visit to order time: what it is and why you should care | handshake
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Visit to Order Time: What It Is and Why You Should Care
In this Wholesale Metrics series, we talk about some of the most important wholesale statisticsyou and your business should be tracking.
Having had the opportunity to speak with many wholesale brands about their operations, ourresearch shows that generally, wholesalers are only tracking dollars and cents (total sales,profit margins, expenses, commissions, etc.). We understand that cash is king, but by notmonitoring other statistics about your operations, youre also leaving money on the table.
In our last Wholesale Metrics post, we talked about the importance of fill rate, or the percentageof orders that get shipped in full and on time on the first attempt. Today, were going to highlightvisit to order time, which is the time between when an orders captured at a store visit or tradeshow to when its placed.
Why does visit to order time matter?
Visit to order time is a simple measurement of the amount of time that elapses between themoment you know what the customer wants to the moment your distribution center receives theorder.
As you already know, when your customers need something, they need it now. Visit to ordertime is a crucial segment of your overall fulfillment time, which is a determining factor in
customer satisfaction and retention rates. Customer retention, in turn, has an enormous impacton your profits over the long term. The cost of bringing in a new customer can be up to 7x morethan retaining one, according to KissMetrics.
If you think about overall fulfillment speed, there are really only three periods of time you caninfluence:
How long it takes for that order to get to your distribution center or manufacturer, i.e. visit to1.order timeHow long it takes for that distribution center to process and ship the order2.How long that order is in transit before finally getting delivered to your customer3.
Lets think about those three segments. Out of the three, the stage 1 visit to order timeline isby far the easiest, cheapest one to control. It is the step closest to you and your sales team,and there are existing tools you can leverage to shrink it down (more on this later).
By contrast, stage 2 is taken care of by your fulfillment center. Depending on how muchinvolvement you have with that warehouse, you may or may not be able to directly influencehow quickly they process orders once theyre received. Even if you do have some modicum ofcontrol, its much more challenging to hold them accountable to a certain standard.
Likewise, Stage 3--the actual transit time--is almost impossible for you to control unless youshell out more cash for expedited shipping. Upgrading shipping speeds can be expensive,making it an impractical long-term approach for many wholesalers.
In sum, visit to order time is a relatively easy fix, making it one of the most important metricsyou can track as a wholesale business. Now lets look at why visit to order times are too oftendrawn out, as well as how to shorten them.
What causes visit to order delays?
Visit to order delays are the result of inefficient order writing and submission processes. Manywholesalers are still writing their orders on paper and faxing them to their back offices, wheredata entry staff then re-enters those orders. Some companies have their sales reps do the dataentry process themselves, and their busy schedules often dictate how long it takes for an orderto be placed.
This order writing/submission process can differ slightly from company to company, whether faxmachines, phone calls, emails, or excel sheets are involved. Ultimately, however, delays stemfrom the fact that orders are required to be written twice.
Another negative side effect of handwriting and/or faxing orders is illegibility. Customer serviceteams may need to make phone calls to confirm a SKU# or quantity because they cant readwhats on the page. In the end, the overall cost per order increases with each man hour it takesto process it. As one wholesaler put it, every time I have to touch an order, Im losing money.
How can you reduce your visit to order time?
In a world where were constantly connected, theres no reason for order submission delays.
Indeed, there are existing tools that can virtually eliminate the time between when an orderscaptured and when its placed.
Sales order management software is one such example. By replacing manual order writingprocesses, your sales reps can write an order in the field and instantaneously sync it with yourback office systems for fulfillment.
At the same time, they can send a confirmation copy to your customers, and the order can thenbe shipped out on the same day it was placed. This simple step removes the need for clunkyorder submission processes and extra staff to complete data entry tasks. In one fell swoop, youcan cut your visit to order time from 1-3 days to a few seconds. This has huge implications foryour business: shorter cancellation windows, faster cash flow, higher sell through rates, andhappier customers.
Look out for new wholesale metrics posts in the future for more insights on the statistics yourwholesale business should be paying attention to. Questions about visit to order time? Let usknow in the comments.Post originally located at: www.handshake.com/blog/wholesale-statistics-visit-to-order-time
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