ecoatm has hit speedbumps - uw tacoma · 2014-05-12 · outerwall’s recent acquisition of ecoatm...

Outerwall: Building a better tomorrow, today

Rush Hour 4: Ravi Bhatt, Jackie Chen, Murali Joshi, Kevin Kou

MICSSR Case Competition: February 28, 2014

Analysis Impact ecoReps Cross-brand Referral

Outerwall’s recent acquisition of ecoATM has hit speedbumps

Outerwall situation: consistent revenue growth of 22%, total units ~63,900

Coinstar Redbox

ecoATM

Negative press from perceived security issues

$291M revenue from 20,000 units

$60M from 900 units

$1.9B from 43,000 units


What is Outerwall’s intended impact across its 4 pillars of CSR?

Incubator of Innovation

Partner in our Communities

Steward of the Environment

Exceptional Place to Work

State-of-the-art security

technology

Support local charities with in-kind donations

Reducing greenhouse

emissions

“Wellness Matters Reimbursement”

program

Our recommendations aimed at improving each pillar while ensuring sustainability of business ventures moving forward


3 ways to generate future impact based on Outerwall’s 4 pillars of CSR

Improve security technology

Focus on finding more customers

Invest in internal efficiencies

Technology costly to install, retrofit, and

maintain

Legislature & law enforcement support

not certain

Can’t deter thieves completely

Draws unnecessary attention to issue

Facial recognition or other technologies

Doing as best we can to cooperate

currently






Technology costly to install, retrofit, and

maintain

Legislature & law enforcement support

not certain

Can’t deter thieves completely

Draws unnecessary attention to issue

Facial recognition or other technologies

Doing as best we can to cooperate

currently

Long term costs outweigh short term benefits

Better to personalize & streamline recovery process






2012 CSR Report

Environmentally Socially

LED lights, air exchangers activity timers, solar panels

Employee volunteerism Charitable/matched giving

“Outside the Box”






2012 CSR Report

Environmentally Socially

LED lights, air exchangers activity timers, solar panels

Employee volunteerism Charitable/matched giving

“Outside the Box”

2015 plan already in action, further efforts will generate

marginal impact






More people = more phones = greater CSR returns & profitability

Cannot upsell previous customers, need new phones from new customers

No plan of exposure/outreach

Large demand for secondary/refurbished phones

worldwide ($4.6 billion)

Value Proposition

How can Outerwall use ecoATM to sustainably grow its triple bottomline and solidify its reputation?

Establish ecoReps

Key Question:

Obstacles:

Recommen-dations:

Impact

Undefined methods for user acquisition

Negative perception & reputation from ecoATM

Encourage referrals

Promotions across brands

Increase customer base by 31% and recycle an additional 55,000 pounds of waste by 2016

1. Analysis

2. ecoReps 3. Cross-brand Promotions 4. Word of Mouth Referrals 5. Impact

How can Outerwall use ecoATM to sustainably grow its triple bottomline and

solidify its reputation?

Analysis Impact ecoReps Referral Cross-brand

ecoReps’s immediate duties are to streamline recovery process for wronged parties

Improving security technology does not have biggest impact

Current Issues

Lack of personalized attention on local level

Improve local customer service

Our Solution

Liaison to law enforcement

In person consultant to help wronged parties


ecoReps are community points of contact with two key roles

1 Serve as point of contact for victims when phone is stolen

2 Connection to police to speed up process of retrieving phone

3 Educates community on phone theft prevention and recycling benefits

4 Find new customers markets for ecoATM to enter and host innovative events

Streamline theft resolution

Market to different consumers

Shawn Crawford


ecoReps are community points of contact with two key roles

1 Serve as point of contact for victims when phone is stolen

2 Connection to police to speed up process of retrieving phone

3 Educates community on phone theft prevention and recycling benefits

4 Find new customers and market for ecoATM to enter

Streamline victim resolution

Market to different consumers Average of 15 ecoATMs per representative per region

Shawn Crawford


CSR social impact achieved through representatives are threefold

Exceptional place to work

Partner in our communities

Well-trained and community-based employees

Gives field experience

Provides more job opportunities

Be an active member in community

Community outreach


Pillars Affected

Outerwall Goals

CSR Social Impact

1. Analysis 2. ecoReps

3. Cross-brand Promotions 4. Word of Mouth Referrals 5. Impact




Outerwall can leverage existing brands to expand ecoATM customer base

Helps drive customers to use ecoATM

Promote ecoATM by providing promotional options to Redbox and Coinstar

Cross-brand promotion bridges Outerwall brands.


