Danka Turns to Database to Sustain Growth
The $3.3 billion company, which sells copiers and fax machines, decided to create comprehensive database marketing programs to maintain its growth rate of more than 20 percent for the last three years.
Danka began working on the situation two years ago, helped by Dun & Bradstreet. It expects to finish by year's end and to realize significant gains, but it still has to tackle some hefty problems.
"If you look at [Danka's] customer knowledge base, it's not a viable corporate asset," Stephen C. Horne, vice president of database consulting services at Dun & Bradstreet, said at last month's Direct Marketing to Business conference in New Orleans. "There is no central information resource that says who is my customer. They cannot tell you across all those different business divisions what those customer opportunities are, who should be focused where, where the upside opportunities are, where the downside opportunities are."
Danka and Dun & Bradstreet, Parsippany, NJ, are building a centralized data warehouse that is accessible to all its divisions.
"The warehouse drives the sales and product strategy, because all that information is driven through and captured in a central repository. This is what we call 'closing the loop,' " Horne said, adding that, previously, leads were not passed from the call center to the sales force because no such repository existed.
The team is building customer histories and adding other relevant information. As many copiers are leased rather than bought, a lease-expiration database was purchased so that the sales force can be notified when their customers' lease expires. The number of times customers call for repair services and the severity of their equipment problems also are tracked and fed to the sales force.
"People don't realize how important service information is for marketing organizations," Horne said. "Service failure is the number one indicator of customer flight."
As no centralized customer database existed, the 400 dealers, which had been rivals before the acquisition, often were competing for the same clients. To address the problem, Dun & Bradstreet clearly defined territorial boundaries, except when dealers had expertise in specific industries.
"If dealers were really good at the insurance industry, why don't we have that office possibly go after insurance rather than go after Des Moines," Horne said. "So there were changes in organizational structure based on the fact that there were vertical opportunities that existed within the sales organization that were being forced into geographical boundaries."
About 250 of 400 dealers used office management software, called OMD, but each used the program in different ways. Meanwhile, Danka was moving off OMD onto a system called Foresight, and it hit some major roadblocks.
Because the data didn't transfer smoothly from system to system, the postal service returned about 20 percent of the bills Danka had sent to its customers, up from 7.5 percent.
The problem caused about $11 million worth of float per month in unpaid invoices, but Danka is correcting the data and making progress in reducing the amount of bills returned.
Other widespread changes are still being made, but Danka already has seen improvement. Analysis of Danka's Omnifax division, which is devoted to fax machines, revealed that sales of its fax supplies increased by 58 percent after the implementation of a centralized database that was shared with the sales force.
Another test revealed that the amount of leads generated that met Danka's minimum qualification criteria increased by 40 percent and could represent about $500 million worth of incremental business.
"We anticipate some major, major gains by completing this process," Horne said.