In mail order, data is king. Which customer bought which products, from which catalogue, how much they spent, how frequently they buy - every morsel of imformation feeds better targeting, higher revenues and higher profit margins.
For Kingstown, one of the fastest rising stars of mail order, the ability to gain full value from the data generated by its marketing campaigns was a critical factor in its growth plans. Established in 2000 by a management team with long experience of mail order, the company achieved rapid growth with catalogues such as Healthy Living Direct, Inspired Choices, Foot Friendly, Housewares Direct and Garden Ability.
In the early stages, outsourcing the order processing, storage and distibution elements of the business avoided the need for substantial investment in premises and staff. However, the arrangement made it difficult to gather timely and relevant information about specific campaigns.
Once the business plan allowed, the decision was taken to move the ordering and fulfilment operation in-house, bringing with it much greater access to customer information. The Kingstown team set about finding a system that would deliver campaign information in the time, the format and the detail they required.
"We found that the time and costs involved in building a solution from scratch were greater than we felt were worthwhile," says Managing Director David Varley. "At the same time, we didn't want the limitations of a proprietary solution. After reviewing the various systems we were pleased to appoint Trilogy as our IT providers because they had relevant experience in mail order systems and, even more so, had proved themselves to be flexible and creative partners."
Campaign capability
The central challenge for Trilogy was the campaign-driven nature of Kingstown's business. Each catalogue mailing produces peaks of activity that place heavy demands on the system and the call centre agents using it.
Trilogy Senior Manager Bruce Leigh explains that the capacity of the system had a direct impact on the profitability of each campaign. "Staff is always one of the highest cost centres in any organisation and the number of people employed in the Kingstown call centre at any given time obviously affects the profit margin.
"In developing the system, we were aware that its ability to help the team process orders quickly would mean that fewer people would be required to handle a greater number of calls. At its peak the system now handles around 5,000 orders a day, with no more than 25 people needed to process them all and take customer enquiries."
"This was where our relationship with Trilogy became a crucial factor," recalls David Varley. "Since we were bringing these resources in-house for the first time, there were inevitably changes to our requirements as the project progressed. The Trilogy team proved themselves to be flexible and proactive - and patient! - in helping us to find solutions at every stage."
Open for business
As well as ordering and fulfillment, the Trilogy system provides warehouse management and stock control functions. Kingstown now has nearly quarter of a million square feet of warehousing in three seperate buildings, all managed by the Trilogy infrastructure.
"The system is based on open, industry standard architecture, giving Kingstown great flexibility and scalability," says Bruce Leigh. "It is built on Microsoft(R) SQL Server and runs in the Microsoft Windows(R) environment, avoiding the kind of narrow relationship with a propriety vendor that can cause problems further down the line."
This open structure also enables interfaces with the systems of the courier companies, streamlining the delivery processes and allowing for real-time tracking of items from the warehouse to the customers doorstep.
Multiple benefits
As well as the benefits of lower costs of sale and greater control of logistics, the Trilogy system has enabled Kingstown to offer improved customer service and to develop better targeted marketing campaigns, based on a deeper understanding of customer preferences. Trilogy Sales Executive Peter Russell explains that Kingstown now has the capability to recognise individual customers, rather than holding muliple records for the same person.
"Now, the system records each transaction against a single customer record, still keeping brand identity, giving Kingstown a much clearer understanding of how individual customers buy from them and what their tastes and preferences are. This enables Kingstown to develop more effective cross-selling campaigns, driven by proven buying behaviour, which improves response and return on investment for each campaign." This capability also streamlines the process of capturing new customer data, clearly identifying those customers who buy for the first time.
"Our system gives us much clearer and timely picture of patterns of purchase and response," says David Varley. "This kind of detailed information is the key to mail order success and it is paying growing dividends with every campaign."