Redbox users incentivized to use ecoATMs

More customers driven to use ecoATM due to Redbox benefits

Active advertising

Receipt advertising


ecoATM users incentivized to begin using Redbox

Customers see Outerwall as a charitable organization

ecoATM users drawn to using Redbox

Charities receive donations from users

Customers receive promotional code for

Redbox upon donating to charity of choice

1. Analysis 2. ecoReps 3. Cross-brand Promotions

4. Word of Mouth Referrals 5. Impact




Referral system incentivizes word of mouth to attract customers

Rewards customers for referrals and for being eco-friendly

$10 1 Customer receives code through

email to share with friends

2 Upon entering code and phone,

both parties receive cash amount

Referral Process Sample Email Coupon


CSR environmental impact from promotions and referrals are twofold

Steward of Environment Partner in our communities Pillars Affected

Outerwall Goals

CSR Environmental

Impact

Foster culture of e-recycling

Increases impact by recycling more phones

Community reduces e-waste together

1. Analysis 2. ecoReps 3. Cross-brand Promotions 4. Word of Mouth Referrals

5. Impact



Implementation timeline

2014 2015 2016

Identify regions, train ecoReps

Minor programming

updates Key Factors to Consider

• Finding more nonprofit partners to aid

• Entry into new geographies/regions

• Potential future acquisitions to promote

ecoReps initiative

Cross-brand Promotions

Referral System

Minor programming

updates

Reevaluate

Address police

concerns

Educate customers, market to community

Connect new kiosks to other brands


Cross-brand ecoReps Referral

Recommendations have a significant CSR impact & financial benefits

Implementation Costs: $14M Increase in Revenue: $68M

Engage with 610,000 community members

Recycle additional

7,600 lbs of waste

Increase employee community engagement

by 92,000 hours

Engage with 6.1M community members

Recycle additional

39,000 lbs of waste

Recycle additional

8,800 lbs of waste

Engage with 704,000 community members


Projected CSR impact aligns with core values


Partner in our Communities

Steward of the Environment

Exceptional Place to Work

31% increase in customers

Engage with 6.8M community

members

Recycle 55,000 pounds of waste

Increase community participation by

92,000 hours

Value Proposition

How can Outerwall use ecoATM to sustainably grow its triple bottomline and solidify its reputation?

Increase customer base by 31% and recycle an additional 55,000 pounds of waste by 2016

Establish ecoReps

Key Question:

Obstacles:

Recommen-dations:

Impact

Undefined methods for user acquisition

Negative perception & reputation from ecoATM

Encourage referrals

Promotions across brands

Outerwall: Building a better tomorrow, today

Rush Hour 4: Ravi Bhatt, Jackie Chen, Murali Joshi, Kevin Kou

MICSSR Case Competition: February 28, 2014

Table of Contents

Presentation Situational Analysis Possible Paths Considered Value Proposition ecoReps Case Study: ecoReps ecoReps – CSR Impact Crossbrand – Existing Users Crossbrand – New Users Referral – Word of Mouth Referral – CSR Impact Implementation Timeline CSR and Financial Impact Four Values & Pillars

Appendix General Why we shouldn’t change ATM structure or efficiencies Consumers' perspective day to day Prioritizing our recommendations State Regulation, Legislations, and Banning What are the CSR impact that from your strategy? Risks, Mitigations, & Contigencies

ecoReps How do we address the security concern? Too many requests for the ecoReps Do ecoReps “fan the flame”?

Crossbrand How does the cross brand work for Coinstar?

Referral How does the system work?

