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42 Rewarding loyal customers, not enticing new ones Aside from ensuring that customers are given personal, individual vouchers relevant to their own shopping needs, Casino, Tesco and Kroger's loyalty programmes stand out because they make a point of rewarding their loyal customers rather than focusing solely on potential customers. Casino prints ' star' identifiers on loyal customers' coupons. This clearly demonstrates to staff that not all customers are equal and is designed as much to reinforce a culture among employees that recognises the importance of customers, as it is to improve service to loyal customers. It simply links valuable customers with Casino's staff's bonus. To the person on the till it's shorthand for: ' These are the people to protect to win your bonus.' Rewarding loyal customers rather than chasing new ones, represents a sea change in conventional marketing thinking. Old- style marketing has always spent millions of pounds chasing the elusive new customer, hoping that enticing someone new to the brand would drive growth. dunnhumby has proved that it's a waste of money to chase your competitor's customers, better to invest marketing budgets on deepening the relationship and saying thank you to existing loyal customers. Casino, Tesco and Kroger have worked hard to convince their own clients, manufacturers like Coca- Cola and Procter and Gamble, to create coupons for their loyal customers rather than new ones. Alongside the reward vouchers customers are given personalised money- off coupons from their favourite products on their statements. The statements are also specifically designed to give more money back to customers the more loyal they are. The most loyal customers get more rewards than less loyal customers. This ensures the most valuable customers are given the most value in return from the retailer. Relevant advertising As well as enabling brands to send targeted, personalised mail to its customers, rather than spam them with irrelevant information, customer data also empowers brands to create more relevant advertising, leading to satisfied customers. any colour you like as long as it's any colour you like 43 Casino uses customer data to select products for its TV ads. This way the French retailer can ensure it is communicating with the brands that resonate with a broad range of customers. Customer data has also empowered Casino to reduce the number of promotional leaflets it mails out to customers. These mailings take place every 10 days and have been sent out automatically for so long that French retailers are nervous that not sending them might lead to a dip in sales. dunnhumby discovered that customers who lived far away from Casino stores struggled to be loyal, an insight that gave the business confidence to reduce the number of leaflets it sent out. Significantly, the stores saw increased sales despite the smaller number of mailings. Similarly Kroger, along with the other big American retailers like Wal- Mart, sends a weekly mailer to the doorstep of nearly half of all US households detailing the latest promotions. Analysis enabled Kroger to add science to the mailer and ensure the special offers appealed to a wider variety of customers. Previously