Professional Services

PROBLEM

The oldest, largest, and most well respected provider of management outsourcing services to the nonprofit association market faced a critical juncture when the Internet emerged as a crucial business tool in the mid 1990’s. The company’s needed to understand what products and services to create and sell, and how to link those products and services together to achieve the best cross sell and overall ROI.

SOLUTION

The solution required an evaluation of the company’s core value message and a determination of how that value could be packaged, modified or augmented for delivery over the Internet. The company provided a wide range of basic clerical services to their clientele of professional societies, trade associations, and technology user groups, augmented by substantial capabilities in producing conferences and trade shows. Any solution to the problem would have to provide additional value to clients without diminishing existing sources of revenue. The solution took the form of a new business unit focused on creating web based software products coupled with an extensive service package that would leverage the company’s current model of outsourced services, and add a new element of recurring product hosting revenue through the development of specific web based applications.

IMPLEMENTATION

The new business unit developed a set of web based software products and a comprehensive web site management service. Initially, it was not clear whether the company would focus on products or services.
Through market experiments it became clear that software products could be used as leaders to draw in customers to the actual profit engine provided by the web site management services. Initial ROI of software products was negative, but when measured in terms of their contribution to customer lock-in and retention, the ROI turned strongly positive.

BUSINESS IMPACT

In its third year of operation the new business unit served seventy-five clients and provided an operating ROI twice the corporate average. The web based software products gave the company a competitive advantage by increasing client lock-in and providing a package of tailored products unavailable from any competitors.