After performing the root cause analysis to understand the problems faced by ElecKart, your team has decided to meet the Head of Marketing to validate whether their approach and analysis were going in the right direction or not. This is needed to be done because your consulting firm wants to dig deeper into the problem, understand its implications, and arrive at an effective solution that would help ElecKart emerge out of its current scenario.

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Apart from the budget optimisation challenge, you have analysed that the company also has a low order conversion rate because customers hardly spend time on the website and end up not shopping for anything. So, your team strikes up a conversation with the head of marketing and explains how serious the current situation is, and if this trend continues, the company will not only fail to acquire new customers but also lose the existing customers, resulting in a huge turndown. Before directly pitching the possible solutions for the problem, your team needs to build the implications and the need payoff of the problem. This would enable the company to pay heed to the unhappy customers and other underlying issues of improper stock utilisation and its overall turnover rates.

Conversation Exchange between the consulting firm(CF) and the head of marketing, ElecKart(EK)

CF: So, it sounds like the problem is that ElecKart does not have a mobile application to facilitate the sale and purchase of goods between the sellers and the customers? EK: Yes, that is correct. We are currently operating our business through the website, which is not really giving us satisfactory results due to its current design and lack of user-friendly nature.

CF: What have your customers rated your website? EK: Well, we performed a thorough analysis of our websites performance with the help of the A/B testing team, and they reported that our website is quite heavy and confusing in the sense that customers are unable to find what they are looking for.

CF: Oh, thats an alarming situation indeed. This means your customers must be quite unhappy about this. EK: Yes, they actually are unhappy. Many of them simply browse through our website and leave without shopping for anything because they are unable to locate the required products. Some of them add certain products into their cart but do not proceed further because of how complex the checkout and payment process is.

CF: So, what do you think, is the average time spent by the customers on your portal, and how much is the order conversion rate among the customers who visit and browse your website? EK: The average time spent by our customers is around 12 seconds, and out of these customers, we have experienced merely a 30% order conversion rate, which is something we are really worried about.

CF: It seems like the existing customers are churning at high rates. What does it take to acquire new customers? EK: It is quite difficult to acquire new customers because it requires a humongous investment. As you already know, ElecKart is a start-up and has just started stretching out its wings and stepping out into the competitive market. So, it would take a lot more effort to acquire new customers than retaining the existing customers by improving their satisfaction levels and catering to their requirements in the best possible manner.

CF: How do you strategise to retain the existing customers with higher churning rates? EK: Well, thats a good question Whenever we identify that an existing customer, especially a dormant account holder with just one order history, is going to churn, we offer them promo codes, cashbacks, and free deliveries so that they can get higher discounted rates than other competitors and can be encouraged to stay with us.

CF: Customers with lower conversion rates might actually be affecting your stocks and making inventory management quite difficult for you. EK: That is absolutely correct. Many of these customers add products to their carts but do not proceed any further, thereby making the products unavailable for those who need it. This adds another unhappy customer to the list.

CF: This means that your stock utilisation and management is getting highly compromised, which is leading to lower turnover rates. EK: Seems like this website is literally causing me pain in the neck, and I need to set up a technical team to develop a mobile application to boost our revenue and profits.

Based on your teams conversation with the head of marketing at ElecKart, your task is to fill the SPIN table in the template attached below. Using the transcription above as a reference, identify at least three situations, the problems, the implications, and the need-payoffs for the business.

Please download the template below to enter your response.

Whenever we identify that an existing customer, especially a dormant account holder with just one order history, is going to churn, we offer them promo codes, cashbacks, and free deliveries so that they can get higher discounted rates than other competitors and can be encouraged to stay with us.

CF: Customers with lower conversion rates might actually be affecting your stocks and making inventory management quite difficult for you. EK: That is absolutely correct. Many of these customers add products to their carts but do not proceed any further, thereby making the products unavailable for those who need it. This adds another unhappy customer to the list.

CF: This means that your stock utilisation and management is getting highly compromised, which is leading to lower turnover rates. EK: Seems like this website is literally causing me pain in the neck, and I need to set up a technical team to develop a mobile application to boost our revenue and profits.

Based on your teams conversation with the head of marketing at ElecKart, your task is to fill the SPIN table in the template attached below. Using the transcription above as a reference, identify at least three situations, the problems, the implications, and the need-payoffs for the business.

Please download the template below to enter your response.

Situation Low order conversion rate Problem Higher number of products lying in the cart because of lower order conversion rate O Implication Keed-Pavoff Certain items are reflected as out of stock, which adds another unhappy More order conversion places the company in a better position to bargain customer to the list with suppliers for better profit margins