Pellerin Milnor Corp. manufactures industrial laundry machinery used by hotels, prisons, nursing homes and dry cleaners. Instead of selling its equipment to its end users, it created a dealer network throughout the world. The manufacturer, however, generates the sales leads.
The marketing department places ads in magazines and has an informative Web site designed to attract prospects. Leads pour in, often through the post office. Using the old system, it took three days to receive the mail. Then a data base administrator would type the lead into the company's mainframe system. A secretary would generate a letter informing the appropriate dealer of the sales lead. Of course, she would have to retype the information into a word processor. These letters went out by snail mail. So did the quarterly reports.
If there were any sales updates, the data base administrator would have to add the results to the database. But there weren't many updates. Stephanie Holling, marketing coordinator for the Kenner, Louisiana manufacturer, says the response to leads in the old lead system was "sometimes a joke."
Holling estimates the leads reached the distributors in three weeks time under the best of circumstances. Now, the leads reach them instantaneously.
In January, 2000, Pellerin Milnor decided to outsource its lead tracking system to Cincom Systems Inc., a Cincinnati, Ohio-based ASP. Now, all leads are funneled to the ad department at the manufacturer. Then a staffer enters them on a standard form at Cincom's Web site. Cincom's lead tracking system automatically emails the dealer with the lead.
A Web-based Solution
The dealer is also able to log onto the Web site. Based on the password used, the tracking system will only display the leads assigned to the appropriate person. Currently, Cincom is working on formatting the leads as Microsoft Office contacts so they can be imported directly into each dealer's contact management program.
The lead management program saves time, which Holling hopes will translate into more sales, since dealers will be able to contact prospects when their interest is high. But it also saves real dollars because the postage costs have disappeared.
Holling says Pellerin Milnor had no plans to outsource originally. The company was operating on an old mainframe computer that they learned could not become Y2K compliant. The manufacturer purchased another mainframe only to discover its lead generation system could not operate as they wanted. The company felt its only solution was to purchase new software that could handle the leads.
In its search it discovered Cincom, which had developed a proprietary lead generation system. Its program is called CinApps, a pun on synapse, which is a biological term for the junction between a nerve neuron and a muscle. The program is designed to be a "business junction" which can forge business connections for its clients.
The Many Benefits Of An ASP
Because Cincom operates on the ASP model, Holling says its prices were remarkably reasonable compared to some of the other bids it received.
As the company learned more about the ASP model, its executives realized it did not have the time, money or personnel to develop a lead generation model that could match Cincom's. "We didn't want to worry about servers and Internet Service Providers," says Holling.
Going the ASP route turned out to be a wise business solution for Pellerin Milnor. "We are a small firm with only 800 employees," says Holling. "We need to focus on manufacturing. We don't have a staff large enough to support a data base administration department that can support an internal effort," she adds.
Moreover, now everyone can easily access the lead generation system because it is Web-based. Before, only one person knew how to add names and prepare reports.
In addition, Holling doesn't have to worry about following the swift changes in technology. She doesn't even have to learn the argot. "Cincom has made it easy for me. If I want something, I tell them in layman's terms what I want," she says. This frees her up to focus on the manufacturer's marketing effort, her real job.
So far, the manufacturer has been satisfied with the relationship. Holling personally has found the ASP to be responsive to her needs. The programmers have been flexible for her. Holling says the relationship resembles a marriage where both partners work to help each other.
Lessons from the Outsourcing Primer:
- Selecting an ASP allows this manufacturer to concentrate on producing laundry machines and letting an automated system distribute sales leads to its dealer network via email.
- Using an ASP means the marketing department does not have to keep up with the latest technology. No one even has to learn the technical terms.
- The ASP's lead distribution system cut the communication time to its dealers by at least three weeks and eliminated the postage expense entirely.
- The manufacturer does not need to hire a data base administrator. The ASP handles this job for it.