Have you ever been standing in a line at a “Convenience store” waiting for the clerk to serve a person in front of you wanting to buy lottery tickets or cigarettes or propane? If so, you have not been shopping at a convenience store owned by a customer of Ozanne Analytics. Customer service with rapid entrance and egress is never more important than at a convenience store. Customers are in a hurry whether it be to get their morning coffee or pick up that missing ingredient required at the party that is about to start. Service delay causes dissatisfaction and a search for a satisfying experience some place else. Working with a chain of regional convenience stores in an analysis of their store level data and data about the environment in which each store operates, our analysis showed that there were clear store characteristics related to increased revenue and, even more so, increased profitability. There were the easy answers that most convenience stores discovered years ago that are directly related to ease of entrance and egress:

1. Sufficient parking;
2. Stop light allowing for a guaranteed maximum waiting time;
3. No divider strips limiting access from one direction; and
4. A corner location.

Perhaps, since most convenience stores incorporate two or more of these in there site location, these were not the large drivers of profitability. A relatively straightforward statistical analysis of the data revealed one characteristics of store service related to a 6% elevation in revenue and a double digit profit differential. These stores were few in number, but each had an innovative manager and one common characteristic – they had established a second check-out to handle “special event” purchases, usually the sale of lottery tickets. A potential revenue/profit enhancement solution seemed at hand. From here, the only challenge left was to decide what other slow moving services should be offered at a separate check-out point and two other services emerged from observation and discussion – cigarette and propane sales. Second check-out points were established to handle these slower moving types of transactions including:

1. Lottery;
2. Propane;
3. Cigarettes usually; and
4. Sometimes gasoline.

This approach allowed the quick entrance and exit customers to avoid the interference of slower moving customers. Customer satisfaction increased and profitability rose substantially and even more than predicted.

Have you ever thought that you were overpaying for a service that you wanted? If so, you may have been purchasing from a supplier who ignored all of the data they possessed on the issue. Here is the story of one business with a lesson.

The Ozannes were asked to help better understand the impact of price on retention rates for an important business to business supplier of information. The business was convinced that it possessed a large market share (it turned out to be 25%) and that its competition was extremely limited. Since it believed it was unable to meet its revenue targets through business growth, senior management was determined to increase prices to meet the growth targets.

Of course, there are many elements that drive retention and price is but only one portion of the value/price relationship. With that in mind, we set about to attempt as best we could to isolate the impact of price with the client understanding we would error in our final assessment.

The assessment showed that their was relatively unitary elasticity in the relationship between customer retention and price at a price increase of between 4% and 6.7%; with greater than unity retention at rates below 4%; and a dramatic falloff of about 1.3/1 at rates between 6.7% and 10%. Above that point, there was no useful data. Utilizing this analysis, marketing recommended that the price increase be held to less than 6.5%. Upper level management overruled this recommendation and price increase were established at 8% to 10% over the next 4 years.

While changes in other dimensions of the market had influence, market share declined to something under 14% and loyal customer retention dropped from the mid 90% to the low 80%. First year customer retention dropped more dramatically from the low 70% to below 50% while revenue dropped considerably as measured in constant terms. Marketing management has since departed and major changes elsewhere are coming. Here, the Ozannes failed in their obligation to convincingly established the validity of their argument. Now, the challenge is help find the keys to save the business.

While pricing was not the only issue, and it never is, other problems were exacerbated as a result of a pricing decision based upon internal business drivers rather than market conditions.

For those organizations with a small or youthful analytic staff or a complex project that you may want to repeat, Ozanne Customer Analytics Group offers special educational services. The objective of these special services is to teach your staff analytic techniques and best practices while providing immediate support for that important analysis on which you can afford NO MISTAKES. We provide the initial training to your staff on the techniques that are most useful in performing the analysis you need. Then, we continue to provide support and consultation to you and your staff as the project continues.

You gain the expertise to perform similar analysis in the future while securing the experience you want for the present.

You win twice – quality education for your people and consultative advice as well.

Quality and education never are cheap. But, you will find this approach a great bargain.

