Create Improved Customer Experiences Through Internal NPS Surveys

B2B Collaboration creating Customer Loyalty - A Unique Approach to Service Organisations

Medibank Private recently announce an agreement with the Coles Flybuys program where customers will qualify for one FlyBuy point for every $2 spent on monthly health premiums and triple points on dollars spend on fruit and vegetables in Coles stores. This adds up to a saving of $250 a year for a family of 4.

Who is funding this sizeable saving? Are customers paying more for groceries or more on health premiums? Customers do not have to necessarily pay more on either if the supply chain is improved.

If the supply chain can be managed, upwards or downwards, higher margin in-store brand products can be sold at a higher value per kilogram. This is where Coles' interest in packing freshly made salads starts to make a lot of sense. If vegetables can be washed, pre-cut and packed into ready to eat portions, customers will pay more per kilogram for fresh food.

Medibank Private is managing its supply chain through its 'members choice' providers, which leaves members with $0 out of pocket in many cases.

Both organisations have a few million customers, Flybuys were quoted to have 6 million members, Medibank Private, 4 million members. With the obvious overlapping of members, and scope to grow and add value for customers, these organisations are creating new customer colonies whose buying preferences are influenced on both a conscious and eventually on a subconscious level. Perceived benefits are high in times when customers' attention span for finer details such as actual points accrued through loyalty schemes or reduction in health benefits are limited.

The impact on consumer behaviour through innovative collaboration systems such as this will be fascinating.

The 80/20 Fallacy

Byron Sharp[i] found that Pareto’s 80/20 principle is a misleading simplification within a number of markets. Research found that the Pareto principle in a number of countries amongst a number of categories are closer to 60/40, that is 60% of the turnover comes from a 40% customer base, or even 50/50.

Coca Cola describes a ‘heavy’ user as someone that purchases Coke 12 times a year! Hardly what we expect!

I expect that within services this principle would be even lower.

This week ANZ announced a full year profit of $5.66 billion http://bit.ly/S1ReeR noting the bank’s ability to ‘adapt to a changing environment’ as one of the reasons for its success.

Peter Drucker said 'because its purpose is to create a customer, any business enterprise has two and only two basic functions: marketing and innovation'. 

If service organisations want to thrive, they need to develop innovative strategies to attract and retain the attention of a much larger customer base that doesn’t necessarily spend significant amounts with the organisation.

This is where technology plays a major role. We have to get smarter at using technology to identify and ‘draw in’ customers into the sales funnel. I will discuss various strategies in my upcoming blogs.

---

[i] How Brands Grow – what marketers don’t know, Oxford University Press, 2011

Which industry is really driving the economy?

Focusing Your Business on the growth areas of the economy.

A review of industry growth in Australia since 2007.

One of the fundamental principles of growing a business is to understand the economy’s fundamental growth trends by industry. Most organisations sell a core range of products and or services to one or more industries. For example providing engineering services to the mining and construction sectors or selling products through retail and wholesale.

This data can be useful in considering which industries have proven strong growth in the past using a range of measurements, are resilient and continue to be a major employer. Whether your business is supplying a product or service to one or a number of industry divisions, this data may be useful in deciding where else you could or should offer your product or service.

Which market sectors drive the core Australian economic activity? Mining? Health? I argue that the market sectors with the largest proportion of revenue (as measured by earnings before tax) and employed persons are key indicators of economic dominance. Even more so, trends indicating continued increases in the revenue of dominant market sectors have to be key indicators of the key elements which are shaping Australia’s future economy. These sectors will offer the most business opportunities, employment, taxes for governments and investment opportunities.

Trends over time are important. The continued growth or decline of an industry over a few years can be a sound predictor of future trends that may continue. If a trend continues in the same upward/downward direction for the past 3 to 5 years, one could probably assume that unless something significant changes, such as war breaking out between two countries, that the past set trend will most likely continue into the future.

Employment statistics are important for a number of reasons. Continued growth in an industry will attract the brightest talent, this is where the most recruitment activity will be, and the most sought after knowledge workers are working. I have used this data to review economic activity in Australia. Similar data should be available for most other countries.  

For the purpose of this analysis I have combined various services together, to provide a new insight into existing data. Specifically I wanted to see what impact it would have if the various service industries were grouped together.

The following services have been grouped together: Electricity, gas, water and waste services, Accommodation and food services, Transport, postal and warehousing, Information Media and Telecommunications, Rental, hiring and real estate services, Professional, scientific and technical services, Administrative and support services, Public administration and safety (private), Education and training (private), Health care and social assistance (private), Arts and recreation services and Other services. No data was provided or available on financial or insurance services.

The chart below shows the operating profit before tax for Australia’s market sectors. From this chart it is clear that more EBIT is generated from the various services in the economy than from the mining, manufacturing and construction industries combined.  It is clear that the provision of services play an important part in Australia’s economy.

 

 

 

Source: ABS 81550DO002_201011 Australian Industry, 2010-11 (Reworked)
Let’s look at some other indicators. What about employment by market sector?

Source: ABS 81550DO002_201011 Australian Industry, 2010-11 (Reworked)

When we combine the various service industries, more people are employed in various service industres than the rest of the economy combined. Mining is the smallest employer as a market sector in Australia. Contrary to popular belief, Australia’s economy when assessed by employment numbers is driven by a range of services.

At this point you may wonder which services are driving the economy. The next chart illustrates the EBIT by service type. If you are considering adding a service element to your offer to market, focus on the dominant service industries may be less risky with a higher chance of being accepted.

 
 Source: ABS 81550DO002_201011 Australian Industry, 2010-11 (Reworked)

The table clearly shows that professional and technical services make up almost a third of all services in Australia, followed by rental, hiring and real estate services. At this point your business has two options: to provide products or services to these industries per se or to add service elements as reflected by the various service industries to your offering. Can you further add value to your market offering by adding specialised technical and professional services? Can you sub-lease a part of your building?  It’s time to get creative and think how this data can help you grow your business.

 

Disruptive technology today, tomorrow's solution

Disruptive technology is technology that comes into our worlds and disrupts existing markets and value chains. Bill Gates once said that the truely exciting part of the computer age is when it start to change the way people go around doing their everyday activities. This is when technology changes are revolutionary.

Mobile phones changed the way how we communicated twenty years ago, not having to stop at a payphone, we all embraced it in our everyday lives to feel safer and became more productive as a result, managing more activities within the 24 hours a day we are all given.

With computing becoming more mobile chances are we will be searching for and broadcasting updates and information, entertain and be entertained, browse and shop when travelling, relaxing or performing routine activities.

Tasco knows how to fit grocey shopping into the busy lives of Koreans. Click here to see how they took advantage of time waiting for the train to do grocery shopping. http://bit.ly/jD13QA

Technology will save us time, make us more productive and ultimately allow us to enjoy life more every day. Bill Gates summarised it well when he said "I'm a great believer that any tool that enhances communication has profound effects in terms of how people can learn from each other, and how they can achieve the kind of freedoms that they're interested  in".

Read more at http://www.brainyquote.com/quotes/authors/b/bill_gates.html#ibp4TY6OQKmOWmFb.99