How Scrambled Eggs Can Help Distributors Sell More: Part Two

Last month we introduced this series, which aims to boost your sales with scrambled eggs. Scrambled eggs? Yup. You can read our first installment with a complete explanation here; but, basically, we think sales and operations shouldn’t be independent of one another. We suggest taking basic operational structure and principles and mixing them into your selling approach to fry up a more appetizing, protein-rich, top line.

Our first strategic recommendation had to do with hiring. And, now that we’ve helped you get the right people in place, we’re going to tell you what we think about compensating them. Because we all know the truth … MONEY MATTERS!

Strategic Opportunity #2: Compensate More Intentionally

Whether you have been fortunate enough to bring on the most motivated people; or, you’re committed to making the best of your existing team, you must keep them hungry, and make them accountable. How can you do this? By adjusting the commission structure for your salespeople! We recommend doing this in two key ways: on dollars earned and dollars paid.

Dollars Earned
If your commissions are centered only on gross sales, or if you’re paying salary plus straight margin, then you could be missing the mark. Satisfactory volume can be achieved simply by maintaining existing, or grandfathered, accounts and standard orders; but, that does not steadily increase your company’s top line over time nor does it help you create business longevity. It can make you dependent on the same core businesses; and, you’ll feel the impact of their natural ebbs and flows more than you should. Yet, one Net New account, or additional product order from an existing customer, could bring in thousands of dollars per month or year. It can also provide more depth to your business.

It may seem small, but merely getting in a company’s payables system is a great sales goal. Once you’re in, they’re more likely to call on you in the future; and, over time, it can become a big account.  Another goal could be getting on an approved vendor listing.

If organic growth is more appropriate or appealing for you, then another excellent goal might be to focus on selling more of one or two  certain products. Your aim might be to shift existing purchases of those items away from other vendors to diversify, while expanding orders from existing customers. Regardless of the goals you choose, incentivizing your salespeople to pursue new business can pay off for both of you.

One operational change to achieve this growth is to develop a routine promotional program that becomes a process for “feeding” your salespeople. The word “routine” is key here, as that’s what makes it transition from isolated sales tactics into strategic (and standard) operational procedure.

The particular promotions that work for you will be dependent on your customers and your salespeople; but, once you figure out what makes each of them tick, you can create spiffs with that in mind. It may be a “deal of the day” format, an individual product focus, special terms on a short-term basis for new customers, or all of the above. As long as you’re consistently providing a reason for your salespeople to talk with new (and existing) accounts, you’ll be approaching sales with a more structured, operational mindset.

Another operational shift is variable pay. If you make commissions variable, weighted or scaled, (not only by volume, but by age of account) you could motivate your salespeople to bring in more business. In  comparing  it to an operational principle, think of it as buying 60 days of supply versus automating Purchasing within Eclipse. In the old days, you would buy 60 days of demand for all items; but, with Eclipse you variably purchase items depending on their demand.

The same can be said  for using a fixed percentage commission plan based on volume. It’s simple and familiar; but, it’s the method from days gone by.  Using it probably isn’t going to produce the results you need. Applying a variable commission structure may seem more complex; but, as long as you invest some time up front, it will be much easier, and more fiscally beneficial, in the long-run.

To automate the payments, you can apply your desired variable commission structure to Eclipse’s settings. However, keep in mind that Eclipse can’t always accommodate these changes out of the box. Depending on what you have in mind, you may need a custom report to handle it for you.

Dollars Paid
When you’re ready to truly blur the lines between sales and operations, consider ‘paid when paid.’ It works exactly like it’s name; and, when you switch to it, salespeople are paid when the customers pay, rather than when they are invoiced. While this is a somewhat controversial and sensitive subject, there is no doubt that ‘paid when paid’ further engages salespeople in the business and holds them accountable for their sales. They become ingrained in the collections process; and, they retain their point-of-contact status with customers. This can improve cash flow because checks aren’t being cut to salespeople prematurely; and, a more invested party is involved in collecting payments. From a system perspective, Eclipse handles this process very well.

Now, we’d be lying if we said any of these transitions would be seamless for your salespeople. Even though this kind of change has the potential to garner them (and you) more income, and it will motivate them to sell more, it is still change. And, it’s change that impacts paychecks. Nobody likes it when you mess with their money. So, we suggest lots of lead time, over-communication, and training to help them understand and prepare for the change. For example, typically ‘paid when paid’ works best when there is a six-month transition period to allow for adequate preparation and all commissions to cycle through.

At the end of the day, you have to do what’s best for your organization; and, management has to have their eyes on the long-term health and profitability of the company. But, it doesn’t have to be at all costs; and, it doesn’t always have to sacrifice people’s feelings or the food on their plates. If you need help making any kind of transition, Zerion always is available for consulting, custom reports and more.

Eclipse Tip: Exclude from Check Avail/Cycle Count

If you do any light manufacturing, it may be helpful to use priceline maintenance to exclude some items from check availability or cycle count. In this short video overview, Tony King will show you how to do that.

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Eclipse Reporting: 3 Ingredients for Success

I’m a big fan of cobbler. There’s just something about the gooey, warm fruit, contrasted with cool, melting ice cream, and the finish of a crispy texture. With peach season at its peak right now, ending the day with my favorite summertime treat cancels out any struggles of the workday. Or, does it? When it comes to reporting, most of our customers might disagree. In fact, 1/3 of Zerion’s customers say that reporting is their biggest hurdle in Eclipse. Numero Uno! And, we can understand why. Eclipse is absolutely awesome at collecting data, but it’s pretty darn lousy at getting it out.

