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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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Vital stats

  • 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

Get Those Quotas Moving (Upward!) In 2018! 5 Things Your Salespeople Can Do

Fewer than half of salespeople make quota, on average. Here are some best practices for to help them hit their targets in the new year.

John Holland

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Whether they had a tremendous 2017 or a difficult one, sellers likely hit the re-set button with the start of this new year. And that button push probably was accompanied by more aggressive quotas for those sellers to achieve in 2018.

So, what should sellers do to gear up for the coming year? As 2018 gets under way, here are five things I can share to help sellers get off to a good start.

1. Avoid stale quotes and proposals

Unlike fine red wine, proposals that have been in the sales pipeline more than 45 days old aren’t getting better. Many of them, in fact, are likely to have “no decision” outcomes.

So, if you’re the seller, what’s going on? There may be instances where your prospects have chosen a competitor and not given you the bad news. My suggestion is to send a snail mail letter, “return receipt requested,” to the highest level you’ve called on within the account. State in the letter how long the proposal has been outstanding, noting that you haven’t been updated on its status and that you intend to withdraw if you don’t hear anything back.

Related: 3 Questions To Guide You To Success In 2018

The hope is that your letter will cause the buyer to contact you and say there is still interest. If that’s the case, you can ask to revisit the opportunity (help facilitate a cost vs. benefit analysis) and see if a revised recommendation can be made.

If your letter doesn’t elicit a response, you can safely remove it from your forecast. While that’s not the desired outcome, you’ll have the benefit of a more realistic view of the size and health of your pipeline.

2. Create add-on opportunities

Sellers often believe that if customers have additional needs, they’ll proactively reach out. Certainly, close rates will be higher when there is an existing relationship vs. when sellers are closing new accounts. That’s why sellers should take a look at each client and try to determine potential business needs that might be addressed through the use of their company’s offerings; they should then proactively contact the key players who might be interested.

The key to initiating add-on opportunities is taking executives from latent to active need for a company’s desired business outcomes.

3. Be realistic with nurtured leads

If the cost of your offerings exceeds $50,000, you may want to take a hard look at the entry level that nurtured leads provide. My view is that many of those leads get sellers in touch with people that are doing product evaluations. So, those people may not be working with budgets and have not identified potential areas of value/payback that can be realised through the use of your offerings.

Ask yourself if the contact you’ve been given is a potential champion who can provide you access to the key players you must call on to sell, fund and implement the offering being considered. If not, I suggest you treat the contact as a coach that may be willing to get you an introduction to a higher level that may then serve as your champion. My thought is to gain access to people who will see value in your offerings.

Related: How South Africa’s Small Businesses Plan To Invest Their Money In 2018

4. Ask for referrals

Satisfied customers can be under-used assets, especially if sellers can help them quantify results.

My preference is that sellers break down benefits and values specific to titles and outcomes that have been achieved using those sellers’ offerings.

Once quantified, sellers can ask if their customers know of any other individuals or companies they could be referred to.

5. Plan a sales cycle ahead

When I was in engineering school, I was a “just-in-time” learner in that I studiously avoided professors who assigned homework and also approached midterm and final exams with some last-minute cramming.

Some sellers follow my academic model – and that’s not smart: In terms of their year quota, many sellers who are not YTD against their numbers believe they can close enough business in the last quarter to make up for their previous gaps. But this is a very stressful strategy, and there will be times when sellers run out of runway.

An alternative I’d suggest is for sellers to break their quota into monthly increments and multiply that number by the months in an average sales cycle. They can then estimate their close rates and set pipeline thresholds they should try to exceed.

Once they’re at the stage of interviewing committee members, sellers can then negotiate their activities and time frames via a written document with buyers (I call this pipeline “E”). Here’s an example of how to project ahead:

  • A seller has a $2.4 million quota ($200,000/month).
  • Her average sales cycle is four months and her close rate is 50 percent.
  • Therefore, her “E” target is to close $800,000 or more every four-month period.
  • At any time, if she is YTD or better, her E target will be $1.6 million in her pipeline.
  • In a given month, any shortfall from YTD must be doubled and added to that $1.6 million; business development efforts must be ramped up.

Being aware of YTD performance to date and projecting the sales cycle that’s ahead on a monthly basis can reduce stress levels during Q4.

And reducing stress is good, right? I hope these tips can help make your 2018 a great, and de-stressed, year.

This article was originally posted here on Entrepreneur.com.

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Sales Strategy & Management

(Podcast) Are All Prices Negotiable?

Person, socialisation, product, place – what are the key differentiating factors between those who negotiate price and those who don’t? And who determines the value of a product?

