"DST Asks: Do You Get Everything You Need from Your Current Computer System? - aftermarketNews

“DST Asks: Do You Get Everything You Need from Your Current Computer System?

We’re going to go out on limb and make the assumption that the goal of your business is to make a profit by acquiring customers, selling and servicing them, and retaining them for generating future revenue. If this is not the goal of your business, there’s no need to read further in this week’s column - although if that’s the case, we would love to hear what actually is the goal of your business.

DST Asks: Do You Get Everything You Need from Your Current Computer System?

The database engine is the foundation of a computerized business system, used to abstract very specific sorts of information about your business and organize it in a way that will prove useful. The database should ultimately be viewed as a representation or model of the business.

MISSION VIEJO, Calif. — We’re going to go out on limb and make the assumption that the goal of your business is to make a profit by acquiring customers, selling and servicing them, and retaining them for generating future revenue. If this is not the goal of your business, there’s no need to read further in this week’s column – although if that’s the case, we would love to hear what actually is the goal of your business.

The truth is that most companies do a poor job of managing customers and growing sales, which has a dramatic impact on achieving business goals. Customer Relationship Management, commonly referred to as CRM, is the key to getting a handle on that challenge.

CRM is utilized, both very well and very poorly, in every industry. Perhaps the best example of CRM being used effectively is in the dental care industry. Our grandparents’ generation usually only went for a dental visit when something in their mouth hurt. Dentists earned a very good living spending the majority of their time extracting or repairing poorly maintained teeth. But then societal and educational changes occurred that created a need for dentists to transform themselves from repairers to maintainers if they wanted to remain profitable. Fluoridated water, improved toothpastes and brushes, dental hygiene education and programs for children, better diets and other factors resulted in current generations having healthy, well-maintained teeth for a lifetime. It’s not unusual now for a child to never even have a cavity.

So dentists had to recreate themselves and the perception of themselves by consumers to remain profitable. Today, regular checkups and maintenance are the highly profitable revenue lifeblood of the dental industry. Once your dentist has you as a patient, he uses CRM to retain your business. The last thing you receive at each appointment is a card that pre-schedules your next visit. When the date of that visit is approaching, you get a telephone reminder from your dentist of the appointment. He probably sends you and members of your family birthday cards and holiday greetings. He wants to be considered a member of your family. Your dentist has figuratively put his arms around you and removed you from the market. He wants to own your business.

The reason your business needs CRM is the same as your dentist’s…to own the business of your customers. Without CRM, you don’t know how much prospective business you have, which current or past customers you will lose, how many you are regularly providing attention or what the rest of your organization is doing that will affect your success or failure.

For years, aftermarket companies distributing parts and providing service relied mostly on inside and outside salespeople to maintain good relationships with customers. They kept their own customer records, followed up on new opportunities and grew the account base and customer service reputation of your firm. But in an era of cutthroat competition, decreased customer loyalty, high employee turnover, the need for multiple locations, sophisticated buying groups, overwhelming numbers of choices, discounted pricing, high delivery time expectations and other challenges, relying on old fashioned methods of achieving business goals gets many companies in more trouble than they can handle.

A well implemented CRM solution will provide your business with a powerful management tool and provide you with the information needed to target and transform obstacles to achieving your business goals. CRM technology will provide affirmative answers to questions such as:

* Does everyone who communicates with any given customer know what their coworkers said to them or did for them?

* Is all customer information kept in one centralized area or program for easy customer service reference?

* Do you know how many prospecting telephone calls your sales reps make each day and what the sales cycles and close ratios are?

* Do you have several databases of information that you need to access to benefit sales?

* Are you able to manage the top 20 percent of accounts that give you 80 percent or your revenue?

* Do you know how many customer service issues each customer has had and why?

* Do you know which customers consume most of your time?

* Do you know the revenue per sales representative?

* Do you know the numbers of existing customer contacts and repeat business orders?

* Do you know the average order size and order frequency?

