Transcript Document

Strategy Models
v
Who’s Got the Power?
Jake Rønsholt & Roland Gerets, Partners @ BrainTower
Strategy Models: Who’s got the Power?
Porter’s 5 forces model
Sun Tzu “The Art of War”
7S strategy Model (Tom Peters)
v
• Most strategy models are based either on a focus on
o The market opportunity
o The competition
o Inside excellence as a driver for success
• Even if these strategy models have proven their value
in time, the changes in economic and market
conditions require an open mind to incorporate new
balances of power
v
• Today, one of the key power balance changes is the
one between Provider and Customer
• This is where Arnoldo Hax’s Delta Model adds an
additional dimension by placing the Customer
centrally in the forming of your Strategy
The way to win is not to
beat your competitor
v
but to bond with your customers!
v
System Lock-in
Dominant exchange
Proprietary standard
Exclusive channel
v
Enabled through
effective use of technology
Low cost
Horizontal breadth
Total Customer
Solutions
Best Product
Redefining the
Customer
Relationship
Customer
Integration
Differentiation
Challenges to move from best product to system lock-in?
Best Product
• Product differentiation, as technology gets more
mature and lifecycles shorten, is very hard to achieve.
If your product becomes a commodity, you are
deprived from superior financial performance, from
serving your customers splendidly and from having fun
v
• Focus on being the lowest cost provider in an
undifferentiated product category will require a
continuous effort to optimize supply chain
Challenges to move from best product to system lock-in?
Total Customer Solutions
• The first move is to stop selling “products” but start
selling customer solutions. Customization, learning,
and services bundles with products as a unique
customer offering
v
• The objective value of a product or service are
secondary to the perceived value of the customer
Total Customer Solutions
Customer Integration
• Customer Integration seeks to effectively substitute for
or leverages activities currently performed by it’s
customer. Competencies will be bundled and are
brought to the customer to enhance his economics
v
• Example: vending machines (non owned) with data
supply on stock and consumer behaviour
System lock-in
Total Customer
Solutions
Best product
v
Club C-mode machines:
• Mobile phone payment system
• Member club advantages to earning points
• Points provide access towards free drinks, barcodes with offers on
mobile phones and occasionally a barcode coupon for a free drink
• Scanners
Total Customer Solutions
Redefining the Customer Experience
• Redefining the customer experience seeks to deliver a
full experience to the customer from the point of
acquisition through the complete lifecycle of
ownership of the product.
Musts are:
v
o An intimate knowledge of the customer base
o An effective customer segmentation
o A differentiated treatment of the customer tiers
System lock-in
• Example: Carglass
Total Customer
Solutions
Best product
v
Total Customer Solutions
Horizontal Breadth
• Horizontal breadth seeks to fulfil the entire customer
needs by a set of customized products and service
offerings. Features and functionalities are such that
products are unique desired and command price
premiums
v
• Example: Bol.com and Coolblue.nl
System lock-in
Total Customer
Solutions
Best product
v
System Lock-In
Exclusive Channel / Restricted Access
• Exclusive channel / Restricted access seeks to create
significant barriers for competitors to even compete
for the acquisition of customers. Attention: difficult to
achieve and sustain as regulatory practices tend to be
deployed to prevent it
v
• Example: vending machines and freezers Ola
System lock-in
Total Customer
Solutions
Best product
v
System Lock-In
Dominant Exchange
• Dominant exchange seeks to provide the company an
interface between buyers and sellers that is very hard
to displace once it achieves critical mass. In this case
the first mover advantage is critical
v
• Example:
o Nespresso (technology with controlled supply and sales
channels)
o Senseo (pad with limited exclusivity)
System lock-in
Total Customer
Solutions
Best product
v
System Lock-In
Proprietary Standard
• Proprietary standard seeks to draw the customer to
your product because of the extensive network of
third party complementors that are designed to work
with your product. This option is only feasible when
the rewards are enormous
v
• Example: Microsoft Windows
System lock-in
Total Customer
Solutions
Best product
v
Illustration of Successfully Moving from Best Product to
Total Customer Solution, with a hint of System Lock-In
The Essilor Varilux
Case
v
Customer Relationship “Management”: classic data driven model
Sources = only “external factor”:
In-company
OneListbroking
time renting, data relevance, up-to-date,
files
input continuity & volume, …?
