“We can’t accept phone or fax orders, sorry.”

Written October 14th, 2009 by
Categories: CEO's Blog
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It’s right there on Velo Orange’s home page.  They actually have the chutzpah to tell their customers that phone and fax orders are not accepted.  What?  Are they crazy?  Isn’t that poor customer service?  Aren’t they afraid that they’ll lose business?
Or are they “crazy like a fox”?

But first a preamble.

I’ve been obsessing over faxes lately.  I’m intrigued by how a technology that was invented back in 1843, and popularized in the late 1980’s, can maintain such an efficiency sucking stranglehold on the industrial supply chain.

No matter how hard we (and other firms) work to get rid of faxes, they continue to proliferate like kudzu.  Over the course of the next several weeks, I’ll blog about what I’m learning on the fax topic and discuss the value that b2b2dot0 brings…and will bring…to this party.

Back to the Velo Orange story.

There are only three ways to make your inbound faxes disappear:

  1. Mandate that your customers stop sending them to you
  2. Incentivize them to stop sending them
  3. Transform your customer’s faxes into something useful for you.

I found Velo Orange because I was looking for an example of a company that employed the first strategy.  If anyone has examples of companies incentivizing their clients to go to the web with discounts, please pass the urls along and I’ll publish them.  I’ll discuss the magic of the “transform” strategy in a future post as I discuss an innovative company called Esker.

Why would Velo Orange adopt this policy?  I think it was for one major reason:

  • Ultimately, they want to become as efficient as possible in order management so that they can pass on their process cost savings to their customers.

How could they dare do this?  I think they have three fundamental beliefs about their business:

  1. Velo Orange’s products are not commodities.  While customers might be able to buy them elsewhere, they buy from Velo Orange because of much more than price.  They are unique products, the company provides a lot of information about them, the products are of high quality and Velo Orange prides itself on great customer service.  They want to compete on total value…not just on price.
  2. Their customers value transparency.  Velo Orange’s website provides all of the information needed to do business with them.  Prices and inventory information are guaranteed to be accurate.  Shipping rules are baked into the shopping cart.  Product descriptions are informative.  There should be no reason to get in touch with them outside of the website in order to transact business.
  3. Supply chain efficiency gains should be shared.  There is a lot of waste in interacting with their customers over and over again on routine matters.  This adds cost to Velo’s operations which they’d have to pass on to their customers…which they would prefer not to do.  Besides, it just offends them to work inefficiently.  The intelligent thing to do is to have the website handle all of the routine matters (see my post on “Are You Hiring“), so that their employees are freed up to add more value to the business.  The cost savings are passed along in their product’s pricing.

Everyone wins.

Velo Orange holds down their operating costs and frees up their people to handle more creative and value adding activities.  Customers appreciate the simplicity, accuracy and timeliness of interacting with Velo’s ecommerce website and know that by doing so, they enable Velo to thrive, innovate and continue to work on their behalf.

I know what you’re thinking.  That’s great for Velo Orange, but that won’t work for us.  We’re in a competitive market and our customers aren’t in business to do us any favors.  We can’t mandate the way that our customers do business with us.  That’s probably true.  But I think we’ve learned a thing or two about the value that our SAP Integrated B2B ecommerce websites provide…especially to your customers who “insist” on faxing their orders to you.

In my next blog posting, I’ll share with you how to incentivize your customers to wean themselves off of phoning and faxing their orders in.

Sign up now so you won’t miss out 🙂

Sam