Posts Tagged ‘Customer Focus’

h1

Rising from the Ashes? – Woolworths goes Online

April 11, 2009

The recession hit many businesses hard, even long established brand Woolworths, Britain’s major retailer, suffered massively and was forced into receivership and finally went into liquidation.

woolworths shut store

The high-street chain collapsed in November 2008, only one year before its centenary. Founded by Franklin Winfield Woolworth in 1909, Woolworths established into a 800 chain giant. Right from the start selling a variety of merchandise such as toys, sweets, children’s clothing and haberdashery. Thanks to mass production “Woolies” was able to be very price competitive and that is how they outperformed many British competitors when it came to china and glassware. According to Lavan from The Times Online,  in their first year of trade in Britain they offered free pots of tea to customers and introduced new shopping experiences through an American store layout encouraging to browse around (read more here).

woolworths-sheep-and-dog

But competing on price only is a risky game. Referring to the BBC , the main problems arose when it was heavily undermined by Amazon and large supermarkets like Tesco started selling non-food products (full story here).

Generations of shoppers commiserated with the sinking ship of Woolworths, a brand the grew up with, liked and trusted. A high amount of affection was shown when the brand’s followers on social networking sites started to increase when the recession started to kick in and Woolworths’ breakdown was covered all over the media. Referring to Marketingmagazine, Woolworth’s group on Facebook has rapidly increased exceeding a number of 23,000 members showing sympathy and sharing affection.

Whilst some were going under, investors caught interest and started to see potential business opportunities. A famous example is entrepreneur Theo Paphitis, who successfully turned around struggling and troubled retail businesses, such as the one of lingerie chain La Senza, which was one of his biggest successes (more). He is also known from the popular BBC programme “Dragons Den“, where according to BBC his focus belongs to the inheritance of his children and he is known for the sentence: “Why should I part with any of my children’s inheritance investing in this?”

woolworths-theo-paphitis

Finally, the company was bought by the Shop Direct Group and Woolworths’ are now back with a new customer focused and very interactive online strategy.  Shop Direct Group the result of a merger between Shop Direct companies and Littlewoods in 2005 is one of the UK’s largest online retailers. Despite Woolworths’ popularity critics were arguing that Woolies were “out-of-touch”, lacking customer focus, as well as interaction. With reference to Manning from the Mirror, Woolies had no real unique selling point: “It is a jack of all trades, but a master of none”.  He also refers to it as outdated in an era where online shopping is outperforming shopping in giant out-of-town centres (read more).

This shall all be changed with the new business model and a vibrant marketing strategy. Shop Direct Group’s new strategy is to reduce Woolworths’ operations on only online with a strong focus on customer information and involvement through interaction. Woolworths has been relaunched online with a very strong web presence.

Shop Direct Group, which is preparing for Woolworths’ relaunch in the upcoming summer is certainly doing a good job and improving main weaknesses. It seems like they have recognised the power and opportunities that lie in online social networks. As a sign of high interaction with customer they are collecting feedback and areas of interest through social network pages Facebook, Twitter, Spotify and last fm. They set up groups called “the first single I ever bought” and encourage users to list their experiences and create a “nostalgic playlist”. Marketingmagazine states that well renounced agencies Glue London and The Brooklyn Brothers have been appointed for Woolworths’ social media presence and engagement. In order to keep customers up to date with newest information they regularly put information on Twitter, Facebook or their newly created blog (www.woolworthsblog.co.uk). This move enables them to be much more transparent and automatically provides Woolworths with more closeness to its “followers” and their feedback. A great way for their online reputation management as well as a source for ideas or concerns from interested individuals.

On Twitter they recently tested if there is any demand for some of their new offerings and according to Marketingmagazine, Twitter followers were prompted to list their top five Woolworths’ products – a great way to conduct market research in order to detect customer’s favourites (Read more).

Moreover they have created a page specially for Easter (www.woolieswonderland.co.uk) – a page that encourages its visitors to find six virtual eggs in order to secure a place in a prize draw to win a family home entertainment system…and of course to drive web traffic and collect contacts, but don’t tell anyone 😀

woolieswunderland

All in all it seems that Woolworths is on the right course. By applying clever and strategic marketing techniques and using appropriate new media tools, they can reach their audience, engage with them and discover what are the right steps to do next in order to have a successful comeback as an online store.

Advertisements
h1

First Direct – A Fully Customer-Oriented Business Model

April 1, 2009

First Direct, one of Britain’s fastest growing banks, operate solely on a digital and phone basis (no branches) have managed to create a very impressive business model making use of new media and new technologies.

logo first direct

logo first direct

In banking, with reference to a Mintel report, there is a tendency towards customised and simplified business transactions, First Direct appears to be a simple and transparent service provider with a focus on its customers and with customer driven operations. It ticks all the boxes, of how a successful organisation should operate. Through brand differentiation, and as all their services are entirely built around customer needs. they have created something their customers can identify with. Marketing Strategist David Meerman Scott would approve of this, as he stresses the importance of creating content that solves people’s problems, rather than trying to promote the brand.

