Customer satisfaction is crucial for small and medium sized businesses. SMEs are constantly searching for new ways to improve customer service, guided by the knowledge that satisfied customers are typically a loyal, long term stream of revenue. Although innovation is important, getting the basics right is often overlooked in the battle for increased customer satisfaction. A customer that finds the ordering process difficult, that cannot get the stock they need or that frequently receives product behind schedule is likely to be unsatisfied and looking for a new supplier. Here are five ways that inventory management leads to greater customer satisfaction.
Inventory management involves a constant tension between carrying too much inventory and incurring hefty inventory carrying costs, and carrying too little inventory and thereby risking stock outs. One of the biggest reasons for keeping inventory beyond a bare minimum is to satisfy customer demand. If you are unable to fulfill customer orders due to a stock shortage, you risk compromising your image as a reliable supplier, and you also risk losing that customer. Over time, a systematic failure to manage inventory levels can lead to lower revenue and diminished market share. By tracking stock in real time, inventory management software can enable you to minimise stock shortages without needing to carry large reserves of safety stock.
Forecast Seasonal Demand
The most careful stock control is liable to fail from time to time; surges in demand occasionally leave businesses without enough stock. Failing to meet customer demand during peak season can compromise your business’ image as a caring and safe pair of hands. In some ways, running out of inventory during a demand spike is worse than regular understocking as customers may have few alternative options. There are many reasons for keeping inventory and meeting peak seasonal demand is essential!
Improve Order Fulfilment
Receiving the wrong items can be a stressful experience for both B2B and B2C customers, but particularly in the B2B context where your customer may depend on a particular piece of inventory to meet its own customer commitments. Inventory management software simplifies the fulfilment process; customer orders are effortlessly used to generate picking and packing notes, tracking labels and invoices. And on the rare occasion that something goes wrong, inventory management software makes it simple to find the source of the problem and notify other affected customers. Ensuring your business has a warehouse or storage area where everything essential to the picking and packing process is located in a convenient location will improve the speed at which your orders are fulfilled. Keeping the warehouse running as efficiently as possible is one of the many reasons for keeping inventory in the warehouse organised!
Reduce Lead Times
Lead time, or the time that it takes for you to fulfill a customer order, is a key factor affecting customer satisfaction. Customers are likely to prefer suppliers who can meet orders as soon as possible; low lead times mean that a supplier is better placed to respond quickly if the customer urgently requires additional or different inventory. Having product ready to go is one of the key reasons for keeping inventory in a warehouse; inventory management software challenges this thinking by making it possible to rapidly order inventory in response to customer orders, keeping lead times as low as possible.
Set Sustainable Pricing
Pricing affects more than your bottom line. Your customers value consistency as it allows them to better plan in the medium term rather than being forced to respond as conditions change. B2B customers in particular value stable pricing as it helps to keep their costs of production and margins fairly constant. When your business is in the growth stage, it can be tempting to set highly competitive prices to gain market share. Unfortunately, prices that are too competitive are unlikely to be sustainable – they may not reflect the true cost (including risk) of production. Unexpectedly changing your price point at a later date is unlikely to impress the customer base you have built up using artificially low pricing. Inventory management software makes it easy to see how your margin is broken down and to set fair pricing based on your true cost of goods sold.Topics: customer satisfaction, inventory management, small businesses, SMEs, stock control