Friday, 30 July 2010

Got a problem you cant fix - invent a program

Spent two days in a workshop on loyalty for a client, there was lots of clever thinking, but one conclusion was there is no such thing as loyalty marketing. You either have a specific loyalty program or you just do your job properly - which means getting brand .... service ... in store experience ... smart cross selling ... CRM processes right. And in many cases if you desperately need a loyalty program it probably means you have got something wrong somewhere in your core offering. Another case of marketing covering up organisational dis-function. Remarkably common.

My other conclusion is there is an obsession with measurement and data to the point that businesses wont implement an initiative if they cant measure impact - even if they think it is right thing to do. It was an example someone cited from IKEA that got us thinking. One store manager decided not to keep a list of FAQs from customers for review. They just act immediately. So if a customer asks whether a table comes in oak as well pine, they immediately change the labelling to indicate the information. A culture of immediate response, it just isn't automated, and impossible to measure impact.

Saturday, 3 July 2010

Loyalty businesses not loyalty programs

About a year ago on the blog I suggested that loyalty would be doing a big come back, and in the last year there have been numerous loyalty and CRM briefs and pitches flying around. We have been fortunate enough to get a few and win some businesses. So it looks like I was proved right. That's all I wanted to say ...

But then you start to think a bit deeper. Increasingly if a business wants a loyalty program that probably means something is broke and they are looking for a mechanic to fix loyalty. For a few businesses loyalty programs (transactional based ones) are difficult to implement. Little control over the retail environment ... very infrequent purchase behaviour in the category ... big ticket, low margin. White goods would be an example.

We should look at loyalty differently, examine businesses in sectors with relatively high levels of loyalty and work out what they do well. My 'guess' is that they have good products, strong brands, good customer service processes and policies, customer focused culture. The trouble is it is easier to create a loyalty program than fix a business. Short-termism creeps in. But perhaps we should think about creating loyalty businesses not loyalty programs.

If Easyjet thought of themselves as a loyalty business that happened to sell flights how would they behave differently ?

Its quite a good question to pose to businesses.

I am off to look at our research now, there is 1000 page doc on my desk at work, to see what businesses with great bonding and loyalty scores do so well. But if anyone has a nice neat answer that will save me a lot of reading please let us know.

About Me

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United Kingdom
Just curious about marketing, psychology, economics, business, irrational behaviour, people, models, communications, advertising, market imperfections, b2b marketing. I work in the marketing communications industry for OgilvyOne.