A sales backlog happens in a business when you are taking in more orders than you can fill due to time constraints, manpower limitations, and problems with warehousing and managing suppliers. Some may consider it good for business but amassing more orders than can be delivered can lead to a pile-up over time and consequent customer dissatisfaction.
The sales backlog ratio is calculated by dividing the number of orders in the backlog by the number of sales. To keep the backlog under control, it is essential to manage the sales force properly. Inventory and customer feedback should be taken into account as well. Field sales monitoring apps like SalesQ by CloudApper can help in this regard.
What Leads to a Sales Backlog?
A sales backlog can be the result of a plethora of factors, such as taking on more orders than available delivery capacity, poor sales force management, and suppliers missing key delivery dates. It is essential to routinely measure the backlog and do whatever is needed to ensure it is well-managed. This can be done through increasing warehousing capacity, increasing the sales force personnel, sales force performance enhancement or changing suppliers.
Why Manage the Sales Backlog?
Clearing the sales backlog early is beneficial for business, as it can help rake in more profits. Delaying orders might result in leads going cold and demonstrates that the sales force is poorly managed. Proper sales force management is essential to deliver orders fast and on time and to manage inventories and suppliers. Customer feedback can be analyzed to determine how much product should be stocked and how often deliveries should be made to keep a clear sales backlog.
Ways to Manage the Sales Backlog
It is possible to maintain a well-managed sales force by using the methods mentioned below:
Proper Sales Force Management
The sales force should be properly maintained by tracking activities, task completion, and monitoring the locations they visit to keep deliveries flowing. The targets that are assigned per rep should be monitored for proper completion. Field sales monitoring apps like SalesQ can help increase sales team accountability and productivity for faster backlog order dispatch.
The volume of orders per period should be monitored to help in adequate inventory management. Inventory stock should be based on anticipated orders so that the sales operations are smooth, and sales reps are able to deliver the desired orders to customers. This will mitigate the backlog getting out of control due to inadequacies in procurement and underutilization of the sales force.
Customer Feedback Analysis
Customers always voice their needs and wants and are very vocal on social media. However, it is best to capture their feedback through sales reps at the point of delivery, to analyze data as quickly as possible in order to customize products as per their demands. This will mitigate the hassle of stocking products that are in low demand and cannot be moved out of inventory in time, increasing the sales backlog. SalesQ lets you record customer feedback for prompt analysis.
Benefits of Keeping the Sales Backlog Under Control
More Loyal Customers
Customers who get their orders delivered on time become repeat customers. The additional purchases they make add to business profits and generate positive word of mouth. If customers are not frustrated by late deliveries due to a huge sales backlogs, they are less likely to switch. Proper sales management keeps the backlog in check and generates more profits for the business.
Less Warehousing Costs
Inventory procured without anticipating what products customers actually desire can result in the stock of goods getting stagnant. Anticipating what is currently a hot commodity in the market by tracking sales metrics like what products are moving fast will help gather relevant inventory. These inventories will move fast and reduce the hassle of storage and hence decrease operational costs like warehousing expenses. SalesQ lets you analyze products that are customer favorites to adjust your procurement activities.
Better Supplier Relationships
Supplier relationship management can make or break a business, as it is absolutely vital to secure suppliers who provide quality products at optimum prices. This helps generate large profits after product costs are shaved off. A large sales backlog can hurt suppliers if you have to make frequent returns due to products that are not moving. Consequently, a well-managed sales force can keep the sales backlog short and pull more products from suppliers. This can help the business receive bulk discounts.
Managing the sales backlog is essential for a business to succeed. This leads to satisfied customers, lower warehousing costs and good supplier relationships that increase the overall profits of the business. Field sales monitoring apps like SalesQ can better manage your sales force and help keep the sales backlog under control. Try it now, sign up for a 14-day free trial.