Nestle’s customer insight creates a new market in Japan
Traditionally Nescafe was bought in grocery stores and consumed at home. As Nestle Japan searched for new ways to expand its coffee business it found that the economic downturn led to Japanese companies ceasing to supply coffee on the job for their employees. There are about 6 million offices in Japan, most having less than 20 workers and few coffee suppliers were selling directly to offices.
Nestle Japan developed the concept of the Nescafe Ambassador – an office employee with a passion for coffee, interested in collaborating directly with Nestle on behalf of their workplace and acting as an “in-office barista”. The company supplied an in-office Nescafe Barista soluble coffee machine and the Ambassadors ordered the coffee from Nestle, collected money from their co-workers for coffee consumed and forwarded payment.
This innovation came from the insight that Japanese employees liked to have the convenience of having coffee in the workplace. But more than that it was an opportunity to talk with their colleagues, collaborate and catch up with what is going on – it rebuilt their social interaction and a sense of community at work which had been lost in many office environments. Nestle was able to capitalize on this unique understanding of what was happening in the Japanese office environments
Nestle is also looking for new ways to meet the needs of Ambassadors to enhance the atmosphere at their workplaces and facilitate communication between their colleagues.
This new business model based on a customer-centric approach to business has been very successful for Nestle japan. The program was rolled out in November 2012 and by early 2015 there were 170,000 Nescafe Ambassadors. Their goal is to establish 500,000 Nescafe Ambassador cafes at the workplace as well as 6,000Nescafe Satellite cafes and Café-in-shops over the next five years.
Source: Kotler Impact, “Mind your Marketing”, Volume 1, October 2015, Business Model Innovation: The Nescafe Ambassador Program, pages 120-121
There are 5 crucial questions every leader must answer about their customer base:
1. Which customers are your most valuable and why?
2. Which customers are costing you more time energy and stress than they are worth?
3. Who are your advocates? Customers that are driving new business by referring you to others?
4. Who are your ideal prospects?
5. Which prospects are most likely to become customers and why?
Why are the answers to these questions important? Understanding who your best existing and potential customers are is essential to growth and to the allocation of resources.
By spending more time with your best customers and less time with those that drain your resources you can free up the time necessary to attract new customers.
The answers to these questions should drive your marketing strategy, implementation tactics and ultimately improved return on investment (ROI) from all of these activities.
Do you know the answers?
I recently had the pleasure of being interviewed by Linda Popky of L2M Associates, a Marketing Strategy Consulting firm.
It allowed me to reflect a little on what it takes to build a market-driven firm and why it remains a critical issue for any business. The reality is the only firms that will thrive now and in the future are those with a close eye on the marketplace.
A great example is Walmart that uses “business intelligence” technology to crunch its masses of data and turn it into actionable insight. The latest Economist magazine, describes the following case: “Wal-Mart peered into its mammoth databases and noticed that before a hurricane struck, there was a run on flashlights and batteries, as might be expected; but also on Pop-Tarts, a sugary American breakfast snack. On reflection it is clear that the snack would be a handy thing to eat in a blackout, but the retailer would not have thought to stock up on it before a storm.”
This is a great example of gaining customer insight from information which allows a company to take profitable action.
To listen to my interview on why customer insight and other market driven behaviors are so critical to business profitability click here