It’s often more cost-effective to keep a customer than to gain one – but this can be hard for businesses to do without having a cohesive and productive team.
Businesses can often be held back by silos that are created due to communication barriers and gaps in processes that cloud visibility. For distribution businesses, it can be difficult for the admin, finances, sales, marketing, distribution, warehousing, and logistics teams to communicate and integrate their processes.
In this blog, we’ll shed more light on how silos negatively affect your business, what red flags should you look out for, and how can you break them down using four of our own proven methods.
How silos can cripple your business
Because it’s common for many organisations to be broken up into different departments or teams that don’t have much contact with each other, silos are typical for many businesses.
But silos carry many negative consequences for businesses, including:
Lack of efficiency
Without proper business processes and communication, it becomes much harder for employees to process transactions, fulfil orders, and close deals – especially when multi-team involvement is required to get the order from request to delivery. The business is slowed down as customers aren’t kept up to date with their order status, and the sales team fails to communicate monthly orders or special requests to the fulfilment and warehousing teams.
Deteriorated customer relationships
When customer-facing teams like admin and sales don’t communicate about customer interactions, the rest of the business isn’t able to fulfil orders well. There could also lead to failed marketing spending when customers are being sold to at the wrong moments.
These inefficiencies result in a breakdown of the business’s relationship with customers, and the modern customer will simply leave if their needs aren’t met.
Loss of revenue
The lack of shared information means that the business can’t maintain relationships with its customers, leading to leaking prospects and opportunities, and unfulfilled orders – and if the silos are big enough, there’s no real-time awareness of these gaps.
Without being able to keep customers, businesses face a loss in revenue that can be hard to recover from.
So now that we know how silos can affect your business, what can you do to identify the causes and find a solution?
5 red flags to look out for
The Internet and COVID have fundamentally changed our relationship with our customers and how we do business. Unfortunately, this has put further strain on businesses to improve their processes – but some may not even know that they’re ‘siloed’.
So what are the five warning signs of silos?
- Staff don’t have clear processes to follow – if your people don’t follow or have processes to deal with customers and their orders, it’s easy for mistakes to start happening.
- Customer complaints rise – your customer emails can start to follow trends due to miscommunications between your teams: “You’ve lost my order, you sent me the wrong thing, the quote didn’t match the sale, I received extra items I didn’t order.”
- People can’t step away from the business – your directors and management start to feel that they can’t take a break or go on holiday because the business won’t run without significant issues.
- Customers start leaking constantly – if your customers or prospects are regularly leaking from every stage of the funnel, this is a clear sign that there are gaps in your processes as you moves customers along the sales journey.
- Staff morale becomes low – low staff morale due to inefficiencies and customer complaints all point to a break somewhere in the process.
4 methods to break down silos and prevent them from happening
While it’s going to take longer than a week or month to get rid of silos, once you implement change it will be very hard for silos to form again. Our own team has spent years improving our processes and communication, and we’ll share our proven methods below.
These are our 4 proven methods of breaking down silos:
- Become process-driven
Because leakages occur due to gaps, you’ll need to create new processes that are strictly adhered to in order to fix them. You should have a way of recording each interaction and transaction with a customer and ensure that these records are made available to each team member to give back visibility.
Our Director Rob likes to say, “If it’s not recorded, it didn’t happen.” Having this process means that our team members are aware of every new development and can catch potential leaks and mistakes before they occur.
- Move away from emails and record everything
Emails can become a black hole where customer interactions are easily lost or never followed up on. Your people should instead record customer interactions, requests, opportunities, and orders within a business-wide system. Even better if that system has alerts in place to notify you of missed or late deadlines.
- Communicate (even if you don’t think it’s necessary)
There are often many people involved in each transaction, and most of them are probably not on the same page. For distribution businesses, it’s common to be talking to project managers, finance teams, and CEOs at various points – but not all of them will have been briefed on new orders or budget changes.
So while it may seem like “too much” of a task to record various responsibilities and points of contact, this is what will ensure that your customers are looked after properly, nothing gets lost, and there are no surprises when the bill is sent.
An ERP can help your business do all of the above, because it connects your entire business together, tracks your customer relationships, facilitates clear processes between teams, and gives you visibility over all your processes.
Some of the ERP features that our team finds the most useful are:
- Ecosystem integrations – we utilise plugins that automatically track external interactions (like phone calls, emails, and texts) and then store them in the ERP so that every conversation can be accessed by our team.
- CRM – a CRM helps our team stay up to date with every customer by recording and tracking each client’s history and interactions with us. Using the CRM also encourages a process for every team member to follow.
- Workflow automation – workflows automate and customise our customer journeys, and are one of the easiest ways to create and drive different business processes.
What can you achieve when you break down silos?
Processes and systems to facilitate customer relationships and transactions help reduce the number of silos in your business. And when your business reduces silos, it can be clear just how much more it can achieve:
Gain visibility and control over your business
An ERP will give you full visibility and control over your business. With an ERP, implementing new processes, workflows, and customer relationship management will facilitate better connection and communications between teams.
Identify and solve problems quicker
With clear processes, fewer silos, and no communication barriers, it becomes much easier to identify gaps and plug them. Your business’s efficiency is then improved as your people aren’t putting out fires constantly.
Achieve measurable customer outcomes
Positive customer outcomes increase thanks to improved efficiency and productivity. Customers are moved along the customer journey smoothly, transactions are processed quickly, and orders are fulfilled successfully.
Is it time to give your team a boost in productivity?
Running a business is tricky and oftentimes hard – but we know there are ways to improve and make it easier for you and your people.
Implementing an ERP customised to your business can increase cohesion and productivity within your team, allowing your business to improve your customer outcomes.
Our expert team has worked with businesses for thirty years to help them do this, and we’re able to work with you to provide expert solutions to ensure that your business can succeed from the start.