How a top Independent electrical/industrial distributor doubled its salesforce without hiring a single new salesperson
Background:
The “Big Resignation,” as they say it, impacted not only the technology and service industries but several small to medium independent small businesses, if anything, much harder than is generally known. How do you survive back-to-back challenges, i.e., first the pandemic and then the steady stream of talent migration? As a distributor working with thin margins, keeping the lights on simultaneously and competing in a volatile labor market becomes impossible.
The problem:
A key reason B2B business is different from B2C is its value-added services, including being a subject matter expert and hand-holding the customers’ requirements from research to fulfillment. The sales team plays a crucial role in building this trust with the customers and providing them confidence in the product’s pricing and availability. But when the sales teams are churning through with mass migrations and retirements, and because these are highly skilled resources who “understand” the customer, replacing them is a significant challenge. Onboarding a new salesperson, training them, and bringing them up to speed can take anywhere between 18-24 months! This interruption adds to the considerable disruption exacerbated by the supply chain challenges.
The solution:
Most business automation solutions, including advanced RPA bots, loosely mimic repetitive human tasks, but when customers exchange conversations in an email or text, there is hardly anything repetitive.
Revalgo’s proprietary AI engine, with its neural and graph network and machine learning capabilities, can replicate the salesperson’s intent when converting a customer’s request and apply various business rules, including profitability and product availability. As with any AI solution, training the models with the right intent and providing feedback to the machine learning models is highly crucial, and for that reason, we worked closely with a small group of sales/order processing team as a pilot to verify and validate the accuracy of the conversion. With a baseline of at least 60% accuracy with no part numbers (6 lines out of 10 to be accurately predicted) and 100% accuracy with anything resembling a part number (including incorrect part numbers), we launched the pilot to train the models.
Within 6 weeks of the pilot, the accuracy for conversion where the customers gave no part numbers shot up to over 80% accuracy. When the customers provided a part number, the accuracy was maintained at around 99.9%. This automation saved each salesperson over 5 hours daily and allowed them to be order managers rather than just order takers. In addition, the distributor responded to almost all the RFQs requested by the customers, whereas in the past, only a small fraction of RFQs were responded to. This increase in RFQ response automatically qualified them to increase their chances by over 30%. With the additional time on hand, the sales team was not only able to cross-sell and up-sell to the existing customers but was also able to expand their customers through new geographies and new product lines, resulting in increased commissions and revenue generation. The pilot group saw an average increase of over 20% in revenue through existing and new customers.
The management saw the most significant benefit when two sales team members from the Pilot group were removed. The impact was almost negligible in converting orders, providing an additional sense of security to insulate from the transitional workforce problem. This was an eye-opener and the most impactful driver in expanding the pilot, in addition to the cost savings and increased revenues.
The Pilot is currently being expanded to over 60 sales team members, with additional data being ingested by Revalgo’s AI engine and will be completed by the end of Q3, thereby giving the distributor the capacity of 2X the current sales team, all without adding any additional staff, or expenses incurred in onboarding and training. The sales team is thrilled by the prospect as their value towards the business has increased exponentially, and their customers are delighted with the additional attention they have received from the distributor. In an atmosphere with supply chain challenges, having this confidence from the customers was the best outcome any distributor would have expected. In other words, Revalgo was able to create a digital twin to the distributor’s physical business while continuing to keep the current customer’s methods of interaction, increasing the value of their employees and adding an additional 30% to the top line. This is considered a true Omni channel experience, i.e., a digital outcome regardless of how the customers interact. Welcome to the world of tomorrow’s commerce, i.e., conversational commerce.