Part of a small group of companies, DKO was an interior retail design consultancy based in London with a team of a dozen talented designers and support staff. The company had an excellent reputation designing for major cosmetics companies.
Turnover c. £2m with net profit of about £350,000.
DKO’s held 3 separate contracts with their principal client relating to designing for 3 different geographical territories. Each of the contracts was reaching the end of their term. The clients were unhappy with the service and had indicated they didn’t intend to renew the agreements. This would mean the business would become insolvent very quickly thereafter.
Potential existed for a total loss of value.
Diagnosis of the situation showed there were many areas to improve. However the first three priorities were:
- Update the product
- Repackage the service
- Reposition the business
Update the product
Introduced new technology and new systems with a modest investment. This streamlined production and improved efficiency. The result was faster turnaround and reduced costs.
Repackage the service
Following discussion with the client it became apparent that they vehemently disliked the current inflexible contract. Listening to their needs, the service was unbundled so they had the option of buying the work item by item with the potential for lower prices.
Reposition the business
For a number of years the client had been bad mouthing the company as they felt it provided a poor service at high cost.
Following the product update and the service repackaging, the last step was to reposition the company. This demonstrated to the client that, with the launch of the new offering, the company was very responsive and good value based on what the client ordered.
DKO’s client was delighted with the new, transparent pricing structure, with the fast turnaround and the improved relationship. They signed new 3 year contracts. As an unexpected bonus, this new approach led to being awarded a contract to take over running their design studio in New York, USA.
Based on the same strategy of transparency and responsiveness, the US contract negotiated was hugely profitable for DKO.
The final outcome when Nick had completed his involvement was that total revenue increased to more than £4m and profits had risen over 2.5 times to more than £1m in 2 years.