Archive for the ‘Mktg – Customer Development’ Category

Odds: Are casinos really that smart?

December 4, 2014

Harrah’s is a poster child for “predictive analytics” … using hard numbers to make good decisions.

image

Why then – asks the IO Creative Group of tiny York, PA – did the Las Vegas big boy casinos lose over one billion dollars? (more…)

Odds: Are casinos really that smart?

February 21, 2014

Harrah’s is a poster child for “predictive analytics” … using hard numbers to make good decisions.

image

Why then – asks the IO Creative Group of tiny York, PA – did the Las Vegas big boy casinos lose over one billion dollars.

According to IOCG, casinos attendance is up, their hotel stays are up, their night club business is up, restaurant and bar sales are up.

How could their profits be down by one billion dollars???

It is because of their belief that new customers were in order – which attracted a lot more customers who are completely NOT PROFITABLE.

These new Vegas fans sleep all day, party all night and do not gamble. They don’t shop nor do they utilize the services and amenities of the buildings.

Vegas became married to the idea that their money should be invested in attracting new younger, hipper, sexier customers and they achieved that.

What they failed to do was to invest in their current very profitable customers who were actually making them money.

Casinos got caught up in the “shiny object syndrome” —  the need to go after something new when their most profitable market was already right in front of them.

When they were going after completely new markets, they should have been further investing in the one they already had.

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IOCG offers up a couple of ways to increase current customer “monetization”:

(more…)

Odds: Are casinos really that smart?

March 25, 2013

Harrah’s is a poster child for “predictive analytics” … using hard numbers to make good decisions.

image

Why then – asks the IO Creative Group of tiny York, PA – did the Las Vegas big boy casinos lose over one billion dollars.

According to IOCG, casinos attendance is up, their hotel stays are up, their night club business is up, restaurant and bar sales are up.

How could their profits be down by one billion dollars???

It is because of their belief that new customers were in order – which attracted a lot more customers who are completely NOT PROFITABLE.

These new Vegas fans sleep all day, party all night and do not gamble. They don’t shop nor do they utilize the services and amenities of the buildings.

Vegas became married to the idea that their money should be invested in attracting new younger, hipper, sexier customers and they achieved that.

What they failed to do was to invest in their current very profitable customers who were actually making them money.

Casinos got caught up in the “shiny object syndrome” —  the need to go after something new when their most profitable market was already right in front of them.

When they were going after completely new markets, they should have been further investing in the one they already had.

* * * * * *

IOCG offers up a couple of ways to increase current customer “monetization”:

(more…)

Congrats on your new baby … need some Disney duds?

February 16, 2011

TakeAway: The Walt Disney Company wants to clothe newborns with its newest priority, Disney Baby.

Its distribution model starts with 580 maternity hospitals in the United States.

A representative visits a new mother and offers a free Disney Cuddly Bodysuit, a variation of the classic Onesie.

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Excerpted from NYTimes, “Disney Looking Into Cradle for Customers ” By Brooks Barnes, February 6, 2011

In bedside demonstrations, the bilingual representatives extol the product’s bells and whistles — extra soft! durable! better sizing! — and ask mothers to sign up for e-mail alerts from DisneyBaby.com.

In this new venture, the company gains access to the maternity hospitals through a company called Our365, a business that sells bedside baby pictures.

Our365 pays hospitals for exclusive access, and companies like Disney pay Our365 to promote their own products.

 

More than 200,000 bodysuits will be given away by May, when Amazon.com is set to begin selling 85 styles for a starting price of $9.99 for two; Nordstrom and Target will follow with more Disney Baby items, including hats.

The endeavor dances close to a flame. Disney has suffered harsh criticism in recent years over products directed at the very young. The fiercest battle has involved Baby Einstein, the Disney-owned maker of “developmental and entertainment” videos and toys for babies and toddlers. The Campaign for a Commercial-Free Childhood, a nonprofit organization, claimed victory in 2009 when Disney, apparently acknowledging that the products did not turn babies into geniuses after all, offered some Baby Einstein refunds.

