Industry Experience
New Product Development – Evaluate Features, Pricing
Need: Determine the viability and attractiveness of a prospective, new, B-to-B product. Evaluate the features and pricing strategy for a new B-to-B product, provide recommendations on introduction strategy, best target markets, and pricing packages for each market. The information was needed immediately.
Solution: Created a Web-based survey, using a modified conjoint process that allowed us to develop choice and take rate information specific to all product feature/price combinations. Identified very important unrecognized purchase driver, resulting in significant increase in customer acceptance, and resulting in important increase in potential price points and total revenue. In addition, developed simulator showing demand, revenue, unit sales, and sales diffusion rates for every combination of product features (including the previously unrecognized purchase driver), price, and market segment. The project was completed in 10 weeks.
Enhancing Shareholder Value – Customer Values
Need: Strategy and implementation for transitioning to an organization that drives shareholder value by focusing on enhancing customer values. Client recognized the need to change their culture and focus. Asked for our help in developing the direction and implementing the change.
Solution: A long-term project to work through the corporate evolution from a regulated, internally focused monopoly to a company focused on increasing shareholder value. We worked with the CEO, as well as senior executives. This evolution was driven by developing a deep understanding of the customer and how increasing customer value could drive shareholder value. The strategy was then tied into an understanding of importance of employee values. Customer value became the internal driver to create change. Workshops were held for senior management, a new multi-dimensional segmentation scheme was completed, new and reformulated marketing programs were put in place, and a reorganization of the internal operating processes of the organization was undertaken.
Strategy Advisor For An Unregulated Subsidiary
Need: Act as strategy advisor for a newly created unregulated subsidiary. Client wanted to develop a business plan for a new unregulated sub to sell products and services across the country. The plan had to be presented to the utility parent company’s board and had to address their financial/shareholder earnings expectations and how it would complement/fit with other unregulated subs already operating. Needed advice and assistance in developing a strategy and profitable implementation plan for the new sub, given that two sister organizations were already in the market offering different services in different markets through different channels.
Solution: We advised the client on strategy, marketing capabilities needed, the type of organization, and the business plan for the new organization. We oversaw the new product research development effort and advised the client on the pitfalls and advantages of specific strategies. In addition, we developed recommendations of how to reach customers, channels to use, and how to leverage and sell the internal skills at this unregulated sub to other sister organizations.
Strategy And Pricing For Web-Based Energy Information Products
Need: Strategy and pricing for Web-based energy information products. Client was creating a new suite of Web-based energy information management products for their business customers. Needed customer-based information and strategic advice on pricing, take rates, site feature optimization, as well as overall strategy and specific strategies for each of the products in the suite.
Solution: A paperless research process was used (Web survey and incentive). We established customer-driven prices and a targeted strategy that allowed each product to act as an integral part of the overall strategy. Pricing and product configurations acted to segment the target markets. In addition, the strategy identified most attractive candidates for the various products. We then helped sell the overall concept and strategy internally for implementation across the utility’s system.
Customer-Focused Electricity Pricing Products
Need: Customer-focused electricity pricing products. Client wanted new pricing products that could provide a transition to a deregulated marketplace. These new products would have to be driven by the needs of business customers and would focus on differentiating the organization on the basis of pricing flexibility/customization. The question was: What do our customers want and how do we give it to them?
Solution: We taught the client how to use customer values to drive pricing product development: designing pricing products specifically targeted at certain customer classes, communicating rate options and then educating customers on how to evaluate these rate options. By creating different deregulation scenarios and brainstorming with customers (commercial, industrial and residential) and internal experts, we developed 12 new customer-based pricing product options—three of which are in various stages of rollout. All three have had very successful pilots.
Evaluate Interactive Pricing Tool
Need: Evaluate an innovative concept for an interactive pricing tool that allows customers to design their own rate. Client needed to know if the concept was viable, what features would be important to users, and who would be interested in it. Previously, we had developed a series of new, customer-focused electricity pricing product concepts. Client then developed a customizable pricing tool to address our earlier research results, showing that customers wanted more understanding and control in the way their electricity is priced.
Solution: We created a Web-based demo tour of the product concept ending with a Web-based survey to measure overall interest and acceptance of the product along with a trade-off and valuation of specific product features and potential revenue streams. Next, we incorporated customer feedback into recommendations about how the product should be designed and presented and who should be targeted. We also helped the client develop the launch strategy for this new product.
Measure Customer Reactions To Renewable Energy
Need: An evaluation of the image, positioning and brand impact of renewable energy strategies. Client wanted to build a marketing strategy around a perceived customer interest in "green power." They needed to understand the potential impact of “green” positioning and “green” activities on perceptions of their brand name and on customer choice of electric utilities. The client’s key objective was to determine the value of engaging in a variety of activities in renewable energies and environmental issues to attract and retain consumers.
Solution: First, we assessed the value that customers placed on the client’s current efforts in renewable energies and environmental issues. We were then able to build a model to show the impact of renewable-based power on the customer’s relationship with the brand in terms of choice and switching. Finally, we developed the optimal mix of “green” activities and environmental positions, based on consumer perceptions. We were surprised to learn that customers do not value ALL “green” activities and programs; some activities gave the utility a much higher perceived value, and some were even negatively perceived.
Trade Allies And Heat Pump Sales
Need: Identify and quantify the impact of predominant trade ally relationships and their impact on products and services choices. Heat pump sales were flat and the client needed help identifying the cost-benefit of the channels and promotion efforts for selling heat pumps. We were asked to develop a strategy for quantifying the value and impact of each trade ally group or influencer. Secondly, we were to make recommendations for actions to best leverage the most important trade allies and influencers. Third, we were to recommend a strategy for fixing the HVAC certification program.
Solution: We identified the impact of each of the channel partners and uncovered an important (in fact, as it turned out the most important) influencer that had been overlooked in promotion strategies. In addition, the certification program for HVAC dealers was found to be a source of discontent among non-participants, and did not significantly increase the likelihood of sales among participants. Our analysis and recommendations resulted in a new heat pump marketing strategy and a reorganization of their HVAC certification program, saving significant dollars.
Customer Choice And Generation Assets
Need: Link and quantify the impact of marketing strategy on supply planning and asset risk management. Until customer choice came along, marketing strategy was not a significant variable in strategic planners’ financial and generation asset models—weather was, fuel costs were, load factors were, but marketing strategy was not. Choice changes the model, dramatically.
Solution: We developed a tool, the Asset Manager, that allows supply planners and financial risk managers to run "what if" scenarios to assess the impact of the company’s marketing strategy and customer switching profiles, on revenue, peak loads, generation needs, stock price, P/E ratios, and debt/equity ratios.
Customer Segmentation
Need: Segment customers on the basis of their values, needs and energy expenditures. The client needed to understand the differences among its customers, and also wanted to identify groups of customer that will respond to different pricing strategies or value-added services.
Solution: We clustered customers in a three-dimensional segmentation scheme based on customer values, needs and energy expenditures. Five segments emerged and were profiled. The results were delivered in the form of two software applications that allowed our client to drill down into specific customer needs and to identify groups of customers that would be most interested in products and services that meet specific customer needs.