The Top 4 Distribution CRM software Systems

CRM Software for Wholesale Distributors

Highlights

  • Salesforce, Microsoft Dynamics, SAP and Oracle NetSuite are the top 4 distribution CRM software systems as measured by market share, market growth and industry specific capabilities.
  • These four applications go beyond generic processes to deliver industry specific capabilities such as inventory visibility throughout the supply chain, mobile order processing, complex pricing, promotions, negotiated trade agreements, and supplier rebates with bill backs, chargebacks and SPAs. Each of these systems has different strengths, weaknesses and value propositions, discussed below.
Johnny Grow Revenue Growth Consulting

Customer Relationship Management software for distributors aids industry imperatives such as higher sales conversions, increased customer share, improved demand forecasting, more frequent inventory turns and better performing supply chains. Most importantly is improves cost containment, margins and profits.

In the prior post I shared the top industry specific capabilities offered by the best CRM distribution software providers. This post will deliver comparison information among the top four systems for this industry.

Distribution CRM Software

Industry Fit is Essential

Cross-industry Customer Relationship Management systems focus on the generic customer facing processes. They require separate ERP or supply chain systems to deliver visibility to pricing, trade agreements and inventory availability, movement and fulfillment. But that doesn't work when every customer interaction deals with pricing and inventory.

The best wholesale and distribution CRM software apps support cross functional business processes that morph with ERP and supply chain systems to create a seamless all-in-one solution. They simplify technology by eliminating disparate application boundaries that give staff the information they need irrespective of where the data is located.

I've been comparing and implementing CRM software for whole distributors for more than two decades. The number one question I get is, What is the best CRM software for distribution?

The easy answer is to say, well, that depends. So, I'll spare you from the easy answer. Instead, I will suggest to answer the question you start by considering market share, market growth and the industry specific requirements that make CRM software for distributors different than generic applications.

CRM Market Share in the Wholesale Distribution Industry

I'll start with market share. The Big 4 applications across all industries are Salesforce, SAP, Oracle CX and Microsoft Dynamics 365.

CRM Market Share

The Big 4 are also the leaders in this industry. Not because distributors have the same requirements; they don't. But because these vendors deliver essential industry capabilities. That includes things like simple and efficient order processing, pricing rules and optimization to improve margins, orchestrated order fulfillment to keep customers satisfied, and supply chain visibility to improve inventory utilization.

The Top 4 CRM Software for Wholesale Distributors

Selecting the best distribution CRM software is a long-term decision that should be based on the many criteria that support your staff, customers and company priorities. Consider the following comparison points only as a starting point.

1

Salesforce

Salesforce is the market share leader – overall and in this industry. The company pioneered cloud delivery, integrated social technology, advanced sustainable supply chain solutions and is a top innovator.

That innovation has delivered advanced supply chain capabilities, digital commerce, Einstein AI, a broad platform and a deep AppExchange ecosystem.

Salesforce strengths include:

  • Salesforce is an innovator and disrupter. Companies that seek to innovate and disrupt their markets can learn from Salesforce and benefit from its applications.
  • The user interface was one of the first to be built on consumer technologies and deliver a simple and rewarding user experience. This has achieved a profound effect in user adoption.
  • The combination of its Lightning platform, Apex development language, Platform as a Service (PaaS) tools and AppExchange ecosystem provide significant application extensibility.
  • Commerce Cloud and omni-channel commerce experiences that provide customers online, on demand procurement and customer self-service capabilities are quite strong. That's essential as 41 percent of wholesalers now call e-commerce their top sales channel, an increase from 31 percent from the prior year (Source: Digital Commerce 360 report).

Salesforce is the only top CRM distribution software solution that does not offer an integrated Enterprise Resource Planning (ERP) application. However, the company does offer packaged integration to ERP systems.

I've implemented Salesforce for many distribution and CPG companies, and to be fair, it does not accommodate every industry requirement. Advanced capabilities such as flexible pricing (trade agreements, SPAs, supplier rebates) and inventory visibility throughout the supply can be achieved, but require some customization.

This solution offers a broad platform, flexible tools, packaged integration with other systems, and a deep AppExchange ecosystem that brings together the components needed to satisfy a very high majority of industry requirements.

Consider Salesforce if you seek digital or business transform. That may include shifting your value proposition with new value-added services, expanding channels or market boundaries, or elevating the customer experience.

However, acquiring the market share leader may come with a price premium. If you leverage this application for digital or business transformation your investment will pay dividends. But if your goals are less ambitious or your growth path is more incremental or you do not leverage Salesforce's advanced capabilities, you may increase your investment without corresponding payback.

2

SAP

SAP is the ERP software market share leader for the enterprise market. However, SAP CRM does not possess the same credibility as the company’s flagship S/4 HANA ERP solution. Nonetheless, the customer management application does contribute to the biggest SAP strength. That advantage is a single, enterprise-wide solution that also includes ERP, SCM and Human Capital Management (HCM) to support cross functional business processes.

Because of the company's strength in ERP, and integration with other apps, distributors have a complete solution that responds to their biggest challenges. Things like forecast and demand planning, inventory turns, logistics efficiencies, warehouse management, transportation management and agile supply chains.

