A private equity client was building its acquisition case. It needed clear assessment of the marketing and cost performance on a travel business selling cruises, skiing and exotic travel via internet and telephony channels.
David’s specialist team assessed online and telephony channels, as well as its digital analytics capability, using online digital and inbound outbound specialists to assess operation.
Our assessment of online channels showed a reasonable performance in supporting different devices and operating systems, with some undesirable variation in consumer response dependent on the device they were using. This indicated opportunity was being lost, simply because of website support of different access platforms. A deep dive into data indicated some opportunities to improve elements of the customer experience, for example how customers landed when responding to outbound SMS and email communications, and transitions between pages of content. Digital analytics capability was immature. These factors indicated material upside to existing plans was available.
The business model was heavily dependent on telephony channels for converting interest into sales, with a mix of inbound and outbound calls to progress sales. Partly this was due to intrinsic factors in consumer behaviour, part was due to signposting and website capability. In analysing contact centre operations, we found that average conversion rates were typical for this kind of business. However, individual agent performance was highly variable, indicating opportunity was being wasted. Our analysis indicated that this was due in large part to the recruitment of less skilled staff during seasonal peaks.
Although of secondary importance in terms of profit compared to conversion rates, we looked at cost performance. Unit costs were much higher than benchmarks for comparable sales performance, due to team size and inefficient staff scheduling. Additionally handling times were impacted by immature support of processing by applications.
The proposed acquisition was a successful niche direct marketing business that “recycled” the results of prospecting calls to insurance customers, by building a database of contactable customers with pertinent details on the cars that they owned. Our client believed that this stream of data could be used to increase sales within its motoring service business. Our assessment was that provided the source data predicted accurately the timing of important events such as an MOT or service, the propensity to respond to a marketing message would be much higher than a normal cold call. Thus direct marketing campaigns to engage customer via text and/or email, together with selective use of outbound telephony, would achieve good conversion rates and revenue uplift.
We identified that there were some prerequisites for success that required both initial investment and ongoing operational expenditure.
These were