Media Advertising Sales Acquisition Cost Reduction Using Lean Principles and Non-technology Improvement

Case Studies Media Services
Digital Media Publishing – Media Sales Transformation
A Top 5 Global Media Sales and Marketing Groups

Case Study: Media Advertising Sales Acquisition Cost Reduction Using Lean Principles and Non-technology Improvement

North America

How to Reduce Customer Acquisition Cost While Improving Advertising Effectiveness

The news publisher’s lucrative print advertising sales were withering. Lower margin digital media ads were replacing newsprint. Simple cost cutting was insufficient. Core transformation of the entire business had to deliver a viable, lean enterprise. The ideal starting point: the current advertising sales management process. Its sky-high customer acquisition cost was bleeding cash. But success required an end-to-end overhaul.

It had to begin with lean product development and marketing operations. And these efforts had to dovetail with a lean sales initiative in digital advertising. Instead, the company’s internal operations consulting teams slowly toiled at narrow, one-off, continuous improvement efforts—no end-to-end coordination. Progress was painfully slow.

Project Sponsor:

Senior Vice President, Process Improvement

Non-technology, self-funding operational
improvement implementation:

– No new technology
– End-to-end advertising operations
– 6-month implementation

Client Description, Project Scope, Objectives – How to Implement Lean Sales Process Management

Management concluded that The Lab’s non-technology process improvement templates offered acceleration. In one fell swoop, they could implement an end-to-end, lean, sales management process, including sales metrics designed to increase productivity. They launched an effort across the sales and marketing organizations. It quickly expanded to every aspect of operations, including the printing plants and distribution network.

A division of a larger parent, the company publishes multiple newspapers, including one of the world’s most prestigious. Other divisions include broadcast media, where The Lab’s template-based advantage was first introduced to the company.

The first project began with a 6-week Phase I analysis of 900 sales and marketing employees. This delivered a self-funding, guaranteed, Phase II implementation work plan. All improvements were implemented within 6 months.

Project Objectives:

– Increased sales uptime
– Customer profitability gains
– Service improvement

Project Scope:

– Sales
– Marketing
– Product development
– Customer support

Representative Lean Advertising Improvement Examples

The Lab implemented 400 non-technology process improvement opportunities. Examples:

Reduced Customer Over-service — The sales group segmented customers by industry, e.g., department stores, autos. The Lab re-segmented customers based on the level of service they required, regardless of industry. This delivered cost reduction by reducing customer over-service. It also enabled a lean marketing approach that delivered a 40 percent lower customer acquisition cost.

Increased Salesforce Uptime — Sales reps spent less than 25 percent of their time in sales meetings (uptime). The Lab documented the marketing and sales processes and reduced two-thirds of the activities that generated multiple types of lean waste: idle time, over-work and more. Sales uptime rose to 40 percent and conversion rates doubled.

Improved Product Development — Senior executives misinterpreted their customers’ priorities. Products were developed for customers’ lowest priority needs. The Lab helped refocus on advertising effectiveness, the customers’ top priority. New product features helped customers measure effectiveness and adjust campaigns. Lean process improvement cut development cycle time by one-third.

Implementation Results:

  • Operating cost 15%
  • Sales uptime 60%
  • Customer acquisition cost 40%
  • Errors/exceptions 30%
  • Break even point 4 mos.
  • ROI (12 month) 3x