Wholesale's Hidden Costs: The Cost of Data Entry

Mike Carr
November 17, 2014

In our first “Wholesale’s Hidden Costs” post, we talked about the opportunity costs of complicated payment terms--the time, effort, and money sunk into learning, explaining, and enforcing complex discount programs. In this second post of the series, we’re going to talk about data entry and why it’s time for a new game plan for sales order management. Data entry. Has a more tedious task ever been conceived? It’s the kind of work that few enjoy, but that many have had to endure for one reason or another. If you’re running a wholesale business, you may currently have your sales reps and/or customer service teams spending hours each week entering hand-written sales orders to keep your business running. Let’s think about that for a minute. What could you be doing with all that time? Here are a couple possibilities:

Proactively Reaching Out to Customers

Removing data entry from your customer service team’s plate can enable them to be proactive with customers, rather than reactively putting out fires. The more positive energy of this approach will not only make your customers happier, but also your team. With the time gained, your customer service reps can can make additional efforts to increase customer satisfaction, which is no small thing. According to a study conducted by KISSMetrics, just a 5% increase in customer retention can increase profits by an incredible 25-95%. Furthermore, gaining a reputation for exceptional customer service will help you attract new customers in the long run. Imagine you’re a retailer, and you get a call from a customer service rep saying, “we noticed the shipment you ordered last week arrived today. Does everything look all right, or do you need to order anything else?” You’d probably trust that vendor more, and be inclined to order from them again. Something else to keep in mind: this should be taking place year round, but making proactive customer service a priority around the busy holiday season in particular can really make or break your business.

Understanding Your Customer’s Needs

With more time on their hands, customer service reps can gain a deeper understanding of their customers by spending more time with them on the phone or in person. In addition to becoming more familiar with a customer’s order history, your team can (and should be instructed to) spend time asking for and analyzing sell-through data from your retailers. Your team can then compare this data against other retailers or your factory purchase orders as a whole. You want to ask the question, “is this retailer buying our best-selling styles, and are they having the same level of success that we’re seeing with our other accounts?” This will provide insights about the people who shop at your customers’ stores and what they’re looking for. It might also raise questions about how knowledgeable the staff is about your product or how your products are being displayed.

The Actual Costs of Data Entry

Not only are the aforementioned opportunity costs clearly a big issue, there are also significant actual costs that could be cutting into your profits right now. If you employ people who spend a couple hours each day transcribing sales orders, here’s an example ROI calculation:

The Cost of Data Entry

Employee's Annual Salary $40,000 Weeks Worked/Year 49 Hours Worked/Day 8 Hours/Day Spent On Data Entry 2 % Time Spent On Data Entry 25% $ Spent on Data Entry Per Employee        $10,000   That’s $10,000 per employee on data entry alone. And it gets worse--data entry errors are a constant annoyance, eating up even more time and resources. It’s hard to tell which is more horrifying--the actual cost of time spent on data entry or the opportunity costs of what your customer service team could be doing instead. It’s about time to eradicate those costs entirely. We live in a world with self-driving cars and smartwatches. Isn’t it about time this process was easier?

So What’s the Alternative to Data Entry?

Over the last decade, dramatic changes in technology have created a wholesale world in which systems are employed in the management of different aspects of a business. It seems that the revolution started in warehousing, as inventory tracking is the crux of any wholesale business. As systems became more dynamic, they moved upstream to things like processing accounting. As we’ve entered the mobile age, more and more front line selling teams have made data entry a thing of the past. They now have access to platforms they can use to capture orders and automatically sync with their back office systems, and the time saved has given them more opportunities to do what’s really important--connect with customers. Do you have any data entry horror stories or other data entry alternatives you’d like to share? Let us know your thoughts in the comments!