He states: You must unlearn the use of gobbledygook about your products and services. Instead start from the problems and needs of your buyer personas. (Read the full article here)

First Direct won several awards related to their operations such as: “Carbon Trust Standard” (They were the first bank to receive the Carbon Trust Standard award. More info), “Institute of Customer Services (ICS) Satisfaction Award“, “DADI podcast award” and many more. Not only that these awards improve First Direct’s brand reputation, but they certainly led also to positive publicity and word-of-mouth.

There are a two aspects I would like to consider a bit closer that give insight into First Direct’s business excellence.

Online / Telephone Banking

The benefit of operating online or via call centres is that every customer contact data is recorded and helps to develop a customer profile. This increases the quality of service as every employee servicing a customer has a wide range of technology available that provides full information about the person during the contact and thus, allows the  best possible service performance. Hence, there is opportunity for perfectly tailored database marketing to the customers. Moreover First Direct can make use of these data to learn more about their customers, make decisions about target markets for specific campaigns (customer segmentation), evaluate and compare customer values and finally, provide specialised offers for customers. Database marketing is invaluable, as it allows First Direct to create exceptionally tailored offers and services in a market based upon trust and confidence.

Telephone and Online banking can be perceived as a move towards a greener economy that supports the carbon footprint reduction. Having branches all over the country is related to high maintenance costs. In the case of First Direct these costs are limited to two headquarters and therefore the funds can be invested in consistent improvement of services, quality and technology. Besides,without the overhead of managing and maintaining branches First Direct are able to channel more resources into web development.

Interaction

First Direct make perfect use of their web page, a very fresh, creative and interactive offering – atypical for a bank in my opinion. The webpage provides podcasts with recent queries, concerns and expert information about interesting issues for their consumers (check it out). Moreover, one can find useful information about how to save energy at home. One podcast by “Energy Doctor” Mark London from “Energy Saving Trust“gives specific advice for energy savings in every household, by visiting a customer’s house (listen to the advice here). Not only are they are anxious to keep their own carbon footprint low, they also motivate their customers to take part as well as promote and encourage them to turn off the function of receiving paper bank statements in order to support their campaign “virtual forrest“. First Direct claim to plant one tree per 20 customers who switch onto paper-free transactions and let people vote where the tree should be planted. Another interesting approach is that they provide a section called “enthuse” with video clips of customers, who tell you their personal experiences with the bank and the reason why they are satisfied. These people can be seen as so called “brand advocates”, as they promote the bank by spreading their favourable perceptions and thereby generate greater brand awareness. It’s more credibe when someone like you and me gives you advice, rather than a brand trying to promote itself. This is supported by several consumer behaviour studies which identified higher confidence from consumers in personal recommendations amongst acquaintances than in advertisements.

These examples show how much more one can do with the help of new media tools, and how much more a customer may expect from a simple bank website. And as their side wouldn’t be already much more advanced that the ones from other banks, First Direct have only recently introduced a new tool: the little black book. This serves in form of a social network that is based on recommendations from First Direct customers to First Direct customers, where they can exchange information about travel, restaurants, bars, shops, services, money-saving tips etc. A great idea considering that a third of First Direct’s customers join via recommendations from existing customers, as stated in Chris Laweer’s article on FutureLab. First Direct state:

As first direct customers, you’ll know by now that we’re not like other banks. We tend to do things a little differently. We know you appreciate that – and that’s precisely why we wanted to create the Little Black Book.

Or rather, why we want you to create it. Because the Little Black Book isn’t just another review site. It’s more of a unique source of inspiration – a collection of interesting recommendations made by people like you for people like you that you’re unlikely to find anywhere else but here. And it’s exclusively for first direct customers.

A very smart move to engage with their customers! Not only did they build a social network for and with their customers, but also they gain further insight into interests and specific data about their customer. This in turn, will allow First Direct to create even better and more tailored offers for their customers. Imagine Mr X will show as being very proactive and keeps posting reviews of British heritage tours he’s made. First Direct needs some sort of reward for this customer. That they can tailor an offer, fully based on personal interests, in Mr X’s case probably a short trip to a place of interest – or even better, one that matches his interests, but it is not recorded that he has been there yet!

It appears that First Direct spends more time and effort in getting to know their customers in order to provide them with the expected services and added value. In essence, it excites me to think how great marketing opportunities must arise from all the customer data First Direct has access to. Unfortunately I don’t know anyone who is banking with them, and have no personal experience, so I cannot add any personal judgement. However, my impression stays the same. First Direct have created a very impressive business model, that seems to be a cutting-edge example for the creative and successfully implemented use of technology and new media means!

In that context, based on another statement from David Meerman Scott that says:“You must unlearn the idea that “leads” are the only way to measure your marketing efforts. Instead, consider how you are engaging your buyers and building a position as a trusted resource”, he may compliment First Direct’s efforts once more, as that is exactly what they are doing.