* Can you rate your marketing or lead generation program effectiveness?

* Do you have profitability comparisons for individual products?

* Do you have profitability comparisons for orders from different channels?

* Can you do mail merge or e-mail broadcasts to your customer base?

* Do individuals in your organization have critical customer data that could be lost or taken? CRM and the technology to employ it should be a business priority because it can have such a profound affect on your business. It greatly affects employee satisfaction and turnover, the ability to target and close sales, the management of customer interactions and profitability, and your firm’s ability to grow. More than a software system, CRM is a cultural change and companies should invest time and effort into the new culture. How would you estimate what your ROI on CRM could be? The best way to accomplish that is to ask some questions about the cost of NOT implementing CRM:

* How many existing accounts did your company lose in the past 12 months and what were their annual revenues?

* How many new sales opportunities did you lose in the past 12 months and what were they worth?

* How much non-sales activity are your salespeople doing (writing reports, processing paperwork, implementing their own marketing programs, dealing with customer service issues and getting trained)?

* What is the estimated dollar amount of missed sales opportunities because of timing or lack of follow-up?

* What are other departments doing to support sales? How many calls a day are fielded by people in inventory management, finance or administrative departments to answer questions for sales reps and what is the cost of all that time?

* How much time is spent processing or adjusting orders, due to inaccurate or incomplete information?

* What is the cost of servicing your most difficult customers?

CRM is much like a Total Quality Management effort, where business opportunities and defects are quantified and prioritized and reworking is initiated. The better you can measure and track problems and mistakes, the better you can improve the process and your customer’s experience with your firm. This is what CRM technology does for sales and marketing efforts. It helps track employee actions and gives managers a 360-degree view of their operation to see the results of sales, marketing and customer service efforts. Once this data is collected, CRM provides your firm powerful new capabilities for enhancing customer satisfaction, growth and profitability.

Send us an email at: [email protected] or give us a shout at 1.800.700.4DST.


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MISSION VIEJO, CA — Diapers and beer. Do those two high-volume grocery products seem like an unlikely combination? Most would think so. So did a large supermarket chain until the advanced relational database engine of their computerized business management system allowed them to do some data mining regarding buying habits.

It’s no secret that the widespread use of preferred customer cards, debit cards and credit cards provides retailers with an abundance of demographic information about their customers with a simple swipe of a magnetic strip encoded with data. The grocery chain discovered that although shoppers typically did their weekly shopping on Saturdays (no surprise there), when men stopped in during the week on Thursdays to pick up just a few items, if they bought diapers they also tended to buy beer. It’s the “This is for the baby, this is for me” mentality.

The retailer was able to conclude that they purchased the beer to have it available for the upcoming weekend, probably for watching the big game. The chain could use this newly discovered information in various ways to increase revenue and profitability. For example, they moved the beer display closer to the diaper display, making it impossible to get to one without seeing the other. And, they made sure beer and diapers were sold at full price on Thursdays — no reason to discount the price of an item that customers are willing to pay full price for.

Generally, data mining is the process of analyzing data from different perspectives and summarizing it into useful information — information that can be used to increase revenue, cuts costs or both. Data mining software is one of a number of analytical tools for analyzing data. It allows users to analyze data from many different dimensions or angles, categorize it and summarize the relationships identified.

Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases. This is a process that is generally used by managers, in a “point and click” environment. The results of data mining replace what we think is true with concrete evidence of relationships and patterns. Continuous innovations in computer processing power, disk storage and statistical software are dramatically increasing the accuracy of analysis while driving down the cost.

The database engine is the foundation of a computerized business system, used to abstract very specific sorts of information about your business and organize it in a way that will prove useful. The database should ultimately be viewed as a representation or model of the business.

Data are any facts, numbers or text that can be processed by a computer. Today, organizations are accumulating vast and growing amounts of data in different formats and different databases. This includes operational or transactional data such as sales, costs, inventory, payroll, and accounting; as well as non-operational data, such as industry sales, forecast data and macro economic data.

