Swisscom Mobile looks after freelance dealers

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Referenz
Scheidegger, N., Sieber, P.: The Organisation of E-Business III, Verlag Paul Haupt, Berne, Stuttgart, Vienna 2003.
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Inhaltsverzeichnis:
    1. Swisscom Mobile

    Swisscom Mobile AG (SCM) is the Swiss market leader in mobile telephony. With a good 65% share of the market, SCM has taken on the role of market maker. Subscriptions for mobile telephony are sold directly via specialist stores, via SCM’s own sales offices and via the mixed retail trade. Specialised trade accounts for 12 to 14% of sales without business subscriptions. The majority of subscriptions are sold directly.[1]

    “The specialised trade is important to us. Outlets which ensure
    good sales receive even better support with modern aids.”
    (Peter Herrmann, Swisscom Mobile AG)


    2. Autonomous specialist dealers are efficient sellers

    When Peter Herrmann took charge of looking after autonomous specialist dealers, he was flooded with a mountain of enquiries and complaints. The brand managers at SCM, communications managers and lawyers complained about how the specialist dealers dealt with prices, SCM logos, colours and promises made through advertising. This often lead to time-wasting discussions.

    The specialist dealers sell mobile telephones and accessories and negotiate contracts for the mobile carriers. SCM competes in this sales channel with the other carriers. To ensure that the specialist dealers advertise with SCM products if possible, SCM makes a financial contribution to the specialist dealers’ advertising expenses, although it only does this if the specialist dealers meet SCM standards (cf. Fig. 1).

    As mobile telephony applications are becoming increasingly complex, Peter Herrmann is convinced that the specialised trade will also play an important role as advisers in the sales sector in the long run. The specialist dealers are also responsible for their own success. They are motivated to work efficiently and to implement promising ideas quickly. SCM wants to provide optimum support for specialist dealers, so that it is even easier for them to sell SCM products.

    This support was not structured enough in the past, so that processes were inefficient and not controllable enough. This resulted in the infringement of branding rules and inconsistent prices and the aforementioned complaints.


    Fig. 1: Advertising in the trading chain of Swisscom Mobile


    3. The Advertising Generator as an instrument for dealer marketing

    There are approximately 1,200 autonomous specialist dealers in Switzerland. They have three employees on average and operate locally. In their region they know private and corporate customers. Around 100 of these specialist dealers are very active on behalf of SCM and a further 60 are also considered good sales partners. The rest do not achieve any notable sales with SCM products.

    SCM has built the Advertising Generator for the approximately 160 favoured specialist dealers. This software images various work flows which operate between SCM, the specialist dealers and the media. Peter Herrmann implemented this idea in collaboration with BS MediaVision AG. It succeeded in translating unique databases into a cleverly structured workflow. For Peter Herrmann the project had the character of an innovation: “I wouldn’t do it with any other company than BS MediaVision. They understood immediately what I wanted to achieve and backed the idea and implemented it quickly.”

    The specialist dealers use the Advertising Generator for creating and placing advertising in newspapers and popular and trade magazines. They also use it to design direct-marketing activities and POS posters in various sizes, which are produced in an imported workflow.

    Taking adverts as an example, the process is carried out as follows (cf. Fig. 2): the specialist dealer wants to place an advert in a daily newspaper. To do this, they start the Advertising Generator. To start with, they select the newspaper and the advertising format. Then they refer to the SCM templates to design the advert. As a registered specialist dealer, their logo and address is automatically included in the advert. They select the products which they want to advertise and obtain the prices for this from the SCM database [2]. They can further configure the advert by, for example, selecting an appropriate atmospheric picture. All elements are predefined by SCM. The structure corresponds exactly to corporate design standards.


