Specsavers an integrated marketing business model Specsavers Optical Group has grown into the fifth biggest optical retailer worldwide through clear, consistent, and simple business model, which encourages Integrated Marketing. Honesty and motivation drives organisation success. Angus Jenkinson Professor of Integrated Marketing Luton Business School angus.jenkinson@luton.ac.uk Branko Sain Research Fellow in Integrated Marketing The Centre for Integrated Marketing has been funded by industry to research best practice and develop intellectual and other tools on behalf of leading marketers and their agencies.
Contents Highlights 3 Integrated Marketing learning points 3 The story 3 Cutting through 4 Honesty and motivation 4 Partnership 5 The power of values 5 Clarity, consistency, simplicity 6 The value of communications 6 Success 7 Executive takeaway 7 Notes 8 Integrated Marketing is an holistic discipline that inspires coherent and creative organisation, culture and brand alignment around fundamental truths of the brand to deliver value to customers, employees and the organisation. Permission is given for this paper to be copied, forwarded, distributed or quoted from provided that the authorship is acknowledged. Centre for Integrated Marketing, University of Luton 21/02/2003 Page 2
Highlights Opticians have historically been either independent or worked in small chains. Only a few have achieved national coverage. The Specsavers business solution enables professionals to enjoy professional and business ownership with national Integrated Marketing strategies. During 2002, the group reached 605 joint venture partners that run 428 stores in three countries. The sales reached 430 million, a 12% increase on the previous year. Integrated Marketing learning points 1. It doesn't matter in which channel or country the customer shops; it is one brand adjusting to the local context. 2. The brand experience is consistently of service or value. 3. The brand provides value that no competitor offers. 4. All parts of the brand service (including products and services, advertising and packaging, availability, sales and service) work together. 5. Marketing/business objectives balance stakeholder needs. 6. The values expressed in the brand are the same as people experience in the company culture. 7. Objectives are coherent with the brand/company s competence. 8. The company acts on the belief that the motivation of people is a major asset. 9. The C-level team works well together. 10. Each and every business process is actively aligned to the brand value promise. 11. Leaders Are experts in their field Have a win-win attitude Select new members of the organisation carefully Reward good results 12. The company and its agencies work together in partnership. 13. Communication planning initially gives primacy to discipline neutral or common currency objectives (such as customer/market equity) over the discipline/media related means to achieve them (such as awareness or response). 14. All parties/agencies contribute ideas/solutions to the same brief at the outset of each major communication project. 15. Evaluation of all communication routinely connects both attitudinal and customer response effects. 16. There is an effective capability to measure return on customer investment. 17. There is a genuine effort to achieve 3D-Worth: balanced benefits for customers, employees/partners, and the organisation. The story Doug and Mary Perkins are a couple of far-sighted optometrists who seized the opportunity to change the optical care industry after its deregulation in 1983. At that time the patients had very little confidence in optical care and many opticians were dissatisfied with their jobs. They wanted a closer involvement in the Doug and Mary Perkins Centre for Integrated Marketing, University of Luton 21/02/2003 Page 3
ownership and management of their practices and the new act gave them the chance to realise this dream. But often they did not have sufficient resources or business knowledge to do it successfully. Perkins brought the world of entrepreneurship closer to these people by establishing the Specsavers Optical Group. The idea introduced two main innovations in the optical care industry: the joint venture model and the retail service concepts. In Specsavers model each practice is an independent business owned jointly by Specsavers and the practitioner. Specsavers offers training, support services, experience, expertise, information and promotion, whereas the practitioner is responsible for delivering professional eyecare and for the day-today running of the business. 1 Today the Specsavers Optical Group consists of over 600 joint venture partners that run more than 420 outlets across the UK, Republic of Ireland and the Netherlands with a combined turnover of 430 million. The mission of Specsavers is to be the best value opticians satisfying personal eyecare needs at affordable prices clearly, simply and consistently. This is reflected in the marketing/company culture: clarity, consistency and simplicity. 