At a more tactical level, SAP strengths include:

  • Demand planning with demand-side forecast collaboration that includes sales pipelines an external partner forecasts in the planning process.
  • Sales order processing, with flexible quoting, shipping integration, EDI and complete order to cash visibility. Sellers can monitor sales order fulfillment and be alerted to predicted late deliveries.
  • A global solution with multi-currency management, 28 languages and 44 country specific localizations.
  • Visibility of inbound and outbound shipments, inventory quantities and item location (down to the bin). Visibility can be enhanced with advanced technologies such as GPS, Internet mapping and IoT.
  • Customer rebates, incentive programs and automated chargeback management are extremely effective to help sellers squeeze more profit from tight margins.
  • SAP Commerce Cloud delivers impressive ecommerce and omnichannel capabilities for both B2B and B2C industries. This is particularly important as more than one-third of distributor customers complete at least half of their purchases online; a trend that will continue to rise.
  • The best sales and operations planning (S&OP) application.
  • The information reporting with SAP Crystal Reports and analytics powered by SAP HANA are extremely flexible and include important industry KPIs.

SAP is best suited for large, global companies with complex requirements. Consider SAP CRM if you are evaluating SAP ERP software, you are an existing SAP customer, or you want an enterprise-wide fully integrated business application suite.

3

Microsoft Dynamics 365 Customer Engagement

The distribution industry is Microsoft Dynamics second largest install base, behind only manufacturing.

The Microsoft value proposition is similar to SAP, in that the Customer Relationship Management application is part of a holistic, enterprise-wide solution. The Microsoft solution also includes ERP, SCM, HCM, eCommerce and analytics.

However, there are two big differences when compared to SAP. First, Microsoft's software, called Dynamics Customer Engagement (CE), is a very strong application even without the rest of the application suite. Microsoft CE is sold far more often as a standalone solution and without the company's ERP software. And second, where SAP dominates the largest companies, Microsoft is the ERP market share leader among midmarket companies.

Focusing on just the CE software for wholesale distributors, benefits of this solution include the following:

  • Native integration with Outlook. And it's more than just syncing contacts and email. Microsoft replicates the Dynamics CE application within Outlook so that sellers and executives can perform their customer facing activities without leaving Outlook. I've implemented Dynamics CE for a long time, and this is often the most appreciated benefit by users.
  • The Dynamics CE software is a cloud native, browser-based application that permits very flexible configuration. Most competing applications also permit configurations, but once made you are unlikely or unable to change. Microsoft's tools and constructs are more flexible and show that becoming standardized does not mean becoming inflexible.
  • This system can manage the full supply chain process and achieve the ultimate goal of getting the right products to the right places at the right times and at the lowest cost.
  • Dynamics CE has a powerful guided selling tool to facilitate structured sales processes. It's a visual process flow that suggests repeatable processes and distribution best practices at each sales stage or step in the sales cycle. It's effective at increasing sales win rates.
  • Microsoft is ahead of most competitors in business process automation capabilities. The application offers multiple workflow types (i.e., synchronous or asynchronous workflows, Dialogues, Actions and Business Process Flows) and the Power Automate platform to make workflow automation even more extensible.
  • For distributors with value added services that include field service, Microsoft's Cortana and HoloLens technologies can satisfy some unique use cases. I've used the HoloLens virtual reality technology to accelerate finding inventory in a warehouse, and also used drone technology to count every item every night in the warehouse.
  • Microsoft's Power Platform tools are low code or no code graphical tools that permit software customization by non-programmers. They also help prevent over-customizing the application. That means a higher fit application with less maintenance and much easier upgrades. The Power Platform includes Power BI, which has become the top user generated, agile data analytics tool.
  • The company is a leader in AI for distribution companies.
  • Dynamics CE is a global application that delivers localized functionality in about 40 regions with 42 languages. It covers all the "multi's", such as multiple company, multiple currency, multiple languages, multiple time zones and multiple-inventory locations.
  • This application is the least expensive cloud solution among the Big 4.
  • CRM market share growth shows Microsoft gunning for the number 2 position. Although Salesforce continues to extend its lead, Microsoft has challenged Oracle and SAP for the runner up spot. Salesforce is the leader, and Microsoft is the primary challenger.

Microsoft Dynamics Customer Engagement is well suited for midsize companies or divisions within large organizations. Consider Dynamics CE if you are a Microsoft technology shop, a small or midsize company looking for least cost software or seeking cross-functional and enterprise-wide information systems.

4

Oracle and Oracle Netsuite

Oracle offers an enterprise application designed for large, complex, global deployments. It's an impressive cloud application that has risen from the acquisitions of JD Edwards and PeopleSoft and evolved from the Oracle E-Business Suite. However, where we see the biggest software growth in this industry is from Oracle NetSuite.

NetSuite is the younger brother acquired by Oracle. Strengths for this application include:

  • Sales order processing. A cross platform mobility solution can take sale orders online, via EDI or in the field. It can then automatically push them through to the back-office systems. That streamlines the sales order and fulfillment process. Sales order processing can also include trade agreements, SPAs and customer specific pricing. That's important because if your application doesn't bring real-time visibility to inventory pricing, trade agreements and fulfillment it's not going to work well.
  • Real-time inventory visibility. Knowing inventory quantities in any location, and what's available to sell are key for sellers. NetSuite delivers deep visibility to inventory quantities and related transactions, such as accounts, sales orders, invoices and deliveries.
  • Enterprise-wide application suite. This system can support enterprise-wide holistic processing with a single vendor, fully integrated business application. That suite includes ERP, SCM, HCM and business intelligence (BI). A vendor-managed integration that automates enterprise-wide transaction processes is a big deal to many companies who want to avoid complex and costly system integration.

Like SAP, the NetSuite CRM software does not carry the same credibility as the ERP software. And while the NetSuite ecosystem cannot compete with Salesforce AppExchange or Microsoft Dynamics AppSource, the company has a network of partners that offer tailored solutions for micro-verticals.

Oracle NetSuite is well suited for midmarket companies or decentralized operations that roll up to an Oracle ERP solution. Consider Oracle NetSuite if you are looking for a holistic business application suite to deliver cross departmental processes, and CRM software is a relatively small component in the decision-making process.