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Coventus - Tapping the
power of 'value chain' creation
"Coventus
is designing a new value chain of information access and services to
deliver
superior solutions for business travelers."
from the desk of Peter Fillmore
December 1999
In Philadelphia, business travelers at the Villanova Conference Center
hotel will find a pleasant surprise when they check in. High performance
laptop connection facilities are available, allowing them to plug in and
work, avoiding the dreaded ‘e-mail backlog’ upon their return home. The
technology is from COVENTUS, a new Kanata company. My
visit with Rainer Paduch, President, as well as
Ken Davison, EVP Marketing & Sales, was enlightening.
As Davison reports, ‘We have a better solution than other approaches. Some
initial beta users commented ‘Wow, the e-mail is faster than my service at
home!’ This e-mail capability, however, is just the beginning. ‘We plan to
add a whole suite of useful functions, and have our software track user
patterns and preferences, creating what we call “intuitive networks” to
deliver strong user convenience,’ said Davison. COVENTUS has a number of
Hotels involved now, but the Villanova was chosen carefully. ‘This is a
“Training Center Hotel,” with most visitors being there on multi-day
courses’ he added, ‘a perfect place to find many road warriors to help
beta test and develop the early market.’ A few other strong marketing
ideas are being pursued:
Market segment strategy is clear - ‘Our strategy is based
on the belief that as the Internet evolves it is becoming a pervasive
force. We believe that network applications and services, not technology,
will evolve to be the next big growth market.’ COVENTUS is aiming
initially at the travel sector, which is ‘over 10 percent of global GDP’
according to Davison, with hotel applications being the lead pin on their
bowling alley to cross the chasm. Specific target buyers are the business
travelers. They are a great self-referencing group, so strong
word-of-mouth advertising can be expected.
Partner motivation is carefully considered - The service
is so good that hotels can use it as a feature to attract more clients -to
gain competitive advantage. COVENTUS is aware of competing products in the
hotel e-mail space, but they are bought by the hotels as a cost item. To
further distance themselves from competition, the e-mail is being packaged
as part of a suite to be called ‘the journey,’ and a strong brand will be
built around this concept. The combined power of branding and long-term
hotel partnerships (as distribution strategy) should help keep them ahead
of competition.
Power of value chains is part of the strategy - COVENTUS
is designing a new value chain of information access and services to
deliver superior solutions for business travelers, and going with a rising
tide of interest as mobile technologies become more pervasive. This
‘marketecture’ includes hardware and software, as well as hotels and other
business partners to deliver complete solutions to the end-user. Another
partner could be office services vendors, such as Kinko’s, to help with
end-user requirements like getting a presentation copied and bound on a
tight timetable. The importance of value chains was underscored by Michael
Tanner of The Chasm Group in a recent presentation on the connections
between marketing strategies and increasing corporate value. Tanner’s
thesis is that a company’s ‘competitive advantage period’ is formed by
several factors - being early to market in a new category, having
technology leadership, establishing leading market share, having superior
distribution, value chain ownership, and a strong brand. COVENTUS is
working on all of these factors.
Metrics of market penetration are tracked - Since early
revenues may be modest, COVENTUS has set up metrics of success. Hotel
signings and traveler usage are being tracked. At the Villanova Conference
Center usage has been as high as 7%. In Ottawa, several hotels are
installed, with the Best Western Victoria Park Suites gaining usage as
high as 11%. Book your visitors there and check for reactions.
This looks like a start-up to watch.
Your comments, questions, and suggestions for future articles are welcome
fillmore@westpark.com
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