Turning Santa More Agile

What Happened to Santa When We Made Him More Customer Centric?

Earlier this year we were asked by Santa Claus to help with their customer experience (CX). Santa told us that customer satisfaction levels had been declining for the last few decades. They wanted to know why and how they could fix it.

“Santa Claus is a vertically-integrated unidirectionally-anonymised contextual gift-giving facilitator”

What is Santa Claus?

For those of you not familiar with the business, Santa Claus (or Father Christmas) is essentially a vertically-integrated unidirectionally-anonymised (parent – child or p-c) contextual gift-giving facilitation and logistics service.

It is also a classic two-sided market like Trademe, Ebay or Tinder. In this case, the two sides are parents and children.

Santa’s Why

We conducted an innovation workshop with Santa Claus. During the workshop the team determined that the key customer painpoint was a mismatch between parent and child gift expectations. We recognised that if we could solve that, Santa could again dominate the anonymised gift giving market.

While Santa has been business for many years, it seemed to have lost its sense of purpose. We agreed that the purpose should be:

Santa Claus maintains and strengthens the bonds between its two key customer groups through through value-appropriate gift selection and delivery and anonymity-centric affection services.

What we Found

We sent out a questionnaire to a sample of customers. We found that satisfaction was indeed low, with negative Net Promoter Scores. We dug into this and found that the NPS scores were low for both groups (parents and children).

We asked some follow up questions and what we found was striking:

  • Children loved the anticipation of receiving presents and bought into the whole “Santa Claus” narrative (clearly the anonymisation was working well).
  • All the gifts were delivered on time (which is a big tick for Santa’s automated logistical infrastructure).
  • Children were often disappointed with the quality of the gifts or the gifts were not what they were expecting.
  • Correspondingly, parents were often upset that their children weren’t happy with their presents (the gifts are, of course funded by the parents, but delivered through the anonymised Santa service).

What We Did

While it was clear that the logistical performance of Santa Claus was superb, Customer Expectations were still not being met (a great example of a business optimising the wrong thing)

Starting this holiday season we have implemented the following:

  • An automated gift-preference and recommendation system that allows parents to pre-select types and price bands of acceptable gifts and children to choose specific gifts within those criteria. This simple system aligns parent and child expectations, and reduces disappointment. Cleverly, this technology is integrated into the traditional Santa letter writing software.
  • A comprehensive multi-channel communication system, involving Social media, EDM, mobile, as well as the more traditional letter writing
  • Simple, consistent messaging that focuses, not on the monetary value of the gift, but the sense of “belonging” that such an anonymised service can provide.
  • A/B testing of messages to find out what messages were most likely to align expectations of both groups.
  • An education programme for children focusing on the theme “It’s the thought that counts” – a phrase that resonates particularly well with parents.

We have tested and measured each element of this strategy, adjusting where necessary.

While we expect there will be a short-term increase in cost, as a result of the more-intensive communication, this will be more than offset by the reduction in head count in the complaints department. This, we believe, will lead to happier elves (employee engagement is an important predictor of success in a business).

Outcomes

We’re treating this approach as an MVP, and locking in prioritised incremental improvements.

It’s early days, but already we are seeing an upward shift in NPS. In follow-up interviews, some children have stated that they are more appreciative of Santa Claus, with some even noting that they feel more loved by the anonymised service. More importantly, engagement with the letter-writing software has increase by 43%.

Happier Elves

Santa Claus has been delighted with the results so far, and has asked us to continue the work into the New Year.
We are looking forward to receiving our own presents.

Happy Christmas!

Contact us on hello@digile.io