27 November 2000
‘Suppliers cut staff, don’t invest’
FARM suppliers are slashing sales staff and making too little investment in systems to manage the customer relationship, a leading consultant has warned.
Staff cuts from 1996-1999 were more than twice the total of the previous five years, claims a recent survey by The Andersons Centre and UKASTA.
But only 26% of the businesses surveyed said they had invested in customer-relationship software as a means of replacing the staff they had let go.
David Neill, partner and head of The Andersons Centre, said the primary business objective in the short- and medium term of many firms was to reduce operating costs.
But, at the same time they were claiming that their plan was to increase market share in existing geographic and product areas.
It was a business strategy that made little rational sense, he said. “Good housekeeping alone will not ensure a successful future.
“Customer relationships and margins will continue to worsen as investment declines,” he predicted.
With 32% of companies admitting they were considering further staff reductions, it was time for businesses to radically re-think their future, he said.
“Firms cannot maintain customer relations without investing something to replace the staff,” he concluded.