A big new thing in some circles is the home hair stylist. Instead of being processed with hoi polloi, you get individual, personal, intimate attention from the stylist of your choice, in the comfort and convenience of your own home. Want to look fantastic for that do on Friday night? Well, just ask Peter or Fiona to call round at 7pm. By 8pm you’ll be raring to go.
A growing number of stylists are realising the benefits of the concept. They call it something original – Hair Direct for example – and develop their own personal clientele, who are loyal, regular and pay well. Hours can be a bit anti-social, but because they don’t have any property, rent, rates, electricity, salon design, or furniture costs they can offer competitive prices and still make a healthy living.
Another example of the burgeoning direct distribution phenomenon? Yes, but direct hairdressing is symptomatic of a lot more. For the past five years or so, businesses have been pushed, pulled, stretched, and squeezed this way and that by the rage for business process re-engineering. Now get ready for its trump card – customer process re-engineering.
BPR gets its power from the realisation that if you take a blank sheet of paper approach to core operations, it’s possible to achieve a triple whammy – becoming better, faster and cheaper. Customer process re-engineering takes exactly the same approach. But instead of focusing inwards it looks upwards and outwards, reviewing the whole process of purchasing and consumption from beginning to end with a “if I was starting from scratch” mentality.
The opportunities are mind boggling. Items on the re-engineering agenda include problem solving – inquiry handling, category/channel choice information (shall we take the kids to McDonald’s, get a take away pizza, do a microwave meal, or cook them sausages, chips and beans?), and brand choice – should the beans be Heinz, own label or budget brand?
Then there’s the purchase process – travelling to the store, going down the aisles, staring in blank bewilderment at the item, waiting at the till, ordering over the phone, etc.; the paying process – when? how? by cash, cheque, debit card, credit card, loan, lease, hire purchase, mortgage, loyalty card points, barter?; the transport process – loading into the car, travelling back home, unloading from the car; and the preparation process – setting up the new computer, assembling the wardrobe, preparing the new recipe.
Finally, there’s using and consuming, disposing of waste and packaging – often a real chore, especially for white goods – and, for many products, after sales service.
The fascinating thing is how many marketers are now seizing the opportunity to re-engineer total customer processes to new brand dimensions.
One of the secrets behind Daewoo’s spectacularly successful launch, for example, is its promise of no-haggle, non-pushy selling and its offer to take away the bother of transporting the car to and from the garage at the after-sales service end. Likewise, the airlines have repeatedly extended what they offer from what happens on board to the hassle of checking in, waiting for boarding, and more recently, getting to and from the airport.
Meanwhile, as some companies extend their brand offer to cover the whole gamut of customer processes, others see the opportunity to unbundle. Belgian Express, for example, offers no pre-allocated seats, and no meals and drinks on board – and unbeatable prices. One offer Swatch is considering for the launch of its new city car is to simply eliminate buying and after sales service – by replacing ownership with time share. Many people share vehicles, gaining access, ignition and making payments via a smart card. Swatch takes care of the rest.
Re-engineering of core customer processes is bound to continue. New communications and media technologies mean, for example, that innovative retail marketers are certain to redefine what we mean by “shop”. At the moment it’s shorthand for four very different customer processes – display, pay, distribution, and a social/leisure experience. But they can be disentangled.
What about a Sainsbury’s megastore in the City which restricts actual stock to product for display purposes only and shifts the choice process to a CD-Rom kiosk? By offering high quality refreshments, celebrity chef demos and book signings, “how to” classes, wine and cheese samplings, and a recipe ideas clinic, it could become the office worker’s lunch time destination. It would minimise the hassle of grocery shopping; maximise the leisure experience – and gain market share while dramatically cutting the cost of new store openings.
Distribution, of course, would be handled separately. Produce could be picked up at the weekend from the local store, or at the store’s petrol station (where it would be ready to be put into the boot), or even home delivered.
That’s just one of many possible configurations. A stripped down version could be offered via the Internet. Indeed, any aspect of any customer processes which can be digitalised, can be re-engineered through the Internet. But, could on-line product showcases, information for purchase choices, ordering, booking or after sales service add value to the total offer? What about on-line payments or delivery of digitalised products such as music, image, text and software?
In the US, for instance, Hallmark cards now has a service which eliminates the need to go to a card shop and sort through piles of junk merchandise that’s irrelevant to your needs. In conjunction with Microsoft, it’s offering customers the chance to design their own greetings cards on-line. Hallmark does the rest, including diary keeping, printing and postage.
Customer process re-engineering will change what marketers do, forcing them to rethink what their brands stand for and how they deliver value. From Hair Direct to global car companies, it will take marketing way beyond the communications ghetto it’s now so often stuck in – by definition, it reaches back right into the very structure, organisation and culture of the company itself. Indeed, compared with CPR, BPR could soon begin to look like chicken feed.