Pro-Angler

www.proangler.com.au

Executive Summary

Pro-Angler Fishing Tackle Direct was established in 1993 as a mail order fishing equipment, clothing and accessory retailer. Based in Bentleigh, Victoria, Pro-Angler employs three full-time staff and 12 freelance distributors in Australia and New Zealand.

Pro-Angler's managing director, Gavin Hurley employed the web development skills of his Tasmanian distributor, Jack Barker to create a company website in 1999. One year later the website was updated by an external web developer, from a static brochure style website into a dynamic and interactive site which allows customers to purchase and pay for goods online, view industry information and information on training classes, new products, travel opportunities and display events.

The company incorporated Customer Relationship Management software with the online shopping capabilities of the website.  This enables Pro-Angler to maintain customer information relevant to future marketing opportunities and enhance product placement.  When new customers register their details on the website, the CRM software automatically updates the company database with this information. Using this information, the company sends out newsletters bi-monthly with the latest specials and new products to target groups.

Additional revenue generated by Pro-Angler's e-commerce initiative contributed a total of $50,000 to the company's gross profit in 2001. Coupled with the net cost savings, the net operating benefit of e-commerce was $52,844 for the year. The initial e-commerce investment totalled $19,965.

Future plans for Pro-Angler's e-commerce implementation involve a continuous development plan for the website to enhance its feel and appearance. Gavin is also keen to expand the business and is currently looking to form a business partnership in the near future.

The Business

Pro-Angler Fishing Tackle Direct have been in operation since 1993, selling equipment, clothing and accessories to anglers Australia wide via phone and mail order. Targeting the 30-50 year old demographic in the fly-fishing industry, Pro-Angler also offer courses on tying flies and casting in addition to product demonstration nights.

Based in Bentleigh, Victoria, Pro-Angler employs three full-time staff and 12 freelance distributors operating on a commission basis throughout Australia and New Zealand.

Getting Started

As the majority of the company's business was generated through mail and telephone order, the expansion to an online medium was a relatively smooth process. This reduces the burden of producing costly hard copy catalogues to be mailed Australia wide. With new products being introduced frequently the catalogues were often out of date before they were sent.

Gavin, Managing Director, and his Tasmanian distributor, Jack, initiated Pro-Angler's move into the world of e-commerce three years ago. Initially, Jack designed a static company website using his skills as a former full-time web developer. One year later the website was updated to a more dynamic and interactive version. Pro-Angler recruited the services of Launceston based software developers and e-commerce specialists for this task.

The website is marketed through mail-outs and magazine advertisements in addition to being linked by several other topically related sites. Currently the website averages 15 enquiries weekly.

As the website administrator, Jack is responsible for making weekly updates to wording, pictures and product listings.

Customer Relationship Management

Customer Relationship Management (CRM) refers to the integrated business processes and systems that manage and optimise the business-customer relationship.

A key aspect of CRM is gathering customer data in order to strategically align products to customer needs.  This prevents customers receiving marketing material they are not interested in.  For example, if Pro-Angler were aware that a particular customer was only interested in fresh water fly fishing and is an expert, they would avoid sending special offers on educational courses and saltwater bait fishing.

The CRM software was bought as a complete package. It maintains a database of customers to whom the company sends out emails and newsletters every two months containing specials and new products. When new customers order from the website, they are required to register their name and contact details which are then automatically entered into the database. They can optionally include other information such as age, delivery instructions, fishing areas of interest (fly, bait, freshwater, saltwater), and favourite target species which further assists Pro-Angler in accurately targeting market segments.

Current e-commerce Strategy

In addition to becoming an additional point of sale, Pro-Angler's website provides information about the products available for sale, course information and a list of regional distributors.  Links are available to fly fishing guide sites, guides, tours and educational courses. The website allows customers to conveniently research the company, its products, and other external information before making online purchases.

When customers order electronically, an email is sent to Jack and Gavin who then manually process the order. Once the product order has been placed, the customers receive automatic email communication confirming their order and the details.