Sources
Close the loop
Data Cleaning
Data
quality
Formatting
Standardization
Deduplication
Validation
Enrichment
Marketing
Marketing
Database
Database
Reporting &
Analyses
Profiling
v
Campaign
Mgmt
Campaign
Management
Analyses
Campaign
Sales
...
Customer Relationship: intimacy & interaction driven model
Create value for brand, retailer & consumer...
via a B2B2C contact strategy
Increase brand
Manufacturer
loyalty
Create direct
relationships
with consumers
Strenghten
independant
retail channel
Independant
Retailer
Consumer
Customer Relationship : data driven marketing model
Adding the retailer network as a source to the Marketing database...
Listbroking
In-company
files
Data Cleaning
Formatting
Standardization
Deduplication
Validation
Enrichment
Marketing
Database
Campaign
Mgmt
Reporting &
Analyses
Profiling
Campaign
Sales
...
Introduce retail network as main source of consumer data
Ensures a continuous flow of qualitative consumer data in addition
to classic list broking and in-company files
?
Consumers
Store A
Store A
Cash register
Data extraction
Store A
Consumers
Store B
Store B
Postal card
Data processing
Store B
In-company
files
Listbroking
Marketing
Database
Consumers
Store C
Franchisee C
Postal card
Data processing
Franchisee C
• What was the deal between Essilor & the independent opticians
o
o
o
To help the optician deploy a state of the art customer & contact
management and be able to implement a loyalty marketing that would
differentiate them from the competition
The objectives were: increase market share, ROI, shorten purchase cycle,
increase traffic to store, improve loyalty
Economies of scale providing access to advanced contact management tools
v
• What was the mechanism (Total Customer Solution)
o
o
o
o
The participating optician uses a web platform for input of the customer
profile, behaviour, preferences and provided services
4 clusters, centrally managed, define the customer segments and the actions
during the lifecycle
4 stages within the lifecycle are defined to optimize individualize customer
contact
The web platform tracks the customer contact / loyalty actions, which are
visualized in a dashboard with benchmarks
Customer Relationship : Individualized consumer contact
Purchase date
Re-activate
Stimulate
After
sales
Per Customer we determine:
• Expected purchase interval
• Content
• Incentives
• Contact Frequency
There are 4 main clusters, based on purchase
behavior, frequency and motivation.
They are then clustered into eye care or
fashion and then product type / age
Build
relation
Customers are reached via the right channel
Jim, your glasses
have arrived
After
Re-activate
v
Stimulate
sales
Build
relation
• What’s in it for Essilor
o
o
o
Essilor is able to implement a state of the art CRM approach with high ROI
Essilor bundles tons of information on the customer behaviour in this market
segment and is able to provide highly appreciated added value to the
independent optician
These customer insights combined with a centralized approach provide a
competitive advantage towards the large optician chains
v
• What’s in it for the independent opticians
o
o
o
o
o
The ability to deploy an powerful and advanced contact management and
loyalty strategy but with limited investment
Maximize his position as a trusted advisor with personalized service
Create image of a dynamic and proactive business
Strategy impacts main drivers for his business
Every letter generates on average €25 of business
Results:
Participating opticians
250
# consumers in Dbase
2.500.00
0
Active consumers in program
450.000
# mailings per month
# different mailings per month
Conversion
80.000
v
ROI
2250
6%
> 300%
For every letter sent, the optician gets €25 business in return.
On average an optician invests €10k per year and generates an extra €120k turnover
A clear Win-Win for Essilor
They make love with their Customers, not War with their Competitors!
•
Conclusions
o
o
o
o
•
Knowledge (consumer, shopper, customer) is Power.
When put to work with the latest technology it’s Profit!
Essilor focused on a sales channel that was seen as losing versus consolidated
chains, understood their needs and provided a solution
By providing a Total Customer Solution to the independent Opticians (A to Z
Direct Marketing Programme), Essilor actually locks-in the Channel as no one
else has such a direct access to their customers
Know the value chain of your business and where you can add value!
v
A couple of questions for your own reflexion
o
o
o
Is my Business B2C or actually B2B2C?
In B2B2C, How can I combine my strengths with B’s knowledge (and systems?)
to enhance my consumer knowledge, create more value for B and create
additional consumer contacts for my business?
The value chain: how often do I question the classic business models and
think about different models allowing me to capture more of the value?
You’ve got the Power!
Thank You
v
Facilitated by