    Fig. 2: Advertising Generator

    Once the specialist dealer has designed the advert to suit their requirements, they apply to SCM for financial support for the advert by mouse click. The costs for production (pre-press) and the media costs are stored in the SCM database, so that participants can see how high the overall costs are. A budget is set up for all dealers according to their performance and potential. A specialist from SCM then accesses the application. On their screen they see which specialist dealers have submitted an application which has not been processed yet. They confirm the amount, refuse to provide support or ask the specialist dealer to make an adjustment. The specialist dealer sees this information in turn in the Advertising Generator. If they agree to the proposal, they can release the advert for production. Now BS MediaVision AG takes over the workflow. It produces the advert so that it is ready for printing and files it in Print Online. The newspapers collect the finished adverts from this database and forward it to their production department.

    The specialist dealers benefit from SCM’s know-how as regards the design of their adverts in this simple workflow. The choice of daily newspaper, formating of adverts, the design of adverts and the calculation of prices are working steps which can be dealt with by the Advertising Generator within a few seconds. Without the Advertising Generator, each step would have taken a long time. The specialist dealers would also have cooperated with advertising agencies, which would have lead to extra costs.


    4. Constant dealer support has many advantages

    The Advertising Generator provides benefits for SCM in all three factors of economic efficiency, namely with respect to quality, costs and time. It also increases the controllability of processes.
  • Quality benefits:

    • The adverts of all 160 active specialist dealers now correspond to corporate design standards, legal requirements and they contain the correct prices. It is also much easier for SCM to influence the placement of adverts. The Advertising Generator provides overviews of the newspapers which are used and the number of adverts per dealer. Combined with sales success, conclusions can be drawn about the effectiveness of adverts. SCM uses this information for future applications and makes recommendations to specialist dealers about their choice of newspaper.

    With the Advertising Generator, SCM can send invitations to advertise and special offers for selected events to specialist dealers. Thus, it is able to launch a nationwide campaign, for example with a new mobile phone. A virtual campaign is created, which is triggered centrally by SCM and is sometimes funded completely by SCM. The adverts have the same structure and advertise the same products. As the adverts are processed by specialist dealers and released for publication on a decentralised basis, they are published in local daily newspapers and contain the addresses and logos of the specialist dealers who operate locally. The quality of the advert is therefore just as good as a campaign which is carried out on a purely central basis, although target groups take more notice of the advert, as local conditions are taken into account and well-known, locally active contact persons are named.
  • Cost benefits:

    • The slightest cost benefit is connected to the partial automation of the applicaiton process. This alone justifies the investment which has already been made in the new application and its operation. The break-even point is reached with 380 adverts. This works out at just a few more than two per specialist dealer. Since the launch of the Advertising Generator, there have been virtually no more objections or complaints. Thus, time-consuming discussions which have no direct benefit for sales have been almost completely eradicated.

    Other cost benefits are connected with the higher contributions of SCM suppliers to advertising, and specialist dealers and SCM save approximately 15% of costs because they use bundling methods when placing an advert.

    In addition, costs are reduced per contact due to the clever selection of media. Peter Herrmann, for example, focuses on advertisers. A nationwide campaign in a medium which covers the whole of Switzerland is more expensive than a virtual campaign, but it is more likely to attract customers’ attention, depending on the customer segment.
  • Time benefits:

    • It often took months for new advert layouts to be implemented by all the specialist dealers or their advertising agencies without the Advertising Generator. With the Advertising Generator, SCM is able to establish new ideas all over Switzerland within a few days.

    This is especially important to Peter Herrmann. The product life cycles for suppliers are actually less than four weeks. The more customers already have mobile telephones, the more important are the services of SCM. With the Advertising Generator, such services can be publicised quickly. This will gain in importance in the next few years, as most services are only just being launched. The quicker customers’ acceptance of mobile data services, for example, can be tested in the pioneer market, the quicker successful offers can be identified.