Certainly hospitals have given new mothers gift bags for decades. In recent years, however, more have banned the practice, citing criticism that free baby formula, for example, discourages breast-feeding. Privacy also is a concern.

Disney already operates a line of licensed products for infants, but results have been limited because Disney has relied almost entirely on simple licensing deals with companies like Kimberly-Clark, the maker of Huggies diapers. Grouping baby products under one brand that is controlled and heavily marketed by Disney represents a bigger opportunity.

Edit by AMW

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Call centers aren’t just cost centers

December 16, 2010

TakeAway: Many consumers have effectively become unreachable to marketers.

Choosing not to receive email, direct mail or phone calls, businesses are looking for ways to connect with these customers.

Toward this end, many companies are re-orienting customer service call centers to do sales pitches.

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Excerpted from Advertising Age, “Why Marketers are Turning Call Centers into Profit Centers,” by Michael Bush, December 13, 2010

Next time you’re on the line with a call center complaining about a product not working properly, don’t be surprised if you’re not rushed off the phone in record speed. The interactions between consumers and call center reps are evolving from hurried griping sessions to extended sales pitches and consultation meetings.

In fact, more and more marketers are looking to turn their call centers into revenue generating centers, according to a new study by Portrait Software, a provider of customer interaction optimization software. A number of factors are driving this shift but none more significant than the challenge of reaching consumers when a growing number of them are opting out of direct mail and email and opting into do-not-call lists. The study shows that 69% of large business-to-consumer marketers view their call centers as “business critical revenue generators.”

Jeff Nicholson, VP of product marketing at Portrait Software, said … “If you take a deep look into the existing customer bases of many marketers one of the largest segments they have are the unreachables,” …

“These customers have opted out of email, unsubscribed or added their name to a do-not-call list. Considering what that does to the potential for increasing the customer lifetime value and the potential to reach out and retain customers it’s dramatic. But when you have people calling into your call centers, in some cases this can be your only opportunity to service that customer, cross-sell them or get them to un-opt out.” …

Edit by DMG

 

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Full Article
http://adage.com/article?article_id=147618

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A very soft sell from Ikea in China

December 8, 2010

TakeAway: Even though the average Chinese consumer can’t afford most of the furniture in Ikea, the company is encouraging potential customers to spend a lot of time in its stores.

Eventually when individual purchasing power catches up to China’s macroeconomic growth, the company hopes to be top-of-mind for that new bed or sofa.

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Excerpted from Bloomberg Businessweek, “In Ikea’s China Stores, Loitering Is Encouraged,” by Michael Wei, October 28, 2010

Yang Shuqi paces the aisles of an Ikea store in Beijing, looking for a “small bed with toys.” She’s not planning to buy one—her grandson Beibei just needs to take a nap.

Unfortunately on this Saturday afternoon, every bed in the 43,000-square-meter (463,000-square-foot) store is occupied, with some children and adults fast asleep under the covers.

Managers at the Swedish furniture retailer don’t mind. They figure that the more customers choose to relax in its Western-style showrooms or grab a cheap snack at the in-store restaurants, the more likely they’ll be to make a purchase once their incomes catch up with their aspirations. …

Ikea plans to more than double the number of its stores on the mainland by 2015, to 18, on a bet that incomes in China will continue growing at a fast clip. (Per-capita gross domestic product has more than tripled in the past decade alone). …

Market researcher Euromonitor International expects China’s home-furnishings market to surge 17 percent this year, to $28 billion. “Government stimulus spending and favorable policies toward retailing and consumer lending have encouraged overall retail growth in China,” says Alex Liu, a Euromonitor analyst in Shanghai. Ikea, which has been in China since 1998, doesn’t break out sales for the country; Euromonitor figures the Swedish retailer has the biggest share of China’s home-furnishings market, at about 7 percent.