Creating an efficacious event without destroying a budget requires a great deal of knowledge and skill. A major international events’ business faced a difficult problem. Attendance at one of its most important events was declining: it was increasingly difficult to secure the “right” visitors (high impact opinion leaders), and, costs were soaring. Predictably, their partners were becoming more and more angry with the situation. Ozanne Analytics was employed to determine what might be done to help eliminate this problem.

Since this was an annual event, we were able to employ previous attendance information to provide the data required and develop a scorecard for each potential visitor. The ROX Predictive Scorecard employs sophisticated proprietary modeling to parsimoniously determine a score for each potential attendee designating the probability that each will attend the event.

The scorecard revealed two extremely important expectations:

1. A large percentage of previous visitors had a zero likelihood of attending the event.

2. Opinion leaders, those most important to the event’s perceived success in the eyes of the programs paying exhibitors, had very low likelihood of attending.

Ozanne Analytic personnel worked with the event sponsor to address these issues. In so doing, several approaches to improving efficacy and controlling costs were pursued.

Among these approaches:

1. No contact with those unlikely to attend – often they had either been accidental visitors, changed positions or industries, or were not interested.

2. For those virtually certain to attend, improve the efficacy through ongoing interest specific content.

3. For others, improve the efficacy for both the sponsor and the visitor through various types of contact based upon areas of interest and attendance likelihood.

4. For the opinion leaders whose importance was critical to the events success, personal high level contacts and a specific efficacious event within an event was planned and executed. As a result of these efforts, all but one of these high impact opinion leaders attended the event.

For an investment of $35,000, the event saved $0.5 million alone by not mailing to those who were virtually certain not to attend.

The efficacy of the contacts made with attendees prior to the event led to increased attendee satisfaction while exhibitors were elated with the attendance and discussion with the key opinion leaders. The “problem” is that expectations for future events – both competitive and sponsor – increased dramatically. Not a bad problem to have.

FORTUNE Custom Projects and D&B to Publish Outsourcing; Featuring Groundbreaking D&B Research

MURRAY HILL, N.J. – (BUSINESS WIRE) July 25, 1997 – The Custom Projects Division of FORTUNE magazine and Dun & Bradstreet, two of the business world’s best known publishers, will join forces for the first time to produce Outsourcing: Managing Strategic Partnerships for the Virtual Enterprise, appearing in the September 29, 1997 issue of FORTUNE. The announcement was made here today by P.J. Boatwright, Director of Marketing for FORTUNE and Michael R. Flock, president of Dun & Bradstreet Asia Pacific/ Canada/ Latin America.

With D&B providing the information, the special section will offer case studies and information on how leading-edge companies are using the outsourcing lessons learned” to build competitive advantage worldwide. This joint endeavor will also feature the premier of the D&B Barometer of Global Outsourcing, the first comprehensive measure of global outsourcing.

It is estimated that U.S. companies in 1996 spent between $60 and $100 billion on outsourcing, and that by 2001, the use of outsourcing will more than triple. On the crest of this breaking tidal wave, Outsourcing will also explore the following key topics:

- Outsourcing as today’s fastest growing business strategy – How to manage the new extended enterprise – Selecting the right outsourcing vendor – Which functions should be outsourced – Turning vendor relationships into mutually beneficial partnerships

The emphasis on reducing the size of manufacturing plants and the workforce has led to a virtual enterprise model in which only core competencies are retained in-house and the rest are turned over to outside experts,” said Dr. Marq Ozanne, vice president ” market research and planning for D&B, developer of the D&B Barometer of Global Outsourcing and adjunct professor of business at the University of Connecticut. In today’s increasingly competitive business environment, the winner-takes-all question is no longer ˜To outsource or not to outsource? It’s ˜What and how to outsource? Those that find the answers will be the management stars of today and tomorrow.

Dun & Bradstreet (D&B), a company of The Dun & Bradstreet Corporation (NYSE:DNB), is the world’s leading provider of business-to-business credit, marketing, and purchasing information, and receivable management services. The corporation, which also includes Moody’s Investors Service and Reuben H. Donnelly, is headquartered in Murray Hill, N.J. and employs 16,000 people in 7 countries. For more information about D&B, visit the D&B web site at http://www.dnb.com.

For information about advertising opportunities and text coverage in Outsourcing, contact Lisa Wood of FORTUNE at 505.820.7981 or e-mail her at lisa@fvg.com