A leading global provider of education was looking to develop a new product for undergraduate programs and sought to identify its acceptance worldwide.

Stax answered these key strategic growth questions for this Client:

–Do similar models exist worldwide?

–Where would be the key markets?  What would be the addressable student population?

–What would be the key success factors?

FACT BASE

Secondary research and expert interviews to identify currently available innovative models across the world.

Quantitative modeling of addressable student population.

Cluster analysis to identify most successful models.

RESULTS

Based on the key success factors and actionable recommendations provided by Stax, this Client is currently launching new products in select markets within Europe and Latin America.

TIMEFRAME

Three weeks.

A private equity client asked Stax to assist a portfolio company with their channel strategy. The company manufactured products sold primarily to mass merchants, contractors, specialty distributors, industrial plants and government.

According to management, the mass merchant channel had the most revenue potential and was therefore the focus of management’s time and the company’s resources. Yet, concrete and detailed data on the market size by channel was unavailable.  Stax was engaged to size the addressable market and assess the opportunities by channel for the company—in effect, to validate management’s strategy.

FACT BASE

Stax conducted 85 in-depth interviews with mass merchants, distributors, contactors, customers, and competitors.

In addition—to corroborate and provide context for our interview findings—we analyzed available market and competitor information through trade publications, government figures, industry associations, competitive literature, and other relevant secondary sources.

RECOMMENDATIONS

Based on our findings, we suggested that management’s focus on the mass merchant channel was misplaced. Indeed, while mass merchant was the largest channel, the portfolio company had small share and its products were not well-suited to the needs of this channel.

We recommended that the company refocus on the contractor and industrial channels where its products were better accepted, share gains were possible, and price points were defensible.

OUTCOMES

The portfolio company shifted its channel strategy in line with Stax’s recommendations.

Within two years, the investors were able to make a successful exit.

TIMEFRAME

Four weeks.

An apparel retailer with approximately 300 stores [Retailer] approached Stax seeking to better understand its customer base.

The retailer was specifically interested in determining the right or optimal price on selected key items to maximize store sales and margins.

Additionally, the retailer was concerned over its promotion strategy and sought Stax’s help to identify effective and non-effective promotions, and to successfully communicate their pricing to consumers in the future.

FACT BASE

A combination of internal data analysis and original consumer field research provided the necessary information for us to complete our pricing analysis.

Specifically, we gathered internal sales, margin, volume data at the SKU level, by store, by store week (going back 2 years); promotions by product, by store and by week; and other potentially relevant factors, including store size, competitive locations, co-tenancies, and store age.

OUTCOMES

For each key item, Stax recommended price changes to optimize margins and revenues. We worked with merchant teams to adjust pricing for Spring offerings based on our findings and recommendations.

Stax recommended changes to promotion vehicles and messaging, including testing.  Worked with marketing teams to change their promotion strategy and to test potential new messages based on our findings and recommendations.

Established test and control group to assist the retailer in testing future potential pricing and promotion strategies.

TIMEFRAME

Six months.

Seeing high customer churn, our client wanted to understand the lifetime value of their customers within each segment, in order to prioritize marketing and service investments.

Our client was also shifting business from one segment to another, and wanted to see the relationships among retention, product type, rates, and sales channel to predict which customers would be most profitable.

FACT BASE

We overlaid internal data about historical acquisition and retention by segment with customer profitability and acquisition costs to define customer value within each segment.

OUTCOMES

On behalf of a private equity firm and their operating partners—with 20+ years in consumer branded products—Stax assessed the merits of a portfolio of orphan brands.

For one of the key brands, Stax assessed the brand’s ability to drive incremental sales through price increases; gauged consumer interest in product extensions; and, assessed the brands’ competitive positioning and overall brand viability given the lack of advertising and marketing to date.

FACT BASE

Stax conducted a consumer web survey of over 800 respondents and used the Van Westendorp model to assess price sensitivity.

RECOMMENDATIONS

The brand was fundamentally sound and well regarded. A small but core user base actively sought the brand out and was willing to potentially pay a price premium above what they currently paid.

For a larger portion of the population, better product placement would improve sales, as this was often times an impulse buy. While the brand itself was well-regarded, it wasn’t often thought of in the consumer’s immediate consideration set.

OUTCOMES

Based on our assessment of the market opportunity—that the brand was fundamentally sound and could be fixed with operational improvements like better in-store merchandising and product extensions—the firm decided to proceed with the investment.

TIMEFRAME

Three weeks.

