Digitizing business key to understanding customer behavior

MANILA, Philippines - Even if statistics point out that 55 percent of service-oriented businesses fail after four years, Caloy Ang of Suds Laundry and Dry Cleaning believes that the right computer software can help a newbie business owner lick those odds.

At the helm of the laundry franchise business with over 20 stores in Metro Manila and growing, Ang observes that poor record keeping and lack of planning are often cited as among the major causes of failure by a 2013 US study by Entrepreneur Weekly cited by www.statistic brain.com.

But if a small business owner is able to track his performance on a daily basis against established benchmarks, he will have enough time to respond and launch corrective programs, he says. The new entrepreneur would also be able to see which of these programs work and which don’t. “With the help of a customer relationship management system (CRM), you can tell early on if a business is growing or stagnating,” according to Ang who has assisted 14 franchisees establish and grow their own laundry stores carrying the Suds brand in the past four years.

With an average of seven out of 10 customers returning to Suds outlets week after week to have their clothes cleaned, the laundry service franchise has been recognized as an enterprise built for the long term and suited for first-time entrepreneurs.  Now catering to a customer base of around 80,000, co-founders Caloy and wife Charmaine Ang are set to grow the Suds brand nationwide.

An integral part of the service they offer franchisee is the CRM, which actually does more than just manage customer relations. Every transaction is recorded on the system that was custom-built for the Suds laundry operation. It not only monitors the whereabouts of customer clothes as they are being processed, it can also track the amount of supplies used, a key step to profitability. In addition, the paper trail recorded by the system serves as a deterrent to pilferage, which in the laundry business takes the form of undeclared laundry services.

Ang nevertheless states that the systems and programs that come with the Suds franchise work best with a hands-on entrepreneur.  The systems are just there to make his job easier but not to replace his leadership in running efficient operations and reaching out to the market of “time-challenged” young families through marketing programs. Suds, nevertheless, assigns an officer to coach the franchisee onsite up to a month after opening.

Because Suds provides extensive manuals that spell out operations, the officer’s efforts are most likely to focus on how to get customers into the store. Flyers as well as balloons with free coupons are given out in the neighborhood. To catch the attention of passing motorists and pedestrians alike, new Suds’ stores use bubbles created by a machine. After all, bubbles evoke good memories and fun. “People smile at bubbles. They’re playful but not intrusive,” Ang says.

Once they have tried out Suds laundry or dry cleaning service, customers are enticed to keep coming back so they can get discounts through the Suds loyalty program. When they have brought in a total of 50 or so kilos of laundry to the shop, they are entitled to lower rates. Again, it is the customer relations management program that tracks their visits to the store.

“The CRM program is your key to understanding customers. The program quantifies what business owners may instinctively know about their operations,” Ang points out. Numbers, after all, don’t lie.