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15 | What customers really want – A customer-centric strategy for telecom operators
Let's take a look at the retail industry, which has very slim margins and slow
growth. Here, innovation seems a difficult issue too. In response, retailers
(traditional and online) had to significantly change their customer philoso-
phy. The challenges they manage are similar to those of telecom operators
today: They have to serve a mass market with complex product portfolios.
We have included the following project example to highlight how other
industries leverage their customer insights.
Project example 3 – Boosting profitability in the retail industry
with customer-centric strategies
Challenge: A retailer suffered from declining customer satisfaction and
declining sales volumes. The company was in no position to analyze the root
causes as its customer segmentation was based on elementary demographic
data only.
Therefore, the project goal was to obtain a better understanding of the cus-
tomer base. The idea was to improve the brand's perception by customers,
raise customer profitability and ultimately make the brand more attractive.
Solution: We matched individual purchase behavior data, generated via
a loyalty card program, with national household panel information. This
enabled us to analyze 60% of the total sales volume in depth. Based on this
data, we came up with a sophisticated customer segmentation approach,
including ten customer segments (such as "Young and fast cuisine", "Healthy
nutrition" or "Conservative and demanding"). Together with the client, we
devised a precise and highly differentiated customer strategy by
> Identifying the effects of national consumer trends – such as
a trend toward a lifestyle of health and sustainability (LOHAS)
> Estimating how the segments defined react to these megatrends
> Reviewing each consumer segment in terms of potential sales
growth, profit and strategic attractiveness
> Defining promising target segments based on trend, shopper
and sales data
> Attracting new customers to the focus segments and retaining
customers in the secondary focus segments
We quantified each step based on customer data. This also helped us
optimize store layout, so that the customers in the various segments
could easily find all the products they are likely to buy.
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