’s free.

Email remains one of the most effective and important marketing channels for brands. It’s even popular among millennials since they don’t enjoy talking to people on the phone. I love email but recent research has found that it may not as persuasive as talking to someone face-to-face.

The research was reported in Harvard Business Review and published in the Journal of Experimental Social Psychology. It suggests the success of a face to face is due to the lack of personal connection we experience today. The lack of actual one-on-one connection to someone can ultimately cost us what we really want.

For the study researchers Mahdi Roghanizad and Vanessa K. Bohns instructed 45 participants to each ask 10 strangers to complete a survey. Half of the volunteers sent their requests via email while the other half found people to ask in person. The exact wording was used for both groups.

The experiment found that the face-to-face requests were 34 times more likely to garner positive responses than the emails. As Bohns explained in the Harvard Business Review: “In our studies, participants were highly attuned to their own trustworthiness and the legitimacy of the action they were asking others to take when they sent their emails. Anchored on this information, they failed to anticipate what the recipients of their emails were likely to see: an untrustworthy email asking them to click on a suspicious link.”

However, the researchers did not look into how these results would have differed if the participants had contacted acquaintances instead. It’s possible that asking someone you know as opposed to a stranger through email would have better results.

Related: From Bane To Boon: How To Turn Email Marketing To Your Advantage

There’s something about face-to-face communication that email, or any text-based communication for that matter, just can’t top.

Personal communication seems best – whether you know the person or not. You should never underestimate the power of face-to-face communication.

1Nonverbal cues

Body language is extremely important when it comes to communication. It’s not how you said something, but also your facial expressions and body posture. All of these cues are lost in emails.

In fact, around 93 percent of communication effectiveness is determined by nonverbal cues. And, that’s not limited to strangers. Studies have have found that even you closest friends can’t interpret your emotions in emails.

2Authentic, trust building experience

All people, even millennials, still demand intimate and face-to-face encounters to build a more authentic and trustworthy relationship. At some point we should communicate with other people through a webcam, FaceTime, or conference tools like GoToMeeting.

3The power of touch

the-power-of-touch

According to Psychology Today, humans are wired to interpret the touch of our fellow humans. Touch can promote bonding and cooperation. Studies have found that seemingly insignificant touches yield bigger tips for waitresses. People shop and buy more if they’re touched by a store greeter. Strangers are more likely to help someone if a touch accompanies the request.

4Drives participation

Maybe it has something to do with mimicry and mirroring. When you’re in the same room with someone else it encourages them to engage and participate in whatever action is going on. So, if you ask a colleague to do a task, there’s a good chance that the person next to them is going to get moving instead of sitting there doing nothing.

Related: Email Campaign Wisdom From South African Digital Marketing Sages

5More efficient

Face-to-face meetings are usually shorter than conference calls. That’s probably because when on the phone everyone sits there quietly with their phones on mute until the discussion is over. I’ve been guilty of this numerous times.

Since you can’t pick-up on body language, you can’t see how disengaged the audience is. This action can keep you rambling on while the attendees start to drift in and out.

With face-to-face situations you can pick-up these non-verbal cues, which in turn pressures you to get directly to the point.

6Easier to sell yourself

It’s much more difficult to sell yourself over an email. Take Marie Forleo and Gary Vaynerchuk, for example. They’re both extremely charismatic people who were born to be in front of the camera. No matter how knowledgeable they are, reading a piece of text from them is nowhere near as engaging as watching one of their videos.

The takeaway

Make face-to-face communication a priority whether it’s meeting a prospective client for the first time or scheduling semi-regular meetings with your team.

If you can’t do so in person, then at least use your webcam or apps like Skype. It’s not exactly the same, but it’s going to be more effective than only email communication – especially when you have a request.

Related: Email Campaign Wisdom From South African Digital Marketing Sages – Part 2

According to Bohns:

“If your office runs on email and text-based communication, it’s worth considering whether you could be a more effective communicator by having conversations in person. It is often more convenient and comfortable to use text-based communication than to approach someone in-person, but if you overestimate the effectiveness of such media, you may regularly – and unknowingly – choose inferior means of influence.”

Getting rejected in-person sucks. But, is that fear of rejection really worth avoiding a face-to-face when it’s far more likely that you’re going to get a “yes” instead of a “no?”

This article was originally posted here on Entrepreneur.com.

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Sales Strategy & Management

Why Selling Is More Important Than Building

Don’t start a business unless you know how you’ll sell your product. Once you start selling, you can build a track record. Once you have a track record, the world is your oyster.

Alan Knott-Craig

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Everyone told me I had a great business idea, but I’m finding it very hard to get traction in the market. How do I get people to know about my business? I can’t afford a big advertising campaign. — Anonymous

Most people think building product is the hard part about a start-up. Bad news: Building is the easy part. It’s sales that takes real hard work and brains. If you can’t afford to market your product, you can’t start a start-up. Before you start a business, make sure you have a customer. Minimise your downside risk by ensuring there is demand.

If you have a consumer product, the only way to grow without pushing money into marketing campaigns is by word of mouth. It takes a long time to build critical mass via word of mouth, so you need a long runway, ie. cash in the bank. Don’t start unless you have two years’ funding in place.

Finding your customer

If you have a B2B product, it’s a bit easier. Finding one or two customers is usually enough to pay your overheads. The trick is finding the customer. If you have no potential customers in your personal network, then find a partner that does.

I’m not making much traction with revenue generation. Everything hinges on conversations that are either not happening, taking too long or happening with the wrong people. Am I missing something or is it my lack of relationship capital? Should I get a job again?
— Anonymous

Related: 8 Tips for Dominating Online Sales

Here are some thoughts:

  1. If you don’t have enough cash, you have no choice but to opt for safer income and build a buffer before chasing your dream.
  2. If you can squeeze in another six months, do it. Give it 100% for six months, if you still have no success then give up. You’ll just feel foolish if you find out you gave up just before the finish line.
  3. There is no shame in quitting. Sometimes you’re on the wrong path. Don’t let your ego stop you from retracing your steps and taking another fork. You have one life, don’t waste it.

Keep chasing meetings with new people

I can’t give any advice or contacts that could increase your odds of success, except to encourage you to keep chasing meetings with new folks. Let your passion show and maybe someone will give you the break you need.

Success is a game of finding one backer. Forget about the 100 dead-ends, all you need is to find the one winning path.

What do you think of the experience paradox? Everywhere I look, you need experience to get a job, but a job to get experience. It seems you’re finally hitting the right level of experience as you’re getting ready to retire. Jobs are not my path. Your thoughts? — Josh

Which comes first: Sales or track record? How do you get your first sale without a track record? How do you get a track record without your first sale? It’s like trying to figure out whether the chicken comes before the egg.

The answer is: Your first sale comes first. When it comes to your sale, it’s not what you know, it’s who you know. Somewhere along the line someone needs to give you a break. A stranger won’t take a chance on you unless they have a reference from someone they trust. You need to shamelessly work your network to get your first sale.

Related: 5 Tips To Generate Sales Leads Through Social Media

You need to develop a network

If you have no network because you went to a crappy school, or your parents are poor (or dead), or you’re in a brand new country, or whatever, then life is tricky.

The only way to break into the system is to pick a company you admire and do whatever it takes to get a foot in the door. Work for free as the floor cleaner. Work so hard that it’s impossible to be ignored.

While working in that company, you are building a network of people that can one day potentially buy from you. When you’re ready, sell to that network. Once you start selling, you can build a track record. Once you have a track record, the world is your oyster.

Ask Al

Do you have a burning start-up question?
Email: alan@herotel.com


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