The Gaps in Eclipse Reporting
The standard reports that exist in Eclipse, as well as interactive reports (or queues), are Eclipse’s bread and butter when it comes to reporting. They are meant to cover the fundamentals. However, there are holes in the output you can generate … lots of holes.

This is somewhat expected with any kind of canned reporting; and, it’s not so bad because you can fill the gaps with custom reports (via Report Writer) that perfectly suit your company’s needs, taking reporting to the next level. Sweet! But, wait … there’s a catch: most users do not consider Report Writer to be a user-friendly tool. It’s not something you can give to a basic user if you’re expecting decent results.

Users who have the privilege of running on Solar are privy to something called “Eclipse Reports.” This is Report Writer in fancier clothes. It has a much friendlier interface so that an end user can actually extract what he or she is looking for. But, wait … there’s another catch: it’s easier; but, it’s only easier because it’s focused on creating basic reports. You shouldn’t expect complex results from Eclipse Reports.

The Solution
So, if standard reports aren’t enough, and custom reports are too convoluted, where’s a troubled Eclipse user to turn? Our suggestion: Cobbler! If it can spin a difficult day into a perfect summer evening, it can turn bad reporting to good.

At first it may be a tough peach to swallow; but, you’ll need to combine the use of standard reports, Report Writer AND a third-party business intelligence (BI) tool if you want to operate at your finest. Standing alone, none of these three tools provides an end-to-end reporting solution. But, strategically cobbling them together will help you optimize the data that’s anxiously awaiting your extraction.

3 Steps to Put it Into Practice
Here’s a generic strategy to get you going:

1. Cover the must-do’s. You need to start with the fundamentals. You should be utilizing at least these eight standard reports on a daily basis:

• Customer calling queue. This is every salesperson’s dream. It allows management of tickets before they go out for delivery, and provides motivation for customer follow-up.
• Trouble queue. This lists tickets that are intended to ship before you have the material.
• Review PO backorders queue. Verifies POs that were backordered at the receiving dock to find out when they will actually arrive.
• Freight audit report. Assigns freight to sales orders from procurement POs with freight on them.
• A/R Collection queue. Designed to help A/R people systematically collect monies due.
• Unavailable queue. Tickets that were attempted to print but couldn’t because some items weren’t available.
• GMROI report. Helps to analyze what your turns are for your company.
• Transfer register for disputed. Helps you resolve discrepancies between what was shipped and what was received from branch to branch.

2. Get help creating custom reports. Face the reality that you need custom reports, but don’t waste your time getting them. Reporting is an investment; but, it will quickly produce an ROI with time saved (and possibly knowledge gained). In fact, custom reporting is one of the most common reasons that clients utilize our services. Whether you hire us, Eclipse, or someone else, recognize that it may take you 40 hours to develop the same report that a seasoned consultant can create in three. Someone who knows his or her way around Report Writer can get at data that most users can’t, often producing a better, more functional report in less time. Even if it can’t be done in Report Writer, custom programming can usually deliver what you need.

For example, Zerion recently cut the time Bakersfield Pipe & Supply was spending on a report by 96%. The Purchasing manager said, “I had to let you know the time that you saved me with this. Because merging three reports was so tedious, it usually took me a day and half, maybe 12 hours from start to finish. From the time I ran the [new] report, tweaked it, and sent it completed was 30 minutes! I am doing my happy dance! Thank you and thank you again!”

Also, another customer was spending 3 – 4 hours creating a rebate report for a vendor once a month. We developed a custom report by adding columns and formatting to the exact specifications of the vendor. This reduced their time to just 30 minutes each month. 

3. Sharpen your intellect with 3^rd party software. Even with the best use of Eclipse’s canned reports, and well-done custom reports, there are no intuitive capabilities to speak of. In other words, you don’t know what you don’t know. These are reactionary tools that don’t necessarily solve problems. Even with Report Writer, you must first know what questions to ask it.

This gap can only be filled with third-party BI software. Expanding your reporting capabilities will enable you to identify opportunities, such as with sales, inventory and financials. You’ll more clearly understand your performance so that you can gain efficiencies and make smarter decisions.

There are several options in the Eclipse space for you to consider, but we happen to be partnered with phocas. We choose to work closely with them because we believe their solution best fills the void for Eclipse users. Just a few of the things we like about them are: a fixed implementation fee; a user interface designed for the end user, not an IT person (which eliminates the IT bottleneck); and, a subscription model with a quarterly opt-out, meaning phocas stays engaged. Also, for the second year in a row, phocas has been named BI Vendor of the Year at the Software Satisfaction Awards.

To date, there are over 50 Eclipse customers on phocas; and, we’ve personally been involved with 40 installations. We weren’t initially involved with Eclipse user Universal Supply Group when they implemented phocas (athough we’re getting involved as of late), but their testimonial speaks volumes. The CFO remarked that, in the first few months, the company gained an additional $20,000 in rebates. He said that with Eclipse it would’ve taken “days to write reports, combine the data, load it into Excel and so on. Added to which, quite often errors would creep in and we’d have to do this again every month.”

The Cobbled Conclusion
The conclusion we assume you’re coming to is that, unfortunately, there’s no easy answer for reporting with Eclipse. There’s no cut and dried solution and no out-of-the-box perfection. But, there is good news: there’s amazing data of all kinds multiplying every minute on your server; and, it can be retrieved, compiled and analyzed to greatly enhance your company’s performance … it just takes a little bit of cobbling.

Eclipse Tip: Re-Order Pad

Using the re-order pad in Epicor Eclipse can help you save time by accessing your customers’ recently purchased products. In this short video overview, Tony King will show you how to use it.

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