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October 30, 2006
The Dashboard Makes The Difference
Today I had a great discussion and I learned how a dashboard can really make a difference. The case at hand is a manufacturer of prescription glasses. Not the frame, but the glasses itself. Lets call them ClearSight. Although the products are of high quality, this is not always recognized by the end consumer, who chooses a pair of glasses mostly based on the frame. The brand of the glass is not an issue. ClearSight doesnt sell to the public itself, it works through opticians. What can ClearSight do to improve its position in the market?
What traditionally happens is that ClearSight would start to build a brand preference with its target audience, so that consumers ask the optician for a special brand of glass. This would be a multiyear effort at a considerable cost. It would be better to build a brand preference with the opticians, as these are easier to reach through the existing infrastructure of doing business. However, it needs to be different than competing on price, as in the end that doesnt lead to loyalty, there is always someone who can do it cheaper.
ClearSight realized it operates in what I call a performance network. A performance network consists of all stakeholders that are involved in bringing a product or service to the market. In order to optimize business performance, stakeholders in the performance network realize they need to optimize the performance of the whole network, and not each stakeholder by itself. Stakeholders include suppliers, customers, society, regulators and other involved parties. ClearSight realized that in order to be successful in building loyalty with the opticians, while maintaining high margins, it needed to find a way to make the opticians more successful in the market.
ClearSight offers a marketing program to the opticians. When an optician guarantees a certain amount of business, it can apply for a membership with a trusted third party. The third party runs a marketing factory to produce mailings, a customer database to analyze and benchmarking information. All customer facing activities are done under the label of the optician, who basically outsources (part of) its marketing. The result is a double whammy loyalty program. First of all, because of the increased loyalty between consumer and optician. If a consumer is reminded once in a while to have his or her glasses serviced, do a new eyetest once in a while (in many countries this can be done by an optician), the consumer is more likely to come back for a new pair of glasses, obviously powered by ClearSight, and probably sooner than the consumer wouldve replaced glasses without these triggers once in a while. At the same time, ClearSight creates a much more meaningful relationship with the optician, that is based on process integration (through the trusted third party) instead of pure price negotiations.
Success is primarily measured in terms of return on investment for the optician. This produces a triple win: the optician increases its business performance, ClearSight secures its revenue stream and can improve its market share through better service and the trusted third party is paid per subscription, so it directly needs to keep the opticians happy.
The dashboard has a central place in the whole initiative, it functions as the main feedback mechanism for the optician. Through the dashboard, the optician sees how his or her sales is benchmarked to comparable opticians, what the customer satisfaction scores are (from the survey the third party runs with all customers), including a call-back list of people who had complaints, what the return is on direct marketing campaigns, and all kinds of information on the data quality, for the optician (who owns the customer data) to act upon. Ofcourse the dashboard contains data of all sales, and not just of ClearSight prescription glasses. The trusted third party is legally bound to keep that information hidden for ClearSight, who only gets statistics on how its own sales is going. The dashboard, not the quality of the glasses, is the competitive differentiator.
A wonderful example of information democracy in action.
Posted by Frank Buytenkijk at October 30, 2006 12:45 PM
