Marketing Services Company

Situation and Challenge

  • The company was considering the viability of a new personalized direct mail and email product offering
  • The company asked Blue Ridge Partners to lay out a high-level business case based on their proposed offering design and focused on four key areas:
    • Market attractiveness – growth, the competitive landscape and the addressable market
    • Alignment with customer needs including the suitability of the target retailers, product value proposition and potential adoption hurdles
    • Ability and market credibility of the company to deliver the solution successfully
    • Financial implications of the proposed pilot and potential other scenarios with a modified product offering

Approach

  • Followed our The Nine Voices of the Market® research approach to capture qualitative and quantitative feedback from a broad range of participants including market experts, current customers, former customers, and prospects from a wide range of retailers within and outside of the target market
  • Performed extensive secondary research to determine market attractiveness, competitive landscape, and to build out key parameters required for financial modeling
  • Built a top-down market assessment to identify maximum addressable spend for the proposed offering
  • Created a bottom-up model to identify eligible customers and project potential revenues over time
  • Developed pricing guidance based upon retailers’ breakeven and ROI expectations
  • Assessed alternative solution designs and their respective financial impacts

Impact

The company revised their proposed offering prior to launch to incorporate our findings including –

  • While the target market of retailers was confirmed to be the most appropriate to pursue, retailers must overcome several hurdles before piloting the solution, including data readiness, budgetary constraints, and lack of required internal manpower
  • The company was well-regarded for their capabilities in direct mail, but perceptions of their database services and staff talent levels were less positive and required improvement
  • The proposed pricing was far in excess of what any market participant was willing to pay for a pilot program; a lower-cost solution with a higher number of touches was a much more desirable alternative

Pilot Sales Funnel

Retailer Sales Lift Breakeven with Different Average Order Sizes

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