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Putting Customers at the Center

How three midsize businesses are growing by putting the customer first

by Molly Rose Teuke, May 2008
More and more forward-thinking companies are using information technology (IT) to gain insight into their most critical asset: customers. Successful customer-centric firms understand that they must go beyond simply enhancing customer service. They must make customers the center of the business.

 

Montreal-based Madacy Entertainment, a leading independent budget and midpriced music label, understands that they must make their customers' success and profitability as important as their own. The organization depends on Oracle Sales Analyzer, Oracle Discover, Oracle Portal, and other analytical tools that are part of Oracle E-Business Suite to create turnkey solutions that drive overall category profitability for its retailers. Madacy depends on its IT technology to enable it to track critical market intelligence, including inventory turnover, consumer sales, and customer cash flow.

Revolution Health Group, a leading Web-based health company, believes that its future success depends on the quality of direct contact with its end user. When the company launched RevolutionHealth.com, a site offering comprehensive health and medical information at no cost, it also introduced Oracle CRM On Demand (formerly Siebel CRM On Demand). The new system supports external customers—people seeking healthcare information—along with internal customers—a customer service team, a marketing team, and two sales teams. The system was deployed on a very aggressive time frame going live in approximately 60 days.

Axium Entertainment, a Los Angeles, California-based provider of payroll services and financial technology for the entertainment industry, implemented Oracle's PeopleSoft customer relationship management (CRM) in 2006 to improve transparency and consistency. The new system had a critical impact on the IT department's biggest customers, the sales staff. Communication has improved among client services, sales staff, and payroll operations, thanks to PeopleSoft CRM. It has enhanced the handling of sales strategies and unified them into a single consolidated process.

As information technology deepens the pool of information available to managers, forward-thinking companies are streamlining operations and business processes, developing new products and services, and even creating new business models to differentiate themselves in the marketplace.

But the most savvy companies are moving beyond electronic scorecards, dashboards, and other tools that slice and dice performance numbers. They're using technology to gain insight into their most important asset—their customers. It's not just about improving customer service; it's about making customers the center of the business. For companies that are catching on, the rewards of customer centricity are immense.

 

Reaching Customers Where They Shop

At Montreal-based Madacy Entertainment, a leading independent budget and midpriced music label, customer centricity means making its customers' success and profitability as important as its own. With new entertainment distribution channels emerging almost daily, Madacy's customers—Target, Wal-Mart, and Best Buy among them—face unprecedented challenges in keeping music sales strong. Madacy's ability to help them succeed is central to retaining its Nielsen SoundScan ranking as the No. 1 independently distributed label in North America for the past 11 years.

 

"Delivery mechanisms are changing in the global category for entertainment, and we have to look at how our consumer intelligence—from both the physical and the digital market via iTunes and other online activities—enables us to bring the optimal product mix and highest ROI [return on investment] per square foot for our retail customers," says Gary Fodi, Madacy's executive vice president and CFO. "We're the No. 1 value product supplier to every mass merchant retailer in North America, but you can't compete just on price. To differentiate, we have to offer something more by continually adding value. Let's say tracks are being downloaded. How do we participate in that space? How do we use intelligence from bricks and mortar to drive digital sales and vice versa? How does that market intelligence create value for all of our customers in the convergence from the physical to the digital world of the future?"

In other words, how can Madacy, which specializes in lifestyle-based marketing concepts and collections, improvise a new tune for the benefit of its customers? Using Oracle Sales Analyzer, Oracle Discoverer, Oracle Portal, and other analytical tools available through Oracle E-Business Suite, the company created a turnkey solution to drive overall category profitability for its retailers. Technology is the enabler, says Fodi, because it allows Madacy to track such critical market intelligence as individual store traits, inventory turnover, supply chain costs, consumer sales, profit margins, and customer cash flow.

Central to Madacy's growth strategy is securing permanent space with additional mass merchandise retailers, as well as developing products geared to nontraditional entertainment retailers. The goal is to create premium products branded for nontraditional venues. Building on its recent success with Bath & Body Works and Victoria's Secret, Madacy plans to gain permanent retail space in these and other nontraditional venues such as Home Depot and Kohl's department stores. "The turnkey solution we developed for the mass merchandiser value category is a portable model that can be applied to any retail channel and is a key growth driver for us in the nontraditional marketplace," says Fodi.

The choice of technology partner for its customer relationship management (CRM) function was critical, according to Fodi. Madacy needed a flexible, scalable solution that would enable it to monitor granular data taken from a multitude of sources to support strategic and tactical decisions for the company. "Oracle understood our vision," he notes. "Having it as a partner allows us to continually demonstrate to the marketplace the world-class capabilities that set us well above our competition." In its own way, Oracle's approach to customer centricity has allowed Madacy to evolve from being product- and category-centric to being customer-centric. "We were always a smart company," says Fodi. "Now, thanks to Oracle, we're an 'intelligent' company."

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