Opinion: The importance of operational excellence cannot be overstated

Operational excellence is the key to selling, says David Gilroy

According to the Oxford English Dictionary, an epiphany is a ‘moment of sudden and great revelation or realisation’, and I had one in 2002 while running my own company.

A friend enrolled us both onto a cold-calling course, which resulted in my belief that sales and negotiation skills are so vital to a successful trading business that they should be included in the national curriculum.

The trainers on this course had worked for Xerox in the 1970s selling photocopiers, and this was when no one could see the point of this new technology. Daring and radical sales techniques had been required. I wasn’t keen at first, but the sales training was a revelation – I was blown away. It completely reframed the way I looked at business, and I used the tools and methods I learned to good effect. An undoubted epiphany for me.

We all know that winning new incremental business in wholesale is exceptionally difficult. If I had a pound for every ‘new’ customer a salesperson promised to acquire for me, I’d be writing this from my villa in Barbados.

The falling profitability is a concern for wholesale

The reality is that customers shop around from all potential sources, including many from outside of wholesale. The emphasis should be on customer retention and broadening business with existing customers. In other words, securing loyalty.

If you accept this premise, it brings the role of salespeople into sharp focus. What are they adding? My experience is that many move into account management roles and often become quasi-order takers. Does this represent real value, or can these tasks be implemented in another way?

Here’s another epiphany: excellent operations management is the route to driving sustainable and profitable sales growth in wholesale.

There is absolutely no point in investing in sales resources if the service sitting behind the promises is anything but excellent. A new customer may try you once, but if the experience is disappointing, they will not come back.

Why speed of service gives wholesalers an advantage

This is expertly articulated in a seminal article in the Harvard Business Review series titled ‘Staple Yourself to an Order’. It examines customer satisfaction from an operations management perspective, which is particularly pertinent to wholesale today as the industry moves more towards deliveries and electronic ordering.

Every time an order is handled, a customer is handled. When managers take time to track each step of the order management cycle (OMC), they come into contact with critical people like customer service reps and production schedulers.

I would broaden this to include telesales, websites, apps, delivery notes, invoices, stock-outs, pickers and drivers.Each is a critical customer touchpoint and highly influential in the trust-building process. Managers who track each step of the OMC work their way through the company from the customer’s angle, rather than their own.

A simple business model will prime wholesalers for success

Focusing on the OMC offers managers the greatest opportunity to improve overall operations and create competitive advantages. Another insight is that not all orders are created equal. Some are simply better for the business than others.

The best orders come from long-term customers who fit the company’s capabilities and represent healthy profits. Too often, new sales ‘opportunities’ are not commercially viable for the business.

I am a committed proponent of the importance of selling and negotiation, but, if asked to choose between those or operations in wholesale, I would seek absolution for my sins and select operations. The importance of operational excellence cannot be overstated.

David Gilroy is the founder and managing director of Store Excel

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David Gilroy is the founder and managing director of Store Excel. He was previously the convenience retail lead at W2 Commercial and held operations director roles at Bestway Wholesale and Nurdin & Peacock.


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