Problems that INNOVO Addresses
INNOVO addresses the issue of waste in commercial transactions. In particular, Suppliers incur significant expenditure in sales and marketing costs to find new customers. This is as a result of the simple fact that Suppliers do not know when Customers are ready to buy, which leads them to bombard potential Customers. This is expensive and inefficient, on its own. Additionally, this makes it too expensive to sell spare capacity, which goes to waste. All of these costs have to be recovered, so they are “priced-in” to all the sales that are made. Every Customer pays for this waste.
The wasted sales and marketing costs - and knock-on wasted spare capacity - are as a result of the very low response rates to sales and marketing efforts.
In addition, to the problem of waste, one of the most difficult things in business development is to try and open up a new relationship with an organisation that doesn’t know you. Decision makers are often bombarded by people trying to sell to them, even by their competition. New customer acquisition is key to all Suppliers, but conversion rates make this acquisition a challenge. From only a 1% conversion with advertising, PR, e-marketing, and exhibitions, to a 10% conversion rate with telemarketing and newsletters, acquisition is a time consuming and expensive process. Even emails, telephone calls and social media, while better, are still not so effective. All of the above to get one meeting with a potential new customer, and according to a report by the Harvard Business Review, 91% of those meeting fail to achieve success. All this translates into a very high cost to winning a customer.
As well as creating relationships, and reducing customer acquisition costs, INNOVO allows Suppliers to sell wasted spare capacity. With all the costs listed above, it can often be inefficient to sell capacity due to the costs incurred on top of the existing fixed operational costs. By making surplus capacity available on INNOVO, which is a free channel, it can easily be offered without additional cost, thereby increasing efficiency and improving margin as more fixed costs are absorbed.
INNOVO has also provided a solution to obtaining the benefits of consortium buying without the need to establish consortia.
The savings do not stop with the direct and indirect costs associated with a Supplier’s cost of sale and funding of spare capacity. By inviting its own Suppliers to join INNOVO and offer their own INNBATEs the Supplier can save an average of another 15% on its cost base.
Saving all this waste generates value not only for the Suppliers and Buyers, but also for Society, in the form of Good Causes.