    In addition, the time benefit also means that promotions can be coordinated for special occasions. Events such as Easter are foreseeable, but the time benefit is already a big advantage for such events, as in practice events happen in a rush and there always tends to be less rather than more time to plan promotions.
  • Better control:

    • With the Advertising Generator, SCM controls the success of the advert. In addition, the databank is linked to budgeting systems. The staff in charge can therefore check at all times how much of the advertising budget has already been used for which adverts. Without the Advertising Generator, this monitoring process was so time-consuming that spot checks were only carried out a few days a year. Typically, this led to unexpectedly high costs at the end of the year, so that it was difficult to keep to the budget.


    5. Extension of the customer base

    Up to now the specialist dealers have been able to serve two customer segments, namely large companies and private customers. Small to medium-sized companies did not number amongst the well served customers, but it is estimated that they account for 30% of the market potential. SCM now also has products for SMEs in its range. The needs of these customers are very varied. The market is therefore difficult to handle. Peter Herrman is convinced that the specialist dealers know this market very well. They understand the needs of the SMEs in their region and also know their willingness to pay. They also have the knowledge to offer these customers a good service.

    SCM has therefore added another function to the Advertising Generator, namely direct mailing. The specialist dealers have a good 420,000 business addresses at their disposal in this function. They are subdivided into regions, so that each specialist dealer can access current business addresses from their catchment area. The direct mailing function allows them to create a letter with invitations to road shows, tips and tricks for the commercial application of mobile data services and special offers. They can have the letter professionally produced and sent just as simply and quickly as the advert. They record the reactions of their customers in the Advertising Generator. This allows SCM to improve its methods for providing the right offers for the right customers from one time to the next. The offers can be used by the specialist dealer as a model for new mailings.


    Benefits for the specialised dealersBenefits for Swisscom Mobile
    More effective choice of mediaMore effective choice of media
    Virtual campaigns
    • Higher contributions by Swisscom Mobile
    • Local coverage with nationwide significance
    		Virtual campaigns
    • Higher contributions by product manufacturers
    • Spontaneous, nationwide campaigns
    • Fast reaction to new offers and to new demand
    Lower costs due to automationLower costs due to automation
    Lower costs due to central production
    Lower media costs due to bundlingLower media costs due to bundling
    Shorter throughput timesShorter throughput times
    Professional advertisingFast implementation of layout standards

    		Fast placement of new offers

    		Better control of costs
    New customersNew customers
    Access to business addressesIncreased dealer loyalty

    Fig. 3: Summary of the advantages of the Advertising Generator


    6. Increased loyalty of specialist dealers

    The specialist dealers are given several incentives to give priority to SCM products in their advertising and sales operations with the Advertising Generator. Their costs are also reduced and they can present a more professional image. They also have an overview of their campaigns and costs at all times in the Advertising Generator. Peter Herrmann has already concluded that the specialist dealers are becoming more loyal to SCM.

    They already account for 12 to 14% of SCM’s turnover. Peter Herrmann aims to increase their share to 25 to 30% within three years. The Advertising Generator will be instrumental in achieving this target.


    7. Conclusion

    The Advertising Generator is a strategic information system. It combines unique data with functions and a few workflows. Thus, it supports specialist dealers with advert production and it helps Swisscom Mobile to efficiently monitor and control the advertising methods of specialist dealers.

    The specialist dealers play an important role in the corporate network of Swisscom Mobile. With the Advertising Generator, Swisscom Mobile reinforces its customer service capability. The division of labour into marketing and sales between the specialist dealers and Swisscom Mobile is examplary. Specimen documents, logos, address data and the described information system are provided centrally by Swisscom Mobile. Thus, a specialist dealer can also operate a professional marketing system with four employees and they can continue to cultivate their personal relationships with customers. They know the faces behind the abstract data and can approach people directly. This means they can offer good advice and good service.



    [1] This case study is based on interviews with Peter Herrmann and Olivier Telschow between 6 and 31 August 2003.
    [2] The placement costs for advertising media are maintained by Publimedia and forwarded to the database.
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