The case presented by the BTM competition describes the situation of Ultrabrand, a high-end company that works in the creation of branded website design for companies in North America. Four years after the creation of his company, the CEO, Mr. Ward-Williams registers a net income of ninety-five thousand dollars. Thanks to his great reputation and product delivery, he can afford to sell his services six to seven times higher than his competitors. In fact, Ultrabrand is offering its services in 5 related areas of digital branding:
Web analytics and reporting solutions
Software and app development
And Voiceover services
The problem is that 50 per cent of its customers consider that web analytics plays a major role in their strategic decision-making. Some of them have already complained about the limitations in the features of this aspect provided through Google Analytics. It is actually their biggest weakness, as it can shortly put barriers in acquiring new customers.
Most of them believe that Google Analytics is:
Very difficult to use and interpret
Overwhelming user interface
Don’t have time or the know-how to use it properly to gain actionable insights
If they want to stay among the best, Ultrabrand has no choice but to improve this lackluster. It’s estimated that each time a customer turned them down, it potentially represents fifteen thousand dollars less in revenue. In addition, his biggest client Xu-Dermatology has already begun to take steps to find another supplier to revamp its website in the near future.
By that means, we need to take make a serious decision.
Analysis of key issues
The second part of this case is about the web analytics. As we can read in the case, it is the most important key of service offer for Ultrabrand. Effectively, the service can be used to modify all the structure and the content of the businesses’ website to help them to achieve their marketing purpose. More, the web analytics can also help to maximize the efficiency and impact of their website.
Then, the web analytics can give a competitive advantage in terms of consumer behavior. In fact, this advantage is particularly important for e-commerce used by more and more enterprise. Because the future generation go through this kind of sales, the best structure can help to increase market part and reporting capabilities that can provide major insights.
Then, the Key Performance Indicator, a type of performance measurement, evaluates the success of an enterprise or a particular activity in which it engages. As we can see in the case, there are some points to evaluate on what we can calculate and compare. They are:
The conversion rate
The number of visitors
The traffic sources
The cost analysis
Finally, as reported in the presentation case, by Forrester, 84 per cent of American businesses are using some form of web analytics as a major component of their online marketing.
Analysis of proposed solutions
This case study allows us to choose between three options each of which has interesting elements. Our major challenge is to choose the one that best suits the company’s financial situation, his business practices and actual challenges. Before making a decision on the best solution, let’s start with the advantages and disadvantages of each one.
Inspectlet White label:
Used by some of the most popular website in the world
Represent a great cost/revenue ratio on the short term
Under 2 years
No annual subscription required
Offers a complete service support
Monthly fee as long as using the software
Not owner of the software code (dependence)
General solution may require changes in business practices
Custom-made solution (Whitecap):
90 per cent of customer retention
Easy user interface
Custom build to fit Ultrabrand’s needs
Would allow Ultrabrand to compete in crowded marketplaces
The code of the solution is own 100 per cent by Ultrabrand
Whitecap offer 24/7 coverage for clients
Deployment will take time (requirements analysis + design)
Obligation to pay $12,000 in consultation
Custom build software : $50,000
Total cost of $62,000 represent 65% of the company net income
BI Analyst hire:
The option of hiring a BI analyst is a solution that allows Ultrabrand to keep his actual service offer intact, so it does not have to change what the current customers already have. That means they can focus on acquiring prospects and work with their actual clients who requested a much more to have more information about the behavior of their clients. Having a BI analyst would counter the reprimanded sides of google analytics described earlier. Customers would also have a personalized service based on their needs and customized dashboard for easy understanding. The consultant service can eventually open paths to several new and reoccurring revenue stream.
The negative side of this choice is that on the very short term, it will be difficult to integrate the new BI analyst and agree on a common way of working. First, we must recruit and fit the best practices of each. It would not be surprising if this process takes at a couple of months to be very effective. We need to remember that meanwhile, Xu-Dermatology has received a six-week commitment offer with another BI analyst. We could have the grass cut under the feet. In addition, there may be a bad agreement between the parties, which would not happen with the two other solutions. Potential incomes are the least interesting of the three choices, so this option will not be considered for the Ultrabrand case.
