| Problem Flight-shop Airlines ran a mail order operation using its inflight magazine as the promotional tool and order form. The operation barely broke-even and there were constant fulfillment problems. Revidio were asked to review the business and determine if it was worth the effort to continue. |
CASE STUDY: Mail order profits
| Approach Understand problems with current business and identify and evaluate most suitable model for success. The project took three parallel tracks: (1) an evaluation of the logistics problems, internal/partner competencies, (2) insights from other retailers with a thorough review of the profitability of each product on offer. (3) concentrated on the demand mix and the characteristic of the passenger segment that were interested in mail-order buying. |
| Results Automation changes to the fulfillment supplier eliminated problems and changes to the product line - made with insights from the customer and the product profitability analyses - simultaneously brought an eight-fold increase in profits and a tripling of turnover |
Benefits
The variety of potential
customer interests
inherent in an international
airline network is
formidable. Moreover, the
Mail-order segment, is not
the same as inflight sales.
The revenue interest to an
airline of such operations
in higher 'wallet-share'.
And the key to profitability
and growth was (a)
understanding key
customer segments and
matching their product
needs, and (b)
demonstrating to
management just how
profitable the ancillary
revenue could be.
The variety of potential
customer interests
inherent in an international
airline network is
formidable. Moreover, the
Mail-order segment, is not
the same as inflight sales.
The revenue interest to an
airline of such operations
in higher 'wallet-share'.
And the key to profitability
and growth was (a)
understanding key
customer segments and
matching their product
needs, and (b)
demonstrating to
management just how
profitable the ancillary
revenue could be.
