It has been some years since I last walked the floors of an operation I was managing. In that period I remember the hours / days / weeks spent pouring over spreadsheets, calculating returns on operational changes, effect of marketing programmes on my operation. So I was interested to find when I met Red Route how little companies analyse their decisions these days.
Why, companies, for those old enough to remember, went through a whole period of downsizing, de-layering, restructuring. One of the outcomes being that when they need to analyse what impact the decisions may have there was no one there to do the work. These are highly skilled people, good at interpretation and most importantly understanding what questions need to be asked.
So what do Red Route do, they act as that resource, available as required, with a pre build analytical models they can both analyse and determine outputs quickly.
In areas such as social media, advertising, portfolio management, human resource, inventory management they are able to advise clients on the best plan of action in terms of return. Here is what they say
Business leaders who want to make a rapid and significant improvement in their company’s bottom line typically have two key levers they can pull: reducing costs and/or increasing revenues.
Seeing how to reduce costs is often easier than seeing how to drive up revenues (other than by slashing prices) but unless cost reductions are done with extreme care they bring with them the very real danger that the quality of the product or service the company produces is also reduced, undermining future customer loyalty.
Worse still, the reduction in quality may go unnoticed or just be ignored because it “only affects a few customers” and “the cost savings outweigh the revenues lost”.
So although it takes more effort, finding ways to drive up revenue by better satisfying customer needs is almost always the better thing to do – gaining cost reductions as a consequence of better meeting customer needs rather than leaving product or service quality as a simple consequence of any implemented cost reductions.
Only doing what you need
Moreover, improving customer satisfaction does not require changing everything in the mix. As proven by the academic literature on the ‘theory of constraints’, you only have to find the one or two things that are holding you back from step-changing your effectiveness at meeting customer needs to have a dramatic impact on perceptions.
So, if you can use market research to find out the few key things that people really care about in the type of product or service you provide, and then use data analysis and modelling to understand the extent to which revenue would increase if you could make them easier to obtain and/or more valuable to the customer, then you will have created a non-price competitive advantage that will boost your business. Plus you will have much stronger control of your own destiny.
But if you invest time and money changing elements of the mix that have little impact on customer perceptions then you will waste that time and money and not get the bottom-line profit improvement that you need. Similarly, if you cut back on something that consumers care about without actually knowing you’re doing so, you put the future of the business at greater risk. Making sure you find the right insights and turn them into the best business opportunities is what we are all about.
Vox Pops are powerful motivators
The other key thing we do is provide companies with the emotional motivation to support the changes that are needed and follow them through. The arguments outlined above represent the rational approach but few, if any, decisions are rational.
To get support for change there always has to be an emotional drive and energy behind the initiative that only comes from stories, anecdotes and examples. Using focus groups was the traditional way to uncover such anecdotes from consumers. That is no longer the case. On-line research, blogs, twitters, and feedback sites now provide a ready-made source of powerful anecdotes that can motivate change.
Numbers alone cannot get emotional commitment to a project. Having objectively collected verbatim responses from real customers/consumers that illustrate where the problems lie, the potential value of new solutions, and the intensity of passion with which they hold these views is a powerful motivator that “proves” the proposed moves are right.
Analytical Intuition
Our complete approach, our combination of hard and soft data, of numerical and emotional justification, and research and analytics, provides you with this motivational imperative alongside the size of the prize. This drives a better prioritisation of your activities, better use of your scarce resources and better company performance – enduringly.