Even after years of record-breaking economic growth, however, China’s per-capita gross national income ranked 120th by purchasing power last year, according to the World Bank. So, for now, there’s a lot more looking than buying for many Ikea visitors. At the Beijing store, Xu Nan, a 22-year-old college student, had one of her friends snap a photo of her lounging on a black Vreta sofa that sells for 7,999 yuan ($1,197)—the equivalent of one-third of China’s annual per-capita GDP. …

Edit by DMG

 

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Full Article
http://www.businessweek.com/magazine/content/10_45/b4202022164114.htm

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Puttin’ on the Ritz

October 5, 2010

TakeAway: Responding to the sharp decline in rates consumers will pay for luxury hotels during economic hard times, Ritz-Carlton will join airlines, credit-card companies, and many other hotel chains in offering a loyalty program to its customers. 

“Ritz-Carlton Rewards” will let guests earn free nights at other hotels.

The high-end chain had long held that its customers weren’t interested in anything as pedestrian as “points,” but the recession has hit luxury hotels even harder than the rest of the industry.

The new points program is one of a number of actions taken at Ritz hotels to try to attract more business and leisure travelers.

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Excerpted from the Wall Street Journal, “Ritz Carlton Bows to Recession, Adds Rewards” By Alexandra Berzon,September 14, 2010

 

“We always said in the early days, we’re not going to give you a toaster, we’re going to give you service,” said Ritz President and Chief Operating Officer Herve Humler. “That was part of the philosophy.”

The occupancy problems for luxury hotels have been compounded by what is known within the hotel industry as the “AIG effect“: Corporations that were the beneficiaries of taxpayer dollars or were laying off workers were criticized by politicians for booking expensive conferences in luxury resorts, and so they started to pull back. Recently, that problem has begun to ease slightly.

Even before the recession, the Ritz found it necessary to make changes in its high-class veneer, becoming more relevant for younger generations that were put off by the traditionally stiff service at many of its hotels.

That led to such changes as making the greetings from staff members less scripted, adding more technology to the rooms and removing the traditional piano and harp players from the lobbies in favor of, in some cases, pop music.

After spending years studying whether to include Ritz in its loyalty program, Marriott executives said that focus groups in the last year and a half began to show that customers were demanding enticements, particularly in Asia where Ritz is expanding. 

The company designed the new loyalty program to keep it separately branded from the general Marriott points program, Marriott Rewards, which has more than 30 million members who can earn points, which can be redeemed at any Marriott hotel as well as several airline partners.

 

Ritz’s top competitor, Four Seasons, has no plans to implement a loyalty program.

Edit by AMW

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Full Article:
http://online.wsj.com/article/SB10001424052748704190704575490113861298350.html

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Creating demand … by tapping non-customers.

December 8, 2009

Ken’s Take: “Blue Ocean” Strategists say to stop competing head-on in established markets and refocus on uncontested part of markets — the wide open, blue ocean.  A critical componect of a blue ocean strategy is to “unlock” non-customers …

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From the folks at the Blue Ocean Institute …

Traditional strategic thinking looks to capture a greater share of existing demand. But companies can reach beyond existing demand to unlock demand from non-customers, too.

The key is to understand the three tiers of non-customers who buy opportunistically  … or  refuse to buy  …or are unaware of the product offering.

First-tier non-customers are closest to the existing market. They are the buyers who minimally purchase an industry’s offering out of necessity but are mentally
non-customers. They are waiting to jump ship and leave as soon as an alternative is spotted. These are potentially “soon-to-be” non-customers.  But, if they are offered a step-up in value, they can be retained … and may even increase their purchases.

Second-tier non-customers are people who consciously refuse an company’s offerings. These are buyers who have recognized an company’s offerings as an
option to fulfill their needs but have opted against them. These are “refusing” non-customers.

Third-tier non-customers are furthest from the existing market. They are non-customers who have never thought of a company’s offerings as an option. These are “unexplored” non-customers.

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The key question to ask: “What are the factors keep non-customers out of the market … and what can be done to pull them into the market?”

Start by by focusing on the key commonalities – not differences – across these non-customers and existing customers to gain insight into how to create demand among these non-customers.

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