Knowledge is king

Customer relationship management systems empower retailers by providing an instant snapshot of their entire customer demographic. But, as Samantha Docherty asks, what makes one system better than another?


Knowing what is happening in your business and having solid information as the key basis for your decision making process can make the difference between an average trading year and a fantastic one. Sophisticated customer relationship management (CRM) applications are just one way of ensuring the retrieval of this vital information.
Through CRM systems retailers can track and analyse shifting customer needs, link marketing campaigns to sales results, monitor sales activities for improved forecasting accuracy and manufacturing demand and help to identify any weaknesses in the retailer's customer base.
One of these applications is Future Business Systems main software package, Harmony. A totally integrated package with accounting, manufacturing, importing, distribution, POS and stock control it is customised to retailers needs. Its CRM system allows retailers to capture information on its customers including name, address, contact details, items purchased and what brought the customer into the store.
Future Business Systems' managing director Mark Silver feels CRM is definitely a major part of a customer's decision process when purchasing a system.
"The retailers can set up award programs, run customer reports or send mail-outs to a certain target market with the information taken through Harmony. Customers can be moved into discount categories, for example bronze, silver and gold and once they've reached a spending target a gift voucher can be emailed to the customer or they may receive a SMS informing them that $50 credit has been added to their VIP card."
But not all retailers want to travel down the digital highway. When it comes to virtual or tangible it all depends on the demographic of the retailer's customer.
"We have people [retailers] selling to older customers who want a physical gift voucher to send out, where as a younger customer can be sent an email."
For casual fashion and lifestyle retailer Blue Illusion, its CRM system targets gaps or opportunities in the market with just one question.
"Blue Illusion has a system where a customer is asked one question every time they make a purchase. In this case 70 per cent of its customers are members of the brands lifestyle club so most of the time they already have the customer's details. In asking one question such as what is their favourite fashion magazine, customers are willing to answer it without much fuss; but these answers give the company an indication as to what magazine they should be advertising in."
Meeting the needs of clients such as Blue Illusion, Collette Dinnigan, Charlie Brown, Pierucci and Tarocash, Future Business Systems' CRM continues to grow on a daily basis. Priced anywhere from $60,000 to $250,000, having a synchronised business system doesn't come cheap but Silver says the price all depends on software and hardware requirements and the size of the business.
"Our customers want everything integrated; 90 per cent of our customers are operating CRM systems integrated with POS."
Last year Tarocash found it more cost effective to implement a new system rather than upgrading its existing legacy applications. Embarking on a detailed six month analysis of the systems on offer, various tenders were sent out by the company, which finally chose Harmony.
Satisfied with Harmony's wholesale application Tarocash's financial controller Les Kraus found its retail system was not exactly what the menswear company required.
"We worked with Future Business Systems to design the retail side of its package to our specifications. It took 12 months to develop but the roll out to 55 stores nationwide took only five days."
Dealing with implementing the application since March last year, Kraus says Tarocash has yet to take full advantage of its customer profiling system.
"It's our next step. At the moment we have in-house surveys that customers fill out in-store, then our staff enter the details into the system which head office has access to instantly. As it's a statistics-based survey it doesn't allow for detailed answers to get a rounded profile of our customers. Our next step is to build into the loyalty program that is incorporated into Harmony allowing us to build up a more conscious data base."
For Dick Spencer, owner of men's and women's corporate clothing retailer Baubridge & Kay, customer data is most important.
"We're a small top-end business so with repeat business we like to have the details of our customers, which we're now able to capture very easily at point of sale. Our customers don't mind getting an email advising them of a sale of an interesting product or a new item. They can also order on the website using the details they have provided in their profile, an order can be altered and customised to their specifications and then sent to them. It certainly provides us with a vehicle to make it a very, very efficient business."
Ross Dembecki, lead project manager for Microsoft Australia, says more and more of the company's customers are using the customer management module within the Microsoft retail management system as it's designed for smaller retailers.
"The idea is to use technology to allow small retailers to offer high service to differentiate themselves from larger companies. It gives a smaller business the technology to improve its customer shopping experience and bottom line.
"An example of this was when Baubridge & Kay saw an immediate spike in traffic through its stores in the first three days directly after emailing a promotional campaign to the brands frequent shoppers."
Specialising in the fashion market, Apparel 21 provide a retail and wholesale system to larger retail companies such as the Apparel Group and Maggie T.
Apparel 21 managing director John Hill says in terms of market surveys CRM systems make it easier to accumulate data on what people are spending and where they live.
"This information can assist in indicting where an opportunity may be for a larger company to open a new store in an untapped area."
Futura managing director Brett Ashcroft argues the art of a good system is how it sorts thousands of entries in a data base into a series of tight groups.
"Data held by a retailer can be significantly more than just names and addresses. When the data mining tool sends messages it can do so catering a tight message to that specific customer, differentiating each one. Some customers may buy at the beginning of the season while others shop at the end. Basically these systems can not only store customer details to offer loyalty points but specifically target parts of your data base."
With a tyCalibre's managing director, Gary Zecevic, has always been a strong believer in using information technology as a fundamental tool to assist in managing the business. When selecting a system for Calibre, his primary objectives were to find an integrated retailing/merchandising system that covered all aspects of the business including POS, CRM, merchandise planning, OTB, inventory/stock control and reporting.
Since implementing Futura into the business, it has allowed Calibre's staff to access information at the touch of a button that previously would have taken hours to manually extract and sort.
Amanda Glew, IT manager at menswear chain Calibre, said the system ensures Calibre is fulfilling its customer's needs.
"Customer profiling can be used in many ways. On a basic level, knowing sizing, colour and style preferences allows you to ensure it's fulfilling a need. In terms of marketing it allows you to use this information to ensure a successful season. An example of this may be, if Calibre released a jacket last season that now has a matching pant. We can easily identify and make contact with all those who purchased the jacket. In some systems this involves going through pages and pages of data - where as with Futura we are able to enter our parameters - ie style number and the date range of purchase, and it will find all customers within those parameters. This can be applied to any aspect of the range."
Applying Calibre's customer database to other areas, the menswear company had its most successful sale period ever last winter due to its SMS campaign.
"Calibre generally uses SMS broadcasting as a marketing tool. We have worked with Messagemedia (SMS broadcast specialists), who have always provided new and interesting ideas for message broadcasts. We find the SMS campaign creates an immediate response allowing us to connect with our customers quickly. It also has the added bonus of being a great deal cheaper than doing a classic paper mail-out. The possibilities for growing the effectiveness of our campaigns are endless with the use of CRM."

For Calibre knowing its customer is a priority.
Tarocash is yet to take full advantage of its CRM system.