With SKU counts on the rise and customer service needs increasing, harnessing the power of computer technology is becoming vitally important for pro dealers both large and small, and many companies are now taking advantage of databases and related software programs to better integrate their business models, track customers' activities, and proactively market products and services.
Consider the nation's largest pro dealer, Raleigh, N.C.–based Stock Building Supply, which had sales of $2.7 billion in 2003. Earlier this year, the company completed a migration of 26 legacy systems it inherited through nearly as many acquisitions to a single enterprise resource planning (ERP) system from NxTrend Technology in Colorado Springs, Colo. A Progress Software Corp. relational database serves as the repository for the ERP system, housing customer data that is now centralized and capable of being queried in ways that weren't possible previously, notes Mike Brooks, vice president of information systems and technology at Stock.
With all customer data in that single database, Stock can organize and analyze data according to the various customer segments it serves, including framers, builders, repair and remodel contractors, light commercial, and so on. “Now we have 240 locations on one system, one iteration of the database, one customer file, one item file and, at any given time, about 3,000 users,” Brooks says. Data can be sorted according to revenue and profitability by customer segment, and to analyze which customers are buying which products. “We can tie our budgeting process to that, as well as different promotional programs. We really have a lot of ways to look at the data that we never had before,” Brooks says.
The system also allows for granular tracking of sales to individual customers, including when a customer purchases specific SKUs for a particular job, the price, the time materials left a Stock Building Supply location, and the truck those materials were on. Additionally, Stock recently launched a new add-on module to the ERP system, a customer portal—or private Web site—to let customers review their account status, request invoice copies, and more. It was enhanced last month and customers can now download this data into their QuickBooks accounting software. “We're trying to make smaller businesses better by providing information back to them,” Brooks says.
As another example, Cox Hardware and Lumber, a Houston-based dealer with 29 locations, is using a Microsoft Access database to enhance its knowledge and understanding about its customers in order to serve them better and to anticipate their requirements. While the company's existing POS system captured purchasing information, the data wasn't housed in a central location where it could be queried for business analysis purposes. “Our goal was [the ability to generate] a single-page report that could give a synopsis of where the account is in terms of our relationship and revenues and what we thought we could accomplish that year,” says owner Virgil Cox.
Once that functionality was in place, Cox Hardware also began using the system to develop lists of suggested sales calls for salespeople to make using the same types of information. “We can start with intelligent suggestions, such as ‘This is the list of people we haven't talked to in six months,'” Cox says. And it's even better than an expensive customer relationship management (CRM) package, he adds. “CRM is big and expensive, whereas this is small and cheap,” he says. The database project cost about $5,000 and paid for itself within two months.” —Tom Smith is an Amherst, N.Y.–based freelance writer.