Santa, many thanks for your time yesterday. It was very useful to get feedback from you and your colleagues around our interim findings, and I thought it would be helpful to summarise the key points of the discussion, writes Fiona Czerniawska, co-Founder of Source.
We’re all aware that the current business model leaves you exposed on several fronts. Amazon is just one of many possible players who could seriously threaten your position as a ‘category of one’, but the chances are high that specialist Xmastech firms will also emerge that exploit specific pain points in what we can all agree is now a massively overstretched operation.
In the past month, we’ve spent time with your functional heads, spoken to elves at all levels, and held focus groups with some core customers (the idea of setting up fake grottos in department stores was an inspired one, and we’ll obviously make sure that the little girl in the 14th floor flat does get the pony we promised her).
Our initial conclusions fall into four main areas:
Customer engagement: Sending a letter to the North Pole is quaint, but it won’t wash with the drag-and-drop generation. The three-year plan we mapped out for redesigning the front-end of your business does look a bit daunting, but it’s going to be critical if you want to maintain your competitive advantage.
Pricing: The old sherry / carrot / mince pie approach really isn’t working anymore, with only 15% of present ‘drops’ yielding results, barely enough to fuel a standard reindeer pack. We suggested moving to a performance-related system in which interactive feedback cards are left alongside the gifts, encouraging recipients to select what they think is an appropriate reward, which is then automatically credited to your account. My sense is that the discussion around this was coloured by a sentimental attachment to the sherry, and I’m sure that’s something we can work around.
Delivery: You currently employ somewhere in the region of 1m elves, keeping them on the books even though your volume of activity is very seasonal. We’ve also noted that it’s getting harder to recruit, as younger elves don’t find the idea of working underground in sub-zero temperatures with poor mobile phone coverage particularly attractive. The solution here is to reduce elf-dependency levels – and we brought along a couple of prototype ‘assets’ we thought could help. Obviously, it was hard to gauge the reaction to these once my iPad had been smashed by your Head of Elf Welfare, but perhaps it’s something we can revisit in Phase 2.
Range of services: We were slightly taken aback by the negative reaction to our suggestions around outsourcing, but acknowledge that our use of the phrase ‘rambling conglomerate’ was unfortunate. We’ve obviously let the people at FedEx know that you probably won’t be taking this forward for the moment.
Once the bruises have faded, we’ll get cracking on the second stage of this exciting (and challenging!) project.
Wishing you a very happy Christmas from all of us here at …
Fiona Czerniawska is a leading commentator on the consulting industry and a co-Founder of Source, who provide specialist research on the management consulting market to consultants and their clients.
© Fiona Czerniawska 2015. All rights reserved.Reproduced by permission.