To Collect or Not

Am I crazy? I keep finding myself in the middle of debate about collecting name, phone#, and email address from customers. I have a strong opinion and I always seem to be on the opposite spectrum of the decision makers who are my clients. I’m getting much more comfortable with my role as a consultant and completely get the privacy debate. I’m not unsympathetic to the collection process at the point of sale in the distribution and retail business. I believe decision makers are missing the boat when they don’t seize opportunities to capture a means to touch their most valuable asset, customers.

In my world, it starts with sales order entry training using a software package that many electrical and plumbing distributors use, Epicor’s Eclipse. The generic cash sale function defaults to requiring name, address, phone number for customers who prefer to pay cash, check, credit card and don’t have an existing terms account. Counter salesman, inside salesman, outside salesman, managers, and owners always challenge the process when I recommend gathering this information.

Wholesale specialized distribution is an old business model and the majority are family owned generational models. Hopefully the good ones realize their 3% to 4% EBITDA models are suspect because organic growth is very limited and labor cost of retaining seasoned employees continues to rise. Let’s face it, the electrical and plumbing grid hasn’t changed much in 100 years so products have become commodities and profit margins are thin.

My grandfather’s toilet and electrical outlet looks and functions exactly like mine. Let’s think about the definition of organic growth. Selling the same products to different customers or selling new products to our existing customers. How can we sell a better toilet if we don’t know who are our customers? Just in case you need to market a better toilet, the internet says this is it........ sorry couldn't resist....



Kim Lachance Shandrow quotes some great information from Jeff Tanner, professor of marketing at Baylor University and director of the school’s “Business Collaboratory” in her entrepreneur.com blog. In a nut shell, this is what I continually hear from clients.

1. I don’t have time to get anything from my customers but their money. Do I really need to collect data from them, too?

Tanner says, “Without customers, you wouldn’t be in business. Knowing who they are and what they want, particularly from you, can lead to more effective marketing, increased brand loyalty and the holy grail -- more sales. Collecting customer data helps you know each customer more individually and treat them that way. The info you glean from them can empower you to craft offers that increase purchase rates at higher margins while also delivering better value to the customers because they’re getting things they want."

Personally, I surrendered to it. I like using Google maps because it fits my lifestyle. I’m always traveling in new and exciting locations and need precise instructions about traffic, commute time, and exact location of my destination. Like it or not, I know I’m surrendering my privacy to Google. When I’m hungry and don’t feel like sitting alone in the Texas Roadhouse next door, I enjoy carrying out my dinner and freely provide my cell phone number and email address for the convenience of ordering on line. Basically, the vendors above are providing something I want in exchange for my contact information.


When our customers prefer to buy electrical, plumbing, and hardware supplies from seasoned well compensated experts, is it too much to ask for a name, phone number, and email address?



2018

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