Friday, 11 December 2009

Reinvigorating brand Santa (reprise)

The present situation

Santa has won the hearts and minds of his customers. But growth is fuelled by population expansion, retention rates are average at best. The customer relationship starts round age three and fades ages 7 to year 9. Santa is privately owned so there is no financial reporting requirement. The business model is hazy; it is not clear how Santa makes its money. To grow the business you require cashflow or substantial capital. Property lease back is a non starter; they only seem to have seasonal concessions within a variety of retail outlets. Lapland HQ is not practical for other businesses of this scale, so you wont be able to find alternative tenants. Opportunity cost of these assets would seem to be close to zero.

The solution to turning Santa around must lie on the revenue side of the equation.

Our recommendations.

1. Brand identity. Santa, St Nicholas, Father Christmas, Papai Noel, Babbo Natale – the different names dilute the brand. Choose one name and stick to it. It worked for Snickers. Whilst a name that resonates with the Chinese market is tempting we feel an English name provides the greatest global reach. SantaServices gives you brand stretch.

2. Create added value services e.g. charge for different delivery options, delivering on Christmas Day should be the premium not the standard service.

Why not charge for returns or provide warranties? It estimated that 15% of presents are damaged on Christmas Day. This must be a significant revenue opportunity.

3. Merchandise yourself how about replica kits for children; think laterally! What would be the equivalent of the soccer away strip? What about a light suit for hotter climates. Don’t be a slave to red.

4. Investigate sponsorship opportunities. Formula 1 would offer the best benchmark. Look for brand synergies, but obviously avoid competitors like DHL, red letters days unless there is a clear income opportunity.

5. Share of hearts. Make sure is on all packaging and clothing. “This present was bought you to by” reinforces the brand.

6. Embrace digital. Letters posted up chimneys is a nice touch but difficult to believe it is practical. And this hardly good for the environment. Email has to be the way forward. Make the website work harder, a personalised web experience is essential. And of course this year we are expecting mobile technologies to take off so integrating SMS is a must.

7. Brand experience days help your best customers embrace the brand. It is probably Pizza Express No.1 marketing activity. Children come along make Pizzas in the morning and pester their parents in the afternoon to return in the evening - and they pay for it.

8. Business continuity. Business is over-reliant on one man; no one is going to invest in a business without a clear succession plan. Consider an X-Santa type show.

Give Mrs Santa more of a role cf Cameron and Brown. Older men into children can be perceived as unusual e.g. Michael Jackson.

9. Go beyond the seasonal demand. One day a year! Enormous opportunity even if we don’t go 24x7x365. Of course it is possible more frequent Christmases may be difficult to market but the core competence is distribution and logistics. Look to provide corporate outsourcing solutions.

10. Develop a retention program for teenage into adult years, you know all about random acts of kindness. Make sure the C in CRM stands for Christmas.

11. PR. Appearance is everything. Looking that comfortable in the present climate does not seem appropriate. Even Puff daddy is forgoing bling in concession to the crunch. Obesity and children is a hot topic. We really do live in an age of style over content so think about going on TV with Gok or Gillian Mckeith.

12. Crisis management. Don’t get pissed in public even seemingly indestructible can be destroyed with 1 or 8 moments of madness. (Tiger Woods)

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United Kingdom
Just curious about marketing, psychology, economics, business, irrational behaviour, people, models, communications, advertising, market imperfections, b2b marketing. I work in the marketing communications industry for OgilvyOne.