In addition to the generally accessible sections of the website, there is a members only section for registered customers and distributors. When a customer logs on using their specific username and password, their details are automatically presented for them when they wish to order. They are also able to change their personal details at any time and are assured that these details are only accessed by one person (the website administrator) and will not be distributed, hired or sold to any third party. Using the website, Pro-Angler distributors are able to adjust the details on the products they supply to customers. The website also maintains specific information for each logon registration to privately separate pricing structures between customers, guides, and distributors.

Pro-Angler also use the Internet to conduct supplier research and, where available, order products online. Market research on competitors and potential suppliers both domestically and internationally is performed and Gavin uses the Internet to contact international suppliers with the aim of becoming an Australian distributor.

The Pro-Angler website uses Secure Socket Layer (SSL) technology. The company also employ the services of Thawte, a digital certificate authentication provider, to maintain a level of security that enhances customer confidence in online transactions. Thawte provide a method for customers to check and verify the company registration documents and the site's registered domain name before entering any sensitive information.  Jack checks updates to the virus definitions and system security patches daily. Physical security is in place using alarm systems and daily backups are made to company data.

Jack uses Asymmetric Digital Subscriber Line (ADSL) broadband for his Internet connection allowing high speed access and faster downloads at a reasonable cost. ADSL is connected 24 hours per day and enables Jack to use his existing telephone line whilst simultaneously accessing the Internet.  As Gavin's Internet access requirements are lesser, an additional telephone line has been installed to enable dial-up modem connection.

Revenue and Costs

* Note: Capital Expenditure was amortised over a four-year period

Financial Analysis

Additional revenue generated by Pro-Angler's e-commerce initiative contributed a total of $50,000 to the company's gross profit in 2001. Coupled with net cost savings, the net operating benefit of e-commerce was $52,844 for the year.

Total cost savings attributed to e-commerce amounted to $16,650 in 2001. Reductions in postage and printing saved the company $3,000 and $6,000 respectively as the production and distribution of hard copy catalogues decreased significantly. Reductions in staff time required to compile, fold and send the catalogues saved a further $2,000. Communicating via email improved staff efficiency, saving $5,200, and telecommunications costs were reduced by $450.

Pro-Angler's initial e-commerce investment totalled $19,965, including $7,500 in website development costs and $2,500 for the CRM software. Jack and Gavin spent a total of 300 hours designing the system ($6,000) and allocated $3,500 to offline advertising of the website. An additional telephone line was required for Gavin's Internet connection, costing $275, and domain name registration was $190 for three years.

The total ongoing cost for e-commerce in 2001 was $13,806. The majority of this expense was incurred by time spent in system administration, totalling eight hours per week ($6,400).  Thawte authentication services cost the company $200 annually whilst website hosting costs were $420. System maintenance to the value of $400 is being invested in upgrading the system to include a back end database and $4,991 was allocated to the amortisation of capital expenditure over a four-year period.

Jack's ADSL broadband connection is provided at a rate of $60 per month ($720 annually), whilst Gavin's dial-up connection costs $480 annually plus $195 in dial-up charges.

Non-financial Benefits

The Internet has provided Pro-Angler with a tool enabling online marketing, point of sale, and communication. The company's brand has been promoted far beyond the narrow focus of magazine advertising and mail-outs, and the CRM software has enabled them to accurately target promotional material to existing customers. The convenience and time saved with electronic ordering compared to phone or mail ordering has benefited both Pro-Angler staff and their customers.

Challenges

Gavin and Jack found that establishment costs were higher than expected and that they underestimated the time, resources and effort required for a successful implementation. After spending 300 hours designing the system, Gavin and Jack outsourced the task of web development in order to obtain a higher graphics quality.

Future

Future plans for Pro-Angler's e-commerce implementation involve a continuous development plan for the website to enhance its feel and appearance. Key goals include modification of the layout, a reduction in the amount of text, improvement of image quality, and newsletter enhancement with a better design and layout.

Gavin is also keen to expand the business with a view to forming a business partnership in the near future.