Objectives of knowledge management

Q. Could you give some examples of where you applied new ways of applying 
the mix online?
Roberto Hortal:
In my view, the key insight is that digital media can contribute to every 
element of the mix. Therefore we must avoid a narrow categorisation of digital as con‑
tributing solely (or even primarily) to a single component of the mix.
While I haven’t come across an organisation that fundamentally disagrees with 
that view, some organisations find it easier than others to put it into practice. I have 
worked in organisations where the mix is embedded in the corporate structure with 
separate Pricing, Product, Distribution (Place) and Marketing (Promotion) departments. 
Embedding a digital mindset across those silos can be a daunting task.
I’ve experimented with channel pricing, as pricing is a critical driver of conversion 
and business value in a services organisation:
● 
Straight online discounts have proven difficult to justify. Online discounts aren’t 
valued by customers (in the age of price comparison, they focus on the total price, 
rather than its components) and often do not reflect a real lower cost to the busi‑
ness (lower costs to sell and serve are offset by lower transaction value and lower 
retention rates).
● 
Using channel data as a pricing factor has proven a lot more successful: as his‑
torical data is accumulated, it is possible to really offer competitive prices to those 
customers identified as high value at the point of application. An accurate value/
propensity model can use the wealth of information available from digital visitors 
(geography, visit trigger/campaign, past visits, customer history, etc.) to drive truly 
personalised pricing. In this example, price follows place and both price and pro‑
motion reflect the individual customer.
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Part 2
Strategy and applications
I’ve successfully extended the data‑ driven approach to other elements of the mix: 
dynamic packaging (the creation of a personalised offering from the basis of a modu‑
lar product) has proven successful many times: at easyJet we built a product that 
included car hire recommendations based on a predictive model that took destination, 
seasonality and party size as inputs – increasing car hire uptake very significantly. 
More recently I’ve applied the same insight‑ driven dynamic packaging approach to 
RSA’s Central and Eastern European businesses, increasing sales of optional covers 
and add‑ ons very significantly.
Further opportunities exist around selecting which default base products to pre‑
sent: are you more likely to want a cheap energy tariff that tracks price rises or a fixed‑ 
price deal that ensures protection against future rises? What we know about you from 
your digital ‘shadow’ may provide the clues we need.