After the introduction of a new set of offers (where the cost structure favored the new offers), we needed to determine why old offers were still getting more than expected substantial share.
The issue was how to restructure the business to encourage purchase of new offers.
A number of offers were simulated, some to sweeten the new offer, some to "disincent" the old offer. In each of these simulations, profitability was adversely affected.
More significantly, the data repeatedly indicated that the new offers should have more share and an explanation was needed for the difference between the in-market experience and the model predictions.
With high confidence in the data, we looked at other areas of our business. We discovered that the dealer-channel incentives favored the older technology (offers). This translated into extra sales effort in pushing the old offers and fewer distribution points for the new offers.
We introduced new sales incentives, added distribution for the new offers and successfully flip-flopped the mix without upsetting profitability.
The impetus to identify and repair the problem was the SUMM® data. This evidence suggested that the new offers should have performed better and opposed speculation that the new offers may have been flawed. Without confidence in the data, the real problem could have remained unnoticed.
After the introduction of a new set of offers (where the cost structure favored the new offers), we needed to determine why old offers were still getting more than expected substantial share.
The issue was how to restructure the business to encourage purchase of new offers.
A number of offers were simulated, some to sweeten the new offer, some to "disincent" the old offer. In each of these simulations, profitability was adversely affected.
More significantly, the data repeatedly indicated that the new offers should have more share and an explanation was needed for the difference between the in-market experience and the model predictions.
With high confidence in the data, we looked at other areas of our business. We discovered that the dealer-channel incentives favored the older technology (offers). This translated into extra sales effort in pushing the old offers and fewer distribution points for the new offers.
We introduced new sales incentives, added distribution for the new offers and successfully flip-flopped the mix without upsetting profitability.
The impetus to identify and repair the problem was the SUMM® data. This evidence suggested that the new offers should have performed better and opposed speculation that the new offers may have been flawed. Without confidence in the data, the real problem could have remained unnoticed.