Financials ecoReps Cross Brand Promotion Word of Mouth Referrals

Revenue/Costs Social Revenue/Costs Social Revenue/Costs Social

Risks, Mitigations, Contingencies

Pushing ecoATM negatively affects Redbox/Coinstar

Risks Mitigations Contingencies

Creating more separation between

two brands

Legislation blocking access to regions

Proactively working with Law Enforcement &

legislators through local ecoReps

Improving security technology &

encouraging “Kill Switch” legislation

Overutilization of ecoReps

Increased user traffic outweighs negative

brand image in long run

Providing densely populated regions with

flexibility in ecoRep jurisdiction

Increasing budget for specific regions

ecoRep Social Impact

Key Assumptions

• ecoReps will cover 15 ecoATMs

• 5% of people met will

become customers

• Average weight of recycled content: ¼ lb

Recycled Content

7,200 lbs

Impressions Made

610K

Community Engagement

91K hrs

ecoRep Financial Impact

Key Assumptions

• ecoRep Salary: $25,000 • Average revenue

generated per new customer: $150

Total Cost

Incremental Revenue

$1.5M

$4.5M

Cross Brand Promotion Social Impact

Key Assumptions

• 2.5% of impressions will become new customers

• ecoATMs are only around

20% of Redboxes

Impressions Made

Recycled Content

6.1M

38,500 lbs

Cross Brand Promotion Financial Impact

Key Assumptions

• Initial programming investment: $250K

• Additional maintenance/yr

kiosk: $150

Total Cost

Incremental Revenue

$6.6M

$23M

Referral Program Social Impact

Key Assumptions

• 5% of existing customers will refer new customers

• Average weight of recycled content: ¼ lb

Impressions Made

Recycled Content

704K

8,800 lbs

Referral Program Financial Impact

Key Assumptions

• Initial programming investment: $250k

• Additional maintenance/yr kiosk: $150

Total Cost

Incremental Revenue

$182K

$5.3M

Outerwall shouldn’t change structure or efficiencies

Existing structures are optimal & Several goals and targets have been met

Greenhouse Gas Emissions Strong work place incentives & programs

Distribution channel efficiencies Matching and in-kind donations

With an existing strong structure & operations, Outerwall needs to focus on attracting

consumers & external image.

Impacting the consumer: day-to-day

Consumers are now aware of ecoATMs -Strategically located outside retailers -Drawn through the environmental pull -Convenience and cash -Encouraged through their ecoReps -Heard of ecoATM’s through events

Prioritizing our recommendations

1. Creating and using ecoReps

2. Leveraging cross-brand promotions

3. Encouraging consumer referrals

We prioritized our recommendations based on several criteria: • Security concerns • Brand image • CSR Impact • Increasing more customer use of ecoATMs

*Although we have prioritized the importance of our recommendations for you, our strategy should be implemented after analyzing the current situation

State regulations, legislation, and banning

Current State Banning and Regulations are problematic for ecoATM’s expansion; however, new legislation will combat these problems.

“Kill-Switch” Legislation is expected to be passed. Several nation-wide discussions about the merits.

Render a device, useless even if is restored. This would decrease theft completely after the user loses their phone.

ecoATM wins $14.4m grant

ecoATM has generated strong support from various scientific and environmental foundations for their business

What is the detailed CSR impact of our strategy?

Greenhouse Gas Emissions Strong work place incentives & programs

Distribution channel efficiencies Matching and in-kind donations

Existing CSR Impact

Better working flexibility and jobs Focus on the social community

Environmental benefits with recycling Understanding more customers = CSR

Additional CSR Impact

Recycling = 200,000 cell phones

Waste = 55,000 lbs

22 Garbage trucks off the road

How do we address the security concern?

Biggest mistake from corporations is to “Fan the flame” or make the security concern greater than it is as consumers will be worried about an issues they never knew.

Handling security discretely

-ecoReps provide local support in investing the theft -Connect with law enforcement and represent ecoATM in the entire process -No excessive publicity of the event and damage control

Too many duties for the ecoReps?

Our strategy is to allocate ecoReps on average of 15 ecoATMs, but based on demand certain areas will have more or less allocation.

Large requests Large consumer More revenue and

CSR impact

Support, tech & legislation

Less thefts Reduced incidents

and victims

Marketing Role

Security Role

Do ecoReps make the problem worse?

Primary Role: Marketing and Awareness

Secondary Role: Theft Support & Resolution

• Keeping security concerns discrete

• Problems are isolated and rare

• Knows the locals better than anyone else

How does a cross-brand strategy work for Coinstar?

Although we focus on Redbox, Coinstar can work as well.

Encourage users to donate to charities for Redbox

incentives

Adopt various vouchers and $5 of transaction fees

waived.

How does the referral system work?

Sarah

Promotional Code

Cash

Extra Cash (A through check)

(B immediate)

Increases CSR Impact and monetary benefits through more phones

ecoatm has hit speedbumps - uw tacoma · 2014-05-12 · outerwall’s recent acquisition of ecoatm...

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