Nicholas Haralambous

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What is up for negotiation? When should you be negotiating prices, and when should you be open to negotiating prices with your customers?

Person, socialisation, product, place – what are the key differentiating factors between those who negotiate price and those who don’t? And who determines the value of a product?

Listening time: 8 minutes

Related: (Podcast) Phone Calls Often Solve Email Problems

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Sales Strategy & Management

Sales Leadership: The New Frontier

The Leadership skill of Influencing people increasingly trumps “hard selling techniques” as people enjoy the feeling that they are forced into buying a certain product less and less.

Dirk Coetsee

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“Once upon a time only certain people were in sales. Every day, these folks sold stuff, the rest of us did stuff, and everyone was happy. One day, the world began to change. More of us started working for ourselves- and because we were entrepreneurs, suddenly we became salespeople, too. At the same time, large operations discovered that segmenting job functions did not work very well during volatile business conditions-and because of that, they began demanding elastic skills that stretched across boundaries and included a sales component.” – Daniel Pink

The transformation of sales persons to Sales Leaders is not only the essence of this article but increasingly becoming a necessity, considering the skills demand required to convince people to buy your product or service within an modern environment wherein the consumer is spoilt for choice.

Related: 3 Strategies For Closing Sales Without Picking Up The Phone

In general staples in the make up of old school sales training was and in some cases still is: Product knowledge, fielding sales calls in a friendly way yet creating urgency, learning the ability to overcome client objections and of course do not forget the all-important methods of upselling.

All those elements of selling are still important in general yet “soft skills” such as active listening, handling conflict, and above all removing the emphasis from selling a product or service to selling an enhanced lifestyle or life experience has become the new frontier for the sales game.

The Leadership skill of Influencing people increasingly trumps “hard selling techniques” as people enjoy the feeling that they are forced into buying a certain product less and less. The “parrot method” of drilling sales scripts into the salesforce of the company is slowly but surely becoming obsolete as people want to feel that they are being cared about and considered within the sales process as individuals. “Caring for the other person is the only leverage in any conversation”, Gary Vaynerchuk says.

The above theory calls for a balance between Sales Leaders whom inspires their sales teams to create a personal, professional, and vibrant environment for their customers wherein which they are highly motivated to buy, and Sales managers whom monitor the key sales metrics and checks that sales procedures are being followed. In the modern world both Sales Leadership and management are needed at each end of the balancing scale.

Still, to this day an unfortunate large proportion of sales people are like lambs put to the slaughter, within some situations, as the only weapon taught to them is product knowledge and wearing a smile and then suddenly a very unhappy customer unleashes their anger upon them, and now the poor sales person has no knowledge in terms of how to deal with conflict, generally speaking. How to cope with and overcome conflict and other negotiation skills has become paramount in sustaining very good client relations.

Ethical Leadership is also strongly put forward as a necessary component of any sales training or course through this article. Sales techniques filtered through the companies Vision, mission statement and value system to test its validity and alignment to the companies’ culture can be increasingly effective as opposed to simply applying generic methods of selling which is not always aligned to the company ethos. A high level of ethics amongst Sales Leaders can ensure that after sales promises are kept and that the product sold is in effect as good as propagated by the sales person.

Related: The 5 Best Actions You Can Take To Improve Sales Calls

When a servant leadership culture is prevalent within your company it goes a long way to ensure that your sales people create a caring and positive experience complimented by an enhanced after sales service. Servant Leadership within a sales context is to put the customers’ and teams’ purpose above the individual team members purpose and that by itself is a potential multiplier of sales performance.

A highly important factor within the context of sales performance is the sales Leaders’ ability to formulate the right questions to be asked of the client in order to create a very pleasant experience. Statements in general can be quite dangerous as it is normally viewed as final and very hard to take back once communicated. Questions on the other hand requires an answer and when posed in a caring way can quickly establish rapport with a client.

Subtle nuances picked up by the Sales Leader through asking the right questions can greatly assist in creating positive client engagement. A practical example would be to refrain from the very obvious question of:  how are you? People are so used to being asked this question that they are not likely to give you a very open and honest answer and will be likely to provide you with very generic answers such as, “Fine thank you, “Well thanks and you”, and so forth.

By very simply changing the question to: “How are you feeling today? “, the very perceptive Sales Leader can relatively easily pick up on the client’s emotional state and adjust the conversation from there in order to create rapport.

In Summary, this writing actually asks one question to all CEOs’ and/or boards that must take their companies forward towards a desired future state: Do you want sales people and managers whom are likely to maintain the status quo, or do you seek Sales Leaders whom will challenge the status quo and will always be willing to ask more of themselves in terms of increased skill levels and performance?

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