RESEARCH CREATES COMPETITIVE ADVANTAGE FOR VIRGIN

The stakes are high for UK ISP players. In a hugely competitive and customer centric market place, it’s no longer a question of doing whatever it takes to win market share (normally at the expense of bottom line profit margins). Today’s mission is to increase ARPU’s (Average Revenue per User).

Customers are always going to be a few clicks away from their next ISP so developing long-term profitable relationships through targeted marketing is essential. Rather than trying to second guess collective and individual customer needs Virgin.net has used Confirmit, the leading web-based survey and research tool to launch products based on factual customer preferences and attitudes rather that assumptions. In the 24/7/365 world of the Internet, customer research is now the industry’s # 1 driver.

If there’s one thing that epitomises Richard Branson’s Virgin branded portfolio of businesses, it is a focus on delivering unrivalled customer service. In order to achieve this, customer and market research has been carefully woven into the very fabric of the business model of all Virgin businesses. When Virgin.net decided to bring its portal and ISP (Internet Service Provider) businesses together at the end of 2001, it selected Confirmit, the market-leading web-based business information and research management tool, to ensure it was able to understand and react to its customer requirements. Having used the Confirmit solution to gather real-time customer feedback for the portal since 1999, it provided Virgin.net with a tried and tested solution for undertaking both strategic and ad-hoc research.

It might sound obvious but the only way that a business can understand what their customers’ want is to ask them. Why then, do so many businesses continue to focus on product or technology rather than customer centric business models? Even the most basic questions about customer preference or satisfaction can make all the difference to making organisations customers and employees experience a better, more profitable one (ROR – Return on Relationships). Understanding what customers want is one of the easiest ways for businesses to drives sales, increase turnover and maintain consistent competitive advantage over its rivals. Given the speed with which trends and tastes change on the Internet, it would seem to be an imperative for the current generation of e- businesses.

Before the recent growth of e-business in the mid 1990’s, you can understand why many businesses failed to conduct market research. Traditionally, it would have been conducted by clip-boarded market research interviewers, telephone call centres or by postal surveys – all time consuming and costly, even for businesses targeting small sample groups or specific audiences. This type of research was simply not cost-effective and it was slow. Extracting and correlating raw data would often take weeks, analysis and delivering true business benefit could take up to a year. The internet provides the perfect vehicle for increasing and improving a business’ communications and interaction with its customers, providing greater customer insight.

With a history of building successful businesses based on research, when Virgin decided to bring together its ISP and leisure and entertainment portal businesses at the end of 2001 under the Virgin. net brand, it was decided to drive the business forward through a strategic programme of ongoing and ad-hoc customer and market research. The portal was already undertaking a range of successful research projects using Confirmit, to deliver real-time business critical information on content, usability and customer trends. Virgin.net decided that Confirmit would play an integral part in providing essential customer feedback that would help it to make business critical decisions, driving its competitive advantage in the UK’s fiercely contested ISP market.

Kjell Øksendal, VP of Global Marketing at Confirmit’s developers, Future Information Research Management (FIRM) explains, ‘The beauty of Confirmit is that it provides scaleable real-time information research management solution in an automated process environment. It delivers mission critical business intelligence that can be acted upon immediately. Following the success of this approach to customer research for their portal business, which enabled Virgin.net to continually refine and improve content and the total user experience, the company has been able to conduct regular strategic research and ad-hoc surveys via the Internet, as the need arises.

‘Our web-based solution enables customers to be consulted via a media they trust and which enables them to respond when it is convenient for them. For Virgin.net this combination, coupled with significant lower costs of conduction research online compared to other data collection methods and Confirmit’s operational efficiency (zero manual data processing), has increased the amount of research undertaken. Simply more insight for less, delivered faster and across the business.’

Insight is an important part of every twenty-first century business and within the fiercely competitive ISP market it is one of the only ways to reduce churn, and develop customer centric products and services designed to have positive impact to ARPU profit. Insight also plays a vital part in driving and maintaining Virgin’s competitive advantage over the other major players in the industry. Developing the next generation of services or content ahead of the pack can deliver considerable increases in membership and revenue. Not to mention the costs of getting this wrong! The key to Virgin’s attraction to Confirmit is that whether businesses are talking to their entire customer base or a small sample group, it provides a cost-effective and fully scaleable solution.

Max Ratcliff, Customer Data Manager at Virgin.net explains, ‘Over the last two years we have developed annual research plans. This enables us to undertake periodical strategic research and ad-hoc temperature checks or test new products throughout the year – giving us a much clearer picture of our business at any time compared with an annual customer satisfaction survey.

‘Confirmit has been absolutely pivotal to the success of the Information Research Management process” continued Ratcliff. ‘Rich functionality and real-time feedback data collection processes and reporting have significant impact on Virgin.net’s Customer data acquisition costs. Confirmit has improved time-to-market and decision making efficiencies that are truly measurable in terms of bottom line savings and competitive advantage.’

It is these benefits which enabled Virgin to successfully launch its Broadband service offering, in 2002. Having used the results from one of their regular customer preference research projects to identify potential customers for its broadband services, Virgin.net undertook a trial of its new offering using Confirmit. It then analysed customer reaction on the important issues of cost, product specification and content. The results enabled Virgin to steal considerable competitive advantage over its rivals.

Max Ratcliff explains, ‘Unlimited high speed Internet access is the dream of both customers and ISPs alike. The launch of Virgin’s un-metered DSL service, Virgin.net Broadband in 2002 came amid a flurry of similar activity in the industry, as many of our competitors rushed to launch broadband services. It was important to ensure that when we launched we delivered a service our customers were happy with and at the right price, rather than launching and having to re-evaluate and re-launch shortly after, as many of our competitors were forced to do.

‘Having decided on three possible product/price models we presented them to existing customers who had expressed an interest in our broadband services along with questions on key differentiating factors when choosing a broadband provider. We were also interested in the types of content they would expect. The entire process from agreeing the three trial product models, through research, feedback analysis, product refinement and a customer confirmation research exercise, took less than 10 days – and we produced an end product which customers would subscribe to.’

The success of Virgin’s customer focused strategy and extensive external research programme, has encouraged the company to use Confirmit to undertake a programme of employee surveys to ensure that the Virgin ethos of service is maintained throughout the organisation. This approach not only enables the company to retain and recruit the highest calibre of staff, but actively reinforces the company’s policy of improving customer experience through innovation – using the creativity of its staff to meet new opportunities in the market.

Max Ratcliff says that the impact of using Confirmit to conduct online research has been dramatic. ‘Working in the ISP market our staff are used to the Internet as an every day communications tool, but with this they also understand the security and tracking capabilities it provides. While this has presented a challenge for some businesses, we experienced an increase in respondents from 17 percent with paper-based research to almost 72 percent using Confirmit. The use of the internet has also dramatically improved the quality and honesty of responses compared to similar paper-based research, enabling us to develop an improved understanding of our employees.’

Virgin.net Sales and Marketing Director, Peter Tuomey reflects, ‘The impact that Confirmit has made to our business is clear. It has enabled us to reduce our research costs by around 90 percent, compared with using a traditional outsourced consultancy. It has also revolutionised our approach to product development. The flexibility that Confirmit has delivered has enabled us to continually monitor market demand and gather invaluable feedback on new developments.

‘This approach has enabled us to develop the products and services our customers’ desire, while dramatically improving time to market – a key to success in the UK ISP market. This has delivered considerably in terms of increasing the average revenue per user, and has strengthened our customer relationships. In this way, Confirmit has become a key part of the continuing Virgin.net success story.’

ENDS