Learn how to make your customers happy!
Every business owner aspires to have a 100% customer satisfaction rating. After all, customer happiness means:
- Repeat purchases
- Referrals and positive reviews
The issue:
The problem is that most businesses are getting it wrong with inventory ordering. Customers either have to put up with poor stock levels or buy something else.
Without proper inventory ordering, it’s just a game of chance when it comes to satisfying your customers.
This guide uncovers how ordering the correct amount of inventory ensures you keep your customers happy and coming back for more.
What you’ll learn:
- Why Inventory Ordering Matters to Your Customers
- How Inventory Ordering Hurts Profits
- Inventory Ordering Secrets that Really Work
- The Technology Behind Proper Stock Ordering
Why Inventory Ordering Matters to Your Customers
Think about this…
Inventory ordering isn’t just about filling the shelves. It has a lot to do with the psychology of your customers.
When customers can’t find what they want, 62% of them will stop doing business with that particular brand. That’s not just a lost sale – that’s a lost customer for life.
Here’s another thought…
Your customer has mentally decided to buy. They’ve already committed to that product, and you brand before they’ve walked into your store. And then what happens? That product isn’t there.
The damage is done to that one transaction.
Stockouts spread like wildfire, via word of mouth and online reviews. One dissatisfied customer rants about their experience and you’ve just handed over a sale to your competitors.
But it doesn’t have to be this way…
Smart stock replenishment software makes it easy for businesses to optimize their inventory levels. It analyzes sales data to forecast demand, and automatically triggers reorders when stock is running low. This means you won’t suffer from expensive stockouts or the cash flow pain of overstocking.
The truth is that accurate inventory ordering can forecast demand with amazing precision. By analyzing historical data, seasonal trends, and other external factors, it can predict exactly what you need and when.
How Inventory Ordering Hurts Profits
Here are a couple of statistics that’ll surprise you…
Inventory distortion costs companies $1.6 trillion annually across the globe. Stockouts, overstock, and shrinkage are not just ruining profits on a vast scale, but are destroying businesses.
The real killer…
Inventory inaccuracy.
Retail businesses worldwide only have an average inventory accuracy of 66%. That means the inventory data is wrong one-third of the time.
Think about that…
If you are in business where you are wrong about your stock levels 34% of the time, no wonder customers are left frustrated!
The Hidden Costs Will Mount Up
The trouble with poor inventory ordering is that the problems spread throughout your business:
Lost sales result when customers can’t find what they want. They don’t wait around – they take their business to a competitor who has their stock management together.
Dissatisfied customers vent their frustration online. Negative reviews pile up, and your brand reputation takes a knock.
Emergency restocking costs a fortune in rush deliveries with premium charges. Your gross margins take a hit every time.
Staff time is wasted tracking down stock or pacifying irate customers.
The worst part about it is that every one of these problems is easily avoidable. Proper inventory ordering systems are the solution.
Inventory Ordering Secrets that Really Work
Are you ready to turn your inventory ordering issues around?
Here are some tried and tested methods that will change your inventory management and improve your customer satisfaction levels:
Accurate Demand Forecasting
No more guesswork about what your customers want. Accurate demand forecasting uses data to accurately predict future sales.
Businesses using the right forecasting tools have a 10-15% reduction in overall inventory levels. They free up cash flow, but have the products that the customers want.
So how do you get it right?
Take a look at past sales data. But don’t stop there. Add in seasonal fluctuations, market trends, and promotions. The best forecasting method is one that uses multiple data points for the most accurate predictions.
Safety Stock Strategy
Safety stock is that buffer inventory you keep to guard against stockouts.
The trick is most businesses go overboard and hold too much safety stock. That ties up cash that you could be using to grow. Or they underinvest in safety stock and constantly risk stockouts.
Calculate your safety stock based on the demand variability of the individual products. Items with erratic demand need higher safety stock levels.
The right amount of safety stock protects against shortages but doesn’t cost you unnecessary cash.
Automated Reorder Points
Manual reordering is just a big gamble with customer satisfaction.
Set up automatic reorder points that trigger when stock reaches preset levels. That way, you’ll never run out of those high-selling items, and won’t panic order unnecessarily.
Get those reorder points right, and you’ll find the golden balance between too high and tying up too much cash. Too low, and you’ll risk shortages when demand unexpectedly surges.
ABC Analysis for Prioritizing Inventory
Not all products are equal in terms of value and importance.
ABC analysis is that process of categorizing your inventory by their value to your business. ‘A’ items are your bestsellers that generate most of the revenue. ‘B’ items are moderate performers, and ‘C’ items are low-value products.
Focus your accuracy of inventory ordering on ‘A’ items first. They are the products that impact customer satisfaction and revenue most.
The Technology Behind Proper Stock Ordering
If you want to take inventory ordering to the next level, modern technology makes accurate inventory ordering easier than ever. But with so many options out there, choosing the right solution can be a challenge.
Real-Time Inventory Tracking
No more guesswork with real-time inventory tracking.
Businesses using automated inventory management systems report a 30% reduction in stockouts. That’s a big gain in customer satisfaction right there.
RFID technology and barcode scanning allow you to have real-time updates every time products move in or out of your store. You always know what you have in stock, and what needs reordering.
AI-Powered Demand Forecasting
Artificial intelligence is the future of demand forecasting.
AI can analyze thousands of data points that the human eye would miss. Weather patterns, social media trends, economic indicators. It uses all of these to generate demand predictions with spooky accuracy.
Demand for AI-powered inventory management is projected to grow 30% by 2026.
Integration with Sales Channels
The best modern inventory systems integrate with all of your sales channels.
Whether your customers buy online, instore, or from marketplaces, your inventory data remains in sync. This means you avoid overselling and have accurate product availability data.
78% of businesses report improved customer satisfaction after adopting an omnichannel strategy.
Tying It All Together
Ordering the correct amount of inventory changes how your customers perceive your business.
Customer trust grows when they know they can rely on you. This builds a long-term relationship, and repeat sales in the future.
Cash flow is better when you’re not tying up money in overstock or losing sales to stockouts. Improved cash flow means more money for growth.
Staff productivity skyrockets when your employees aren’t constantly firefighting inventory problems. They can focus on serving the customer rather than searching for lost stock.
Businesses that are winning today know the value of accurate inventory ordering. They know that every stockout is an opportunity lost. And every overstock dollar is pure wasted potential.
Don’t let your lack of inventory ordering bring your customer satisfaction levels down. The technology and tools to do it right are there. The question is: will you act before your competitors do?
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