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How a distributor persuaded more dealers to order online instead of calling

March 2, 2015 01:57 PM
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As a distributor of prepaid wireless phones to thousands of retail stores for the Sprint Prepaid Group of Sprint Corp., VHA Corp. two years ago addressed a problem: too many of its dealers were placing orders over the phone, and only 5% to 7% ordered online.

The overall prepaid wireless phone market was booming for products such as the Boost Mobile and Virgin Mobile phones VHA distributes. But VHA was behind the times with a rudimentary online ordering system that lacked user-friendly features and caused most customers to call in orders through its customer service center. The company couldn’t keep up with competitors that processed many of their customers’ orders faster and more efficiently via the web, says Steve Lin, sales director for VHA.

“We were about a year and a half behind our competition,” he says.

But after switching to a new e-commerce site a little more than a year ago on cloud-based SuiteCommerce software from NetSuite Inc., VHA quickly migrated more than half of its customers’ orders to the web. The new e-commerce site launched in December 2013, and by the following April some 54% of orders were received online through VHA’s new dealer portal, Lin says. Since then, the share of online orders runs as high as 64%. Moreover, the company recently increased its peak number of single-day shipped units by about 30%, to 17,000 from 13,000.

The new portal, in addition to processing more orders overall—many of VHA’s small-business clients can now place orders after hours when they’re less busy—is also freeing up VHA’s call center reps to spend more time reaching out to prospective customers as well as existing customers to build relationships and expand sales, Lin says. Before launching its new e-commerce portal, VHA relied on all of its 13 reps to take incoming orders. Now it uses only three for incoming orders, dedicating the other 10 to prospecting and focusing on customer relationships. One result is that, in the past year, VHA has increased its number of client dealer locations by more than 40%, to 2,000 from 1,400.

VHA’s new e-commerce portal replaces a basic site built on WordPress, which is available as free, open-source software that makes core software code available to developers for making modifications. When it began considering a site upgrade or replacement, VHA learned from customers why they weren’t placing more orders online. The reasons included a lack of several features that would make their jobs easier—for example, online credit memos that indicate during the purchasing process how much credit a customer has from returned merchandise, and the ability to view their account status, re-order products, and pay invoices.

VHA discovered that it would cost about $300,000 to upgrade its WordPress site, but even at that price the new site wouldn’t meet of its customers’ needs, Lin says. The company instead opted for the SuiteCommerce software, which features the credit memos and other features customers want. VHA was already familiar with NetSuite, which already provided software the distributor uses for accounting and customer relationship management. To deploy SuiteCommerce, it worked with Concentrus, a provider of business and technology services to the cellular phone industry.

VHA also provides its dealers with several online videos that explain how to use the new e-commerce portal, including how to set up users to place orders, how to place orders for particular stores and how to process merchandise returns. John Martinez, director of information systems at Concentrus, says that by processing more orders online, VHA can now also better compile information on which products sell best through particular dealers, letting the distributor more effectively allocate inventory to the dealers most likely to quickly sell it.

VHA declines to comment on the cost of deploying SuiteCommerce. NetSuite says its software starts at about $1,600 per month and is adjusted upward based on the type of installation and the number of users.

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