Many companies are working on their production costs to face growing international competition. But according to management consultants, the test for sales managers in reducing costs of sales and marketing. This may amount to 40-50% of all goods and is a hot topic on sales training. Consequently, small changes can have a major impact on profitability.
Marketing costs and distribution are generally set close to the production and supported by the manufacturer, market and end-user/consumer. In particular, changes in cost structure can be observed today in the following four areas:
1. The cost for processing orders
According to studies, the cost of processing orders between £ 40 and £ 60 per order, regardless of the different sectors. It is not uncommon for companies to enter 50000-100000 jobs per year. This huge block cost can be reduced in two ways: by reducing the number of orders, and extending the delivery time to reconsider the offer valuable outsourcing.
Of course, it only makes sense to reduce the number of orders you process, you can change the quantity of each order. To remedy this, it is necessary to abandon a portion of the cost savings for customers in the form of quantity discounts:
With this method, many companies have reduced their number of orders for almost 90% and therefore the efficiency of execution. Pre-order promotions as an incentive to choose longer periods are used. Most customers would be able to arrange long-term when they were acquired at a discount to their work.
2. The cost of storage
The most significant savings by streamlining periodically memory of your being. Some manufacturers take two, three months ago the production, storage, and two, three months ago, the production time, stored on the market. Customers usually a “reserve” a month is required to hold shares, so all in all, more than half the annual production at one time or another, preserved on average.
Just-in-time, which was criticized by many manufacturers as solutions is a laborious and expensive way to streamline your storage costs.
3. Distribution costs
Sellers often complain of sales training allows them to spend 30% of their time dealing with problems in processing orders. They specify delivery times for customers, send reminders about the delivery, etc. This is a huge waste of time and energy! The following proposals are intended to remedy this situation:
a. automated order processing, the information you have on the status of the production and delivery of a button.
b. Direct connection for access to representatives via laptop.
In addition, businesses can now afford not to directly visit each small customer. This can cause problems with some clients for years with “their” sales staff to conduct contacts. Moreover, these clients should be invited to a conference-dealer or twice a year and keep it on-line via the contact form.
What distribution costs associated with its business? Some people believe that the ceiling should be about 3%.
4. Service costs
Especially high-tech products such as computer systems, a significant amount of service. Today, many companies throw in a service contract purchased with the product, so customers a clear and predictable budget.
Service increasingly used for costs through the hot line. If a customer has a problem with his equipment, a service technician tries to solve the ‘phone. Hotlines effective technical experts should Manning taught in basic research and training of customer sales.
