DAEMON QUEST - Miguel Gallo

Channel Strategy

Sun, 24 Jun 2007 13:38:18 +0200

Keys to successfully managing the multi-channelism era

Abstract

A correct Channel Strategy comes through a correct Segmentation Strategy. The appropriate channel should be assigned to each customer segment.
The challenge for companies that opt for “multi-channelism” is knowing how to orient each customer towards the channel that best fits their profile.
It is equally as important to analyze each channel’s cost and profitability, as it is to analyze the cost and profitability of each customer in each channel.
The boom of new channels such as Internet or mobile phones has changed the rules of the game in many sectors. However, not all companies should be “multi-channel”. Only those for which it is clearly profitable.
A new channel must respond to a new customer segment, and it must have a value proposal that is clearly differentiated from the rest of the channels.
The entrance of a new channel must be studied meticulously in order to avoid overlapping and conflicts, both internal and external.

The explosion of the Internet and other channels of customer communication has brought with it a revolution in distribution channels, and it has posed serious challenges to companies in terms of taking maximum advantage of each sales channel’s potential. However, the challenge of the Channel Strategy is not new.

Without a doubt, new technologies have marked a before and after, but many companies’ successes and failures have been linked to the accuracy with which they have managed their sales channels. Changes in spending habits, constant modifications to distribution structures, transformations of entire industries and sectors, and the growing power of certain distribution giants are some of the factors that contribute, along with the Internet boom, to the Channel Strategy being a key factor to growth for any company.

Starbucks Coffee. Having coffee: a personal experience

Fri, 20 Oct 2006 13:38:40 +0200

In the United States, when you talk about coffee, you talk about Starbucks. The surprising American coffee shop chain is on the road to achieving what its main driver and strategy director, Howard Schultz, proposed one day: to become the most well-known and respected brand on the planet. Based on a very specific customer service concept and propelled by an aggressive national and international expansion, the company made its popular logo shine brightly in half the world, and it is known by the majority of the population.
It all started with a coffee shop in Seattle in 1971, and not long afterwards it began its local growth, entering the coffee importation business and roasting beans from its own plants. The business made a 180-degree turn in 1982, when Howard Schultz joined the company, charged with handling marketing tasks and managing the retail business. The director took a trip to Italy in 1983, where he discovered the charm of Milan coffee shops, the taste of “espressos”, and the pleasure of stopping for a cup of coffee in a pleasant environment. Convinced that the European way could work in the United States, he made efforts to apply it to his business.

Levi's, made-to-order trousers

Fri, 20 Oct 2006 13:36:29 +0200

It is one of the reigning companies in terms of personalization… “Create your Own Jeans” is the slogan behind Levi’s strategy, and it has been met with wide acceptance, especially among young customers.
The idea is that, whatever the customer’s style (from the most classic to the most cutting-edge), they always go to Levi’s as an unbeatable and prestigious reference point in the world of denim.
Some data speaks for itself:

Levi's has approximately 1.5 million possible combinations of trousers, based on three criteria: style, width and length of leg, and fastener.
Close to 50.000 sizes and approximately 30 different styles allow for those 1.5 million versions.
Levi's has created a system capable of taking the customer’s measurements and having their jeans ready in less than two weeks.
The repetition rate for Levi's customers is close to 40%, while the average repetition rate in the consumer goods sector rarely surpasses15%.

Companies fail in Customer Obtainment Strategies

Wed, 18 Oct 2006 18:06:27 +0200

A Daemon Quest study reveals that only 12% of companies know how to select their target audience.

Managing customers is a task every company faces, but doing it correctly, with the proper previous planning, is something that very few can claim to do well. This is shown by a recent Daemon Quest survey among more than 200 high-level directors from General Management, Sales Management, and Marketing Management at some of the foremost Spanish companies.

A high percentage of companies lack specific plans and strategies for Customer Obtainment, which noticeably affects aspects such as the proper use of available sales resources, the performance of marketing campaigns and, above all, the company’s profitability. The results of the survey show, among other aspects, that the problems in this field derive from sensitive existing shortcomings in defining and segmenting a company’s customers.

Clubs and Loyalty Cards.

Wed, 18 Oct 2006 10:22:34 +0200

Abstract

Loyalization is a concept intimately linked to the value segment of each client.
The most commonly used loyalization, actions, based on programs and points cards,are only profitable and effective if their goal is knowing the client and taking strategic actions based on this knowledge.
It has not been proven that the most loyal clients are the most profitable; nor that the most profitable are the most loyal.
Customer clubs are turning into one of the most valid options for linking the client to the company.
The clients are aware of their value, and they want to be treated accordingly. It doesn’t matter if they are new or old clients.
Applying Customer Intelligence Strategies allows us to know with complete certainty which clients to retain, which ones to reward, and what exit strategies to give to the clients of least interest .

Products and services are copied, reproduced, and imitated. Clients have become progressively intelligent, and, and they study, examine, choose, and decide. Churn rates are going through the roof. In this framework, retaining the client, the principal ingredient of any company, has become critical. Loyalization is a term being used often. So often, in fact, that it is used for practically everything, as indiscriminate and massive a marketing action is. Loyalization is not only retaining or creating a link with a client. This concept must go beyond that and be anchored in value: knowing only how much a client is worth to the company, it will be possible to apply profitable strategies that retain, reward, or invite the client to abandon. Shedding light on the basic relationship between strategies of loyalization and segmentation by value shows that traditional techniques included under the umbrella of “loyalization” are proving to be not very effective. All companies aspire to having loyal clients. Why? It is assumed that because it is easier to attend to them, it is easier for them to acquire new products and services – cross-selling, up-selling – and they have a higher level of

Many airlines don’t reveal the big secret behind cheap tickets

Mon, 25 Sep 2006 16:44:55 +0200

Passengers are mislead by the enticing offers airlines are launching

If you’ve flown for 15 or 20 euros, congratulations; you just joined the lucky few. Buying a ticket at those prices must have been quite an odyssey, or a stroke of luck. Why is it so complicated?