The solution is financing the mid to long term solution (Whitecap) with the short term solution (Inspectlet). First, let’s see the payback period:
Total Cost : $1, 495 / month
Potential Revenue Stream : 50 clients x $100 / month each
Payback period : 1495 / (50*100) = 0.3 month (less than 1 month)
Total Cost : $12000 consulting fee + $50000 development cost
Potential Revenue Stream : 30 clients x $200 / month each
Payback period : 62000 / (30*200) = 10.33 months (11 months)
Implementation and Action Planning
First, Ultrabrand will use Inspectlet for the first year because it will generate approximately $36000 of revenue. Then, after one year, begin the process with Whitecap. The first step is the consulting phase that cost $12000 and that analyzes Ultrabrand needs. While doing this phase Ultrabrand will continue using Inspectlet because it generates revenue of $3000 each month and its financing the payment of the Whitecap option. Secondly, if the consulting phase is positive, Ultrabrand will pay the $50000 for the custom build software solution. Finally, after Whitecap solution is delivered, Ultrabrand will stop Inspectlet service without any penalty fee.
This hybrid solution offers the following advantages :
Quick implementation that may retain Xu-Dermatology
Bolstering the company’s main lackluster (web analytics)
Ultrabrand can generate quick working capital, so they can cover the consultant costs of the custom-made solution
No annual subscription required
Take advantage of the growing trend of web analytics
Offer a web analytics solution that fits client needs
Easy user interface
Increase company valuations as an asset when it comes to sell
Generate the best revenue on the mid and long term over the other solution
Would allow Ultrabrand to keep his leading position
With all these advantages, it is not a choice for Ultrabrand to no use web analytics. Furthermore, approximately, 50% of Ultrabrand’s clients indicated that they wanted web analytics. Not using web analytics can cause the loss of a big client : Xu-Dermatology. Each loss of a potential client represents more than 10% of Ultrabrand’s yearly revenues.
However the choice of a hybrid solution has his downfall. First, if the Whitecap option fail, it will generate less profit in the mid to long term. Furthermore, Ultrabrand will have to pay the $12000 in consulting even if they are not implementing the solution.
Despite these threads our solution will make opportunities for Ultrabrand. Starting with the option to compete in new crowded marketplaces. Also because Whitecap option adds an asset to Ultrabrand if Ward-William decide to sell it is value will be higher. Also, financing the most expensive solution (Whitecap) with another option (Inspectlet) will generate cash flow and not alter the company’s banking situation. If Ultrabrand is going forward with our solution, it will be able to increase his branding as keep a leading position in the market.
As you can see, the hybrid solution is by far superior to choosing just one solution. For example, if you choose only to hire a BI Analyst, you will have to pay for his training and it will take time to find the candidate that best fit Ultrabrand needs. This option is the less profitable of the 3 options in the short, medium and long term. Secondly, choosing only Inspectlet will give you immediate cash flow but this option won’t pay much in the mid to long term because Ultrabrand will always have a monthly fee of $1495 to pay each month. Finally, the Whitecap solution represents an investment of more than 56% of Ultrabrand net income. This option could undermine the sustainability and viability of Ultrabrand.
Ultrabrand situation in regard of web analytics is crying. Is not an option for them to do nothing about it because it could threaten the company’s existence. Then choosing only one option is not optimal because each option has its strength and weakness. In order to succeed in this evolving market, Ultrabrand must react quickly and keep his options open. This is why the hybrid solution is better : because it’s reducing the weakness of each option and combining the strength of them. Also, the immediate cash-flow generated by Inspectlet allow Ultrabrand to adapt to the market condition. Finally, web analytics can serve all function in an enterprise because it helps create a profile of customers that indicates where each function should put his effort.