2 Mission Statement: Specsavers - the best value opticians satisfying personal eyecare needs at affordable prices clearly, simply and consistently. Cutting through The brand provides value that no competitor offers. The considerable size of the group allows the partners to benefit from competitive sourcing and to achieve economies of scale, which translate into consistently lower prices for the patients/consumers. The brand promise is to offer professional quality at lower prices. The other aspects of the value proposition include product range and quality retail service. Independent opticians that offer very high quality service represent about 50% of the market. Our aim is to match the independent opticians on service and professionalism and beat them on price, said Andrew Molle, Marketing Director of Specsavers Optical Group. Our aim is to match the independent opticians on service and professionalism and beat them on price. Andrew Molle, Marketing Director, Specsavers Optical Group. Honesty and motivation The Specsavers joint venture model is achieving some significant principles of Integrated Marketing, like the consistency of the brand experience, the motivation of people, and the partnership approach to working together internally and externally. A consistent brand experience is achieved through the integration of local and national marketing initiatives. All customer Touchpoints are considered in order to define the brand. Consistency of professional and service experience is ensured by rigorous recruitment and training policies and processes, which are subject to continuous monitoring and review. The product quality and consistently low prices are based on a combination of competitive sourcing and 2 joint venture manufacturing laboratories, Airways Optical and Vision Labs. The group recently invested also in a new computerised warehouse management and frame picking system in Guernsey that streamlined the process of shipping more than 80,000 frames per week to its retail stores. 3 The motivation of people is at the heart of Specsavers success. The group is a community of independent professionals that work both for themselves and for Living the Specsavers brand Motivation of people is at the heart of Specsavers success Centre for Integrated Marketing, University of Luton 21/02/2003 Page 4
the others: the practitioner and the Specsavers share the profits, for example. Specsavers distributes bonuses and invests in technological innovation and professional development for the benefit of all partners. Practitioners are motivated because they profit directly from the success of their practice and simultaneously contribute to the community (group). The ideal of practitioners owning and running practices is combined with sound business management: 1 Each practice plan is exhaustively assessed to ensure minimum risk to partners. Business and marketing specialists are available at Specsavers for consultation and advice. Regional meetings are held regularly to ensure effective communication. Specialist support is available for many different aspects of optical practice management and professional development. Specsavers Opticians is a company with a strong learning focus. Practitioners are required to offer professional care and honest advice, above anything else. 2 Specsavers has a strong learning culture Partnership The group regards the agencies and the practitioners as partners and actively seeks to achieve mutual benefits. The agencies, for example, work together on the same brief that is based on media neutral objectives and have the opportunity to contribute considerably to the planning and execution of Specsavers communications. Practitioners, on the other side, benefit from professional help, advice and assistance that the group offers to its associates. Business and support services that the group offers to its partners include 1 : Business planning, development and operational guidance Recruitment Staff and management training Professional development Legal and financial planning and administration Banking and accounting services Premium rate stock and equipment purchasing Local and national marketing and public relations State-of-the-art retail systems and technology Specsavers focus on people and its commitment to continuing professional development (CPD) involves management, partners and staff. It includes Specsavers Optical and Retailing Training (SORT) scheme for new and existing staff and Professional Advancement Committee (PAC), run by the partners. The Specsavers group has its own training facility, the Specsavers Academy, and organises two major national conferences for staff and an annual clinical conference for professionals. The power of values Integrated Marketing leaders must communicate and live by values that are consistent with the values of the brand/organisation. These must also be the Press advert Centre for Integrated Marketing, University of Luton 21/02/2003 Page 5
values of those involved in the organisation both externally and internally (i.e. customers and partners/employees). Specsavers recruits people that understand and share the values of clarity, consistency and simplicity, which define the Specsavers brand. Every part of the business is aligned to these values. Every Touchpoint communicates these values (i.e. consistent and professional service, consistent shop design, convenient location, clear prices, honest advice, keeping on promises). Clarity, consistency, simplicity The original business idea that gave birth to the Specsavers group was clear, simple, and consistent. It was consistent with the industry situation and with the expertise of Doug and Mary Perkins. This set of values was a powerful reference for the C-level team and for the practitioners, and led the group to its present success. Every business process displays a refracted image of these values, from the shop experience to