Centralization improves system management and payment processing for KOA.
For many companies, convincing franchises to accept corporate technology initiatives may seem like a shot in the dark. Kampgrounds of America (KOA), Inc. found that the key to technology acceptance is to offer features that franchises can't get on their own. Overcoming this barrier was especially important for KOA since 468 of its 480 sites are franchised. The other 12 and its Web site, www.KOA.com, are operated by KOA corporate out of Billings, MT. Although the campsite industry is not known for its advancements in technology, KOA recognized that its campers and franchises would benefit from a centralized system accessed via the Internet. Beginning in January 2001, after a testing period, KOA began to offer its KampSight[tm] system to its entire chain. The system includes campground management software, access to a central database of KOA customers, and frame relay credit card processing.
Centralized System Has Its Privileges
In 2001, KOA linked more than 50 campsites to its centralized KampSight system. The campgrounds didn't need to purchase the software and don't maintain the system themselves because they access it online via a virtual private network (VPN). Corporate KOA benefits from centralization because it is easy to upgrade the software, fix bugs, and provide support for the franchises from one location. The setup also allows the company to establish a camper database that participating campsites can tap into. "Everyone who uses KampSight adds to the information it contains. Whether it's camper preferences, addresses, or how they heard about us, all of that is now gathered and can be analyzed immediately," said Jef Sutherland, VP of information services at KOA. "Centralizing the data gives the campgrounds a real advantage as well as giving customers the feel that they are part of a unified KOA system."
The centralized system also makes it easier for KOA to distribute and track its loyalty programs' Value Kards. If a campsite is not connected to corporate directly, it sends loyalty applications to Billings, MT, where camper information is manually keyed in to the system. With the manual method, the turnaround time could take as long as a month before a camper receives a card. With KampSight, applications are automatically processed, and Value Kards are in the mail within three days.
Central Payment Processing Integral To System
Another aspect of KampSight that attracts KOA franchises is the opportunity for centralized payment processing. KOA has estimated that 60% of its campers use credit cards when booking reservations online, over the telephone, or once they arrive. Since credit has become the major way to pay, it was important for KOA to integrate its payment processing into the rest of the system. When KOA corporate built KampSight on its IBM iSeries platform, it chose to integrate JavaCard payment processing software from GO Software (an ROI company). JavaCard in conjunction with Paymentech, a processor and acquirer of credit card transactions, allows any campsite connected to the centralized system to use KOA's always-on frame relay connection for transactions.
KOA franchises that do not use KampSight, use various credit card processors and connect to them via a slower dial-up terminal. Many campsites go through local banks causing transaction rates to vary from campground to campground. "We are saving franchises money with the frame relay and single processor because of the higher volume of transactions over a dedicated connection," Sutherland said.
Since the JavaCard payment processing software is integrated into the KampSight system, the campsites get better transaction rates because they can pass along more customer information to the processor. When a campsite is taking a reservation over the telephone, it inputs the reservation into the computer system. If the credit card processing is not integrated into that system, the employee cannot process the customer's deposit without going to the separate dial-up terminal. "With a dial-up terminal, the credit card transaction is done after the fact, and so the customer's address information is no longer available. The integrated system provides name and address verification, which guarantees us a better rate and works as a real-time fraud prevention tool," Sutherland said. With the centralized system, the transaction takes only 3 to 4 seconds to complete - an improvement in customer service over its previous 20-second transaction times.
With its disciple campgrounds up and running on the system, lack of interest is not what is preventing more campsites from logging on to the KOA system; the next obstacle is lack of connectivity. Although 8 out of 10 KOA campgrounds are located within 100 miles of metropolitan areas (population of 50,000 or more), if the sites can't get an always-on Internet connection, they can't use the online system. "We know that in the near future, more connectivity options will become available such as wireless and satellite," Sutherland said.
KOA has looked at its technology investment as a method to gain more KOA campsites and retain as many franchises as it can. "When we ask private campgrounds to hang a sign in their campsite that says KOA, they ask what it will do for them. The technology is the clincher, and as more sites come on board they will not only benefit from KOA corporate initiatives, but from each other as well," Sutherland said.