Airlines are holding two aces up their sleeve when they launch these enticing offers. Number one: that ticket they’re offering from Madrid to Milan at 20 euros will end up costing 50 or 60 euros, because when you’re ready to make the final reservation you’ll see that the final price didn’t include airport taxes, handling charges, fuel supplements, or VAT. For this reason, flying for 99 cents, as some low-fare airlines have advertised, is impossible.

Selling double

Wed, 07 Jun 2006 11:55:09 +0200

We usually think that public personas are the only anonymous beings, but that’s not true. Anonymity is a condition within reach of very few people, at least in our society. From the time we’re born, we leave a personal trace, a thread by which it is possible to discover all the steps we have taken in our lives. We are listed in a civil registry; the school we went to maintains our academic records; our bank knows all of our financial movements; our insurance company knows what incidents have occurred in our home; the telephone company keeps a complete record of the phone calls we’ve made, when and to whom… If anyone wants to go unnoticed, they should have been born at another time.

Selling more, better, and intelligently

Tue, 18 Apr 2006 11:52:09 +0200

Any company can have the best product or service in the World, but if it doesn’t know how to sell it, it will be worthless. As harsh as that seems, it is the reality that many companies face daily. They know they are good at what they do, but they see how competitors with theoretically worse products or services gain market share daily. What good is it to have the best if nobody knows it? Unfortunately, quality alone is not enough. The market must know who we are and what we do. In order for that to happen, the Old Marketing rules no longer work. There are new focuses.

How to sell more and better? This is the million-dollar question. The answer won’t fall from the sky. It will come from a rigorous analysis of the Marketing and Sales management methods that each company applies, and from adopting changes based not on what university textbooks teach, but rather on the demands of a constantly changing market made up of customers who are increasingly demanding, well-informed, and promiscuous in their relationships with providers.

Vueling "takes off" in Spain combining low costs, quality, and innovation

Mon, 10 Apr 2006 19:10:33 +0200

The complex airline sector has been revolutionized by the arrival of Vueling Airlines, a company that has proven that “low-tariff” concept is perfectly compatible with quality service, innovation, and the use of new sales channels.

Technical data:

Company: Vueling Airlines
Objectives: to become established in the Spanish market with a “low cost + quality” positioning.
Solution: developing a sales and Marketing strategy that has proven that “flying cheap doesn’t mean flying bad”.
Results: customer satisfaction rate of 4.46 points out of 5, and a recommendation rate of 99%.

Harrah’s opts for Customer

Mon, 21 Mar 2005 16:41:38 +0100

Harrah’s opts for Customer
Intelligence and wins
Faced with decreasing profits, Harrah’s Entertainment, one of the sector’s pioneer companies and today the absolute leader of this industry, decided to abandon its direct marketing policy, the indiscriminate advertising and promotions that their competitors were fiercely carrying out, in order to stop, take its time, and carefully analyze the profile of its current customers, who, like the rest of the competition, it was in danger of losing forever. Harrah’s Entertainment, like its rivals in the sector, was swimming in a sea of data that made it impossible for them to approximate their consumers’ reality. It had created a points program that allowed it to find out certain information about its customers through traditional loyalization techniques, but it was not able to distinguish its most profitable customers; those which deserved the focus of its retention efforts and new product and service offers, in an urgent context of crisis.

Starbucks Coffee. Having a coffee: a personal experience

Sat, 12 Mar 2005 12:02:26 +0100

It all started with a coffee shop in Seattle in 1971, and not long afterwards it began its local growth, entering the coffee importation business and roasting beans from its own plants. The business made a 180-degree turn in 1982, when Howard Schultz joined the company, charged with handling marketing tasks and managing the retail business. The director took a trip to Italy in 1983, where he discovered the charm of Milan coffee shops, the taste of “espressos”, and the pleasure of stopping for a cup of coffee in a pleasant environment. Convinced that the European way could work in the United States, he made efforts to apply it to his business.

Fundamentals of New Marketing

Sat, 01 Jan 2005 11:44:28 +0100

From the end of classic theories to new client strategies.

Abstract

The old techniques of traditional marketing do not measure up to the current challenges.
Consumers have become more and more reticent to advertising and marketing techniques. Companies must face this resistance.
Internal and outside errors don’t help the perception of marketing within the companies themselves. It arouses suspicion in financial directors and, on many occasions, in the board of directors.
A new marketing paradigm that puts the customer at the center of the business strategy needs to be applied.
This new paradigm must facilitate the transition from relational marketing models, to collaborative marketing models, that employ a dialogue with the market.
The development of "high-tech " marketing, capable of effectively measuring results and adapting strategies with reliable data, is at the foundation of New Marketing.

More and more competitive environments; consumers who are more and more prepared and demanding; markets that are progressively more complex... the traditional techniques of old marketing do not measure up to the current challenges posed by scenarios that are difficult to attend to and understand. It is time to take a step forward and lay the foundations of a New Marketing that puts the customer at the center of its activity and combines imagination and scientific knowledge in order to achieve the best results.