A financial services client with an innovative consumer card-based payment offering was looking to reduce call center live agent servicing costs, while maintaining high customer satisfaction, and driving usage and retention. The Client:

–Sought to understand the importance of satisfaction by servicing process, from a revenue and retention perspective.

–Desired statistical analysis to justify investment and outsourcing/offshoring decisions.

FACT BASE

Stax established and quantified the links between satisfaction and revenue generation, by servicing process and customer segment:

–Developed a “baseline” by linking external customer satisfaction research with internal account-level data analysis.

–Implemented a methodology to monitor and track increases or decreases in revenue and retention resulting from operational changes, including a pilot test with an offshore center.

RECOMMENDATIONS

Identified servicing processes where high satisfaction matters (drives revenues and retention) and those where decreased investment will have minimal impact.

Facilitated reallocation of investment for specific servicing processes to outsourced/offshore centers and self-servicing channels (e.g. online, IVR).

OUTCOMES

Client proceeded with pilot tests with offshore centers and self-servicing channels for recommended low value servicing processes.

Client can now periodically monitor success or failure of each pilot test in terms of how revenue and retention are impacted, by servicing process, call center, and individual agent.

TIMEFRAME

Eight weeks.

On behalf of a private equity firm seeking an investment in a specific, branded, fast-growing fashion accessories product, Stax sought to validate the long-term growth prospects for the business by:

–Identifying who was buying [the brand] and what share of total sales and growth each age segment represented.

–Understanding how purchasing behavior varied among different age segments of [the brand’s] buyers (e.g., purchase frequency, average spend, product mix, channel choice) to inform marketing, merchandising, and messaging strategy.  Further, understanding what attracted customers to the brand—impulse purchase or do customers seek out the brand?—as well as channel preferences to inform distribution strategy.

–Assessing awareness of the brand among noncustomers and profiling them by age group, geography, and other potentially relevant demographics to understand how best to convert these users.  Also, determining noncustomer channel preferences for the category to identify opportunities to reach a broader audience through channel expansion.

FACT BASE

Stax used a web survey that offered enough scale to obtain meaningful data and reach a broad, diverse customer base.

OUTCOMES

While Stax found the brand itself to be solidly positioned, this particular fashion accessory market was (and is) highly volatile—even the strongest brand in the category could expect wild fluctuations in purchase intent year-to-year, despite enjoying a highly loyal customer base.

Provided the company took great care to sustain the “freshness” of the product—through frequent introductions of new products and designs—consumers would continue to buy the products. The brand offered attractive price points and unique styles in consumers’ minds.

In part because of Stax’s assessment of underlying market volatility, our client opted not to pursue this investment.

TIMEFRAME

Four weeks.

An investor client sought Stax’s support in evaluating the growth prospects for a national casual dining restaurant chain.

Specifically, in forecasting near-term traffic and spending patterns; evaluating the strength of the brand’s competitive positioning (against key attributes relative to competitors); gauging the degree to which the restaurant’s price-value equation was in line with consumer expectations; and validating the long-term stability of the restaurant’s customer base (e.g., declines in traffic and spend were cyclical and temporary).

FACT BASE

We used a combination of original consumer field research via a web survey to over 1,000 casual diners, and regression analysis of quarterly historical financial performance (e.g., same store sales comps, revenues per door, adjusted for average number of doors open per quarter).

OUTCOMES

The Client sought to estimate the valuation of four brands, and determine the premium that brand-aware consumers were willing to pay for a branded product versus a generic or “store brand.”

FACT BASE

11/11/11 gives us the perfect excuse to take 2 minutes out of our workday to relive the funniest moments of This Is Spinal Tap. At the same time, it reinforces to us that Hollywood is full of business lessons—in the most unexpected places.

In the scene, you hear the sustain; or, do you? Often, the going assumption is that what worked before in sales and marketing will sustain going forward. Alas, the world changes quickly, and it may be time to consider new ideas and marketing techniques. We see the greatest opportunity in digitally balancing your business—considering how much is online versus offline, and whether people still hold onto the assumption that 95% of their efforts should go into old offline infrastructure.

Ask yourself this: If consumers all want the richest, deepest sound, why do they listen to digital files that are far inferior to vinyl for great audio? Because convenience wins over sound quality, and the digital enablement of this convenience means that it’s where money is being made. Though I worked at Tower Records when in high school, I would say, “Sorry Mr. Tufnel, we need to spend more online.”

At Stax, we tap into what the markets and your customers want, tell you where to find them, and how to deliver profitably—so you can rock on.