5 Ways Your Order Management Process Can Make or Break Your Relationship with the Customers

An order management process of any company that deals with manufacturing or retail is relatively similar and includes roughly the following steps:

  • order planning;
  • order generation;
  • cost estimation and pricing;
  • receiving and registering the order;
  • prioritizing;
  • setting the work schedules of the equipment and the staff members that will be preparing the order;
  • order fulfillment;
  • billing;
  • processing potential returns and claims;
  • post-sales services.

The major difference from a customer’s perspective, however, lies in the field of how the above steps are carried out. That difference makes the customer decide to commit to a long-lasting partnership with your company or run and never look back.

Let’s look at some common issues in handling order management that can strongly influence your customer’s experience.

Most companies are organized in a way where order processing goes through several departments, which often sets the scene for coordination issues between them. Even more importantly, in all the inter-department communications, the customer and their interests often get lost. That can happen during multiple stages of the process.

1. Right from the start

The problems can start before the customer even appears on the scene. The marketing department is supposed to forecast the demand so that the production department can arrange for the right inventory and staff.

However, the marketing department knows from experience that there is a high probability that the actual demand is going to be different from their forecast. They also don’t really count on eager cooperation from the production team in situations where the demand turns out to be higher than predicted, so they deliberately inflate the numbers “just to be safe”.

In turn, production teams are also well aware of this strategy, so they lower the numbers provided when planning inventory and staff. In all this hassle, the actual purpose of the exercise to ensure a great experience for the customers and have accurate calculations that help avoid ending up with extra inventory and work hours - is pretty much lost.

One way to solve this would be by establishing closer cooperation between marketing and production departments from the early stages of order planning. If both departments can work together on estimating the demand and planning inventory and worker’s headcount, this will create an opportunity for them to double-check each other and come up with more accurate numbers as a result.

2. As the order is being generated

The sales department generates the order. This is the way things go in a company, and no other department gets to play any proper role in this task usually.

What happens in this set-up though, is the salesperson arranges the sale based on the order size alone. Which is justifiable since that’s pretty much the only data he has.

Now, what if the production department provided him with a list of products that are in excess? The salesperson could focus more on these and maybe even come up with some discount offer on them. If he also knew which products were sitting in your storage already, he would have an opportunity to get more orders on those by offering fast delivery.

The bottom line is both you and your customers would undoubtedly benefit if other departments in your company provided more information to the sales team.

3. Establishing order priority

Often, order selection and prioritization are delegated to junior staff within the marketing or sales department.

However, it is important the people selecting the orders must be aware and in sync with the company’sstrategic plans of the company as a whole, which is only possible if they are in constant direct contact with the top management. The choice of which orders a company selects or rejects indicates its strategic imperatives. If the staff member responsible for this process does not have a clear vision of those, his decisions will most likely not benefit the company’s long-term goals.

Prioritization of orders would also normally reflect the importance of certain customers for the company and the availability of the products required to fulfill their order. This task would be performed with the most efficiency if marketing, production, and strategy departments were involved. That way, the global company strategy in customer relations and partnership building can always be taken into account.

This is also important to remember when the order is being scheduled for production. Marketing teams would often have a list of orders they would want to be processed urgently, which would mean the production department would have to deviate from its original plan.

The production teams on their side are more concerned with utilizing the company’s assets efficiently and managing related costs than partner relations, so they will often insist on sticking to their plan to meet their goals.

If both teams get a say in scheduling and prioritizing during order processing, they can more easily find an arrangement that works from both standpoints. The production department will have to be more understanding of the necessity to expedite certain customers’ orders and of the need to change production plans occasionally in the larger interests of the company. At the same time, the marketing team should avoid abusing that option. That way, you can strengthen customer loyalty without inflicting extra production costs.

4. Handling deliveries and returns

When the communication between the departments involved in order management is on point, the shipping works like clockwork and deliveries happen on time and with the accurate inventory.

However, if one of those points had a hick-up, companies must have straightforward procedures in place for customers to return the products and get accurately reimbursed.

For that to happen the retailers need to agree to take back the product, shipping providers need to get the product back to the company or another designated destination, and the finance department has to issue a refund promptly.

5. Planning on building customer relations in unexpected places

For example, some companies need to assemble their product’s components of their product on the customer’s premises after shipping. Other post-sales services may include installing the assembled product, maintenance, repair, customer training, etc.

These would typically be the tasks for the shipping, service or customer training departments. However, their work can benefit your company so much more, if it is performed while in contact with the salesperson who knows the requirements of the customer and with the company departments that can use their feedback for future projects.

The service department staff can often stay in a customer’s office for a long time, which gives them a great opportunity to solidify that strong relationship you have with that customer.

In addition, their prolonged interaction allows them to develop a unique perspective of customer requirements, which is why it is so critical for your company to get feedback from them through debriefing.

To sum it up, it is crucial for companies to clearly identify the stages of their order management process, determine the roles of different teams at each stage and promote cooperation. That way, each department can draw attention to its main focus, making sure that the company’s costs and procedures stay on track while the customer’s experience remains a priority.

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Evgeny Grigul
Co-founder Virto Commerce