reward and promotion schemes. The value of communications Specsavers communication takes into account that people buy glasses from necessity. In most cases they want a professional rather than sales relationship with the optician. Older people need to update their glasses more often and form a distinct customer community. Similarly, the contact lenses users need to contact the optician more frequently to renew their prescriptions. Communication planning is based on business objectives and goes beyond discipline/media related means to achieve them. Marketing communications plans originate from an in-house creative agency that works in partnership with mainly two media agencies and one market research agency. Specsavers is increasingly trying to use a mix of different media for their advertising. Last year it spent only 56% of its 18 million advertising budget on TV 4, giving greater prominence to mail media, the Internet and local press. Press advert The promise of quality at a lower price Mail media and the Internet are very suitable for the marketing of contact lenses. 2 With its new e-commerce platform, opticians collect information about their customers and directly communicate with them on-line. The interactive nature of the channel allows opticians even to validate the prescriptions, when required. Both channels work well and the group distributes more than 250,000 packs of contact lenses each quarter. The local press gets around 21% of the advertising budget and it is used to support national advertising campaigns on TV, national press and radio. A study commissioned by The Newspaper Society attributes a 27% of awareness to the local press. 9% of awareness of Specsavers advertising was via local press only. 4 Specsavers marketing vision is that communication goes beyond traditional media (i.e. TV, press) and includes all Touchpoints that contribute to define the brand, including the store experience. A great deal of attention is paid on details that define the shop experience and are consistent with the values of clarity, simplicity and consistency. Reality media are widely used to convey messages about the brand/organisation. 5 Attention for the details of a Specsavers Optician Outlet Centre for Integrated Marketing, University of Luton 21/02/2003 Page 6
The group has a continuous dialogue with its customers and carries out extensive research about customer service and satisfaction. All information is fed back to the regional management teams and to the partners who are jointly responsible for planning and executing any initiative to improve customer service. Success At the end of 2001 Specsavers Optical Group recorded the following results: 6 Market leader in the UK with 27% market share (more than double that of nearest competitor). The brand was market leader also in the Republic of Ireland and number 3 in the Netherlands. Sales 430 million 12% sales increase on previous year 428 stores in 3 countries 605 joint venture partners Average turnover per store of 1.075 million 53 million partner profits and bonuses distributed Top five optical retailer worldwide More than 16 million customers 7 9000 staff employed 300 staff in business support service 1 pair of glasses sold every 6 seconds About 30 new products in stores each month (1 a day!) Group Turnover m Executive takeaway Number of Stores Integrated Marketing is an holistic discipline that inspires coherent and creative organisation, culture and brand alignment around fundamental truths of the brand to deliver value to customers, employees and the organisation. Specsavers Opticians shows evidence of achieving many aspects of Integrated Marketing. The most prominent learning from this case suggests the following actions to senior marketing executives: 1. There must an emphasis 3D worthwiliness: balanced benefits for customers, employees/partners, and the organisation. 2. The brand must provide value that no competitor offers and that the organisation communicates it clearly to everyone involved, internally and externally. 3. All parts of the brand service work together. The brand experience must be consistently of relevant value and service. All aspects of the business are designed around delivering the brand value promise. 4. There is a coherent set of values that the leaders transmit through the organisation. The brand appeals to people who have affinity with the values of the organisation. 5. Good leaders will motivate people, which is fundamental to success. 6. All parties work in partnership on objectives that are coherent with company s competence. 7. All agencies work on the same brief and contribute to it. 8. Communication objectives are media neutral and reflect business objectives. Press advert for older customers Centre for Integrated Marketing, University of Luton 21/02/2003 Page 7
9. There is a constant dialogue with the customers whose return on investment is effectively measured. Notes 1 Specsavers website (www.specsavers.co.uk) 2 Andrew Molle, Marketing Director, Specsavers Optical Group 3 Specsavers Place Handfree Operation in The Frame Symbol Technologies Case Study 4 AC Nielsen-MMS in Local Press Works by Newspapers society 5 Phil Woolley, Retail Design Manager, Specsavers Opticians in Spectacular Lighting by Lighting Enterprises Consultancy available from www.designadvice.co.uk 6 Specsavers Opticians Annual Report 2001/2002 and Specsavers website 7 GfK Home Audit Centre for Integrated Marketing, University of Luton 21/02/2003 Page 8