Case Study

We began working together in 2009 and our first step was to use our AIME Tracker to assess the strengths and weaknesses of the client’s service in the eyes of its potential Buyers, using the five key RAAVE® dimensions of Relevancy, Association, Accessibility, Value & Expectation. This gave us an overall score, which we termed the “Effective Net Preference® (ENP) Score”.

This identified a number of very practical steps the client could take to improve their sales performance, profitability and customer retention. Examples included:

Relevancy

First up, a large number of the client’s customers were one person businesses and they wanted smaller pack sizes and more bundles in key product ranges like envelopes and sundries. These were implemented and product penetration of these goods amongst this target group increased significantly. Deeper analysis enabled us to understand which types of products had the greatest propensity to encourage new customers to use the service and which might drive sales short term but have no longer-lasting effects. The difference in turnover growth between the two was worth over 6% of annual sales and the analyses showed what product characteristics would indicate in advance whether a product was likely to be highly incremental or not by being able to relate them the factors that would determine product relevancy.

Association

Our initial assessment, confirmed by subsequent monthly tracking, was that their performance on Association was the weakest of the five drivers, Fortunately they were still ahead of competitors but the situation was changing rapidly. Subsequently they re-launched the brand supported by TV advertising, the first time they had used that media.

The resulting increases in the Association score are as shown in Diagram 1 below (the information on the vertical axes have been hidden to preserve client confidentiality):

The improvement in the Association score and the impact on overall ENP can clearly be seen. Moreover, because we also knew the relationship between ENP and sales as is highlighted in diagram 2, we know the impact that this gain in Association had upon sales and profits. These showed gains in total sales of c.4% which meant that the ROI on the activity was close to 100%.

Accessibility

The third example of the benefits the client has derived from our work was in reducing the disincentives to using the company’s service. Even though this driver was a strength for the client with over 90% satisfaction, changes in the marketplace meant that expectations were rising and what was deemed as satisfactory service yesterday would no longer be so tomorrow.

Research was therefore undertaken to see what aspects could be improved and the likely impact on customer retention and loyalty. This enabled differing alternative service options to be ranked in terms of their likelihood to improve ENP and consequently share of wallet. The result was the introduction of a choice of delivery day – in the past all orders were delivered next day but the research shows that for some people this was actually a disincentive to ordering if it happened that next day delivery was going to be inconvenient. The impact on sales, customer acquisition and customer retention more than offset the cost of providing the service and, in fact, cost of delivery was actually reduced compared to overnight delivery!