Your decision making ability hinges on the ability of your computerized business system to store, retrieve and model the data that it collects about your business. The ability of your business to think fast, react quickly and anticipate change can be severely handicapped by an outdated database engine. All of the respondents to last week’s question answered “No” to “Do you get everything you need from your current computer system?”

Many systems currently in use by aftermarket distributors are based on old “flat file” technology. A flat file is by no stretch of the imagination a database. Rather, a flat file is in its simplest form nothing more than a single, large table (e.g., a spreadsheet). It contains only one record structure; there are no links between separate records. Access to data is done in a sequential manner; random access is not supported. It operates analogously to a filing cabinet that is organized by, say, customer name.

While it is easy to find information about a single customer, it is cumbersome at best to, for example, find all customers whose sales have declined by more than a certain percentage. Access times are slow because the entire file must be scanned to locate the desired data and in many cases it is simply impractical to find and select the information needed to make needed decisions. To extend the forgoing analogy, consider the difficulty of scanning a 500-page customer sales report that is organized by customer name or number to find those customers whose sales are dropping off. Other problems associated with flat files include data redundancy, data maintenance, and data integrity, and still most importantly, the near impossibility to add or change data to meet changing requirements for the software.

One of the most important factors in choosing a business computer system is its ability to grow and change with changing marketplace demands. Database technology empowers your software supplier to grow and change your software to meet changing requirements, providing a strong foundation for current and future needs.

A relational database, where the data resides in tables (picture a series of rows and columns containing a mailing list, for example) provides flexibility that allows changes to the database structure to be easily accommodated. The structure of the database can be changed without having to change any applications that were based on that structure. For instance, you can add a new field for e-mail address in the mailing list table. If you are using a non-relational database, you probably have to modify the application that will access this information by including “pointers” to the new data. With a relational database, the information is immediately accessible because it is automatically related to the other data by virtue of its position in the table. All that is required to access the new e-mail field is to add it to a “select” list.

The structural flexibility of a relational database allows combinations of data to be retrieved that were never anticipated at the time the database was initially designed. In contrast, the file structure in older flat file models is “hard-coded” into the application; if you add new fields to a file, any application that accesses the files will have to be updated.

An object-oriented database contains Binary Large OBjects (BLOBs), which are complex data types such as images, spreadsheets, documents, CAD, e-mail messages and directory structures. Under the general concept of an object-oriented database, everything is treated as an object that can be manipulated. Objects inherit characteristics of their class and have a set of behaviors (methods) and properties that can be manipulated.

An object-oriented relational database is a hybrid of the two, combining the speed, flexibility, and data mining sophistication of both. The processing abilities are state-of-the-art. In comparing this architecture to flat file design, one could use the example that in terms of speed and efficiency, a flat file user as the driver of an automobile, upon arriving at home would have to disassemble his vehicle before parking it in the garage for the night and reassemble it the next morning before going to work. That’s how impractical and inefficient flat file design is for your business.

With everything moving at warp speed, including you — whether you like it or not — if you don’t have the tools at hand to make decisions fast, any fast action you undertake is likely to be out of haste instead of speed and therefore prone to error. You need to anticipate the future, spot trends before others, challenge assumptions and create a competitive environment where the best ideas win.

Imagine how many more races you’d win if you had a big head start by having easily accessible data at hand to make those decisions. Consider the power of being able to think about things quickly and accurately, tackling in minutes the same big issues and questions that the competition would be processing for weeks, or more likely, not at all.

From this crash course in database engine design, we hope you’ve learned two things:

1) An object-oriented relational database engine will empower your business.
2) Don’t buy your beer on Thursdays.

We’d love to hear your thoughts on the topics we post, suggestions for additional questions and anything you’d like to share. Send us an email at: [email protected] .


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“DST Asks” is written and sponsored by DST Inc. The opinions expressed in “DST Asks” articles appearing on aftermarketNews.com do not necessarily reflect the opinions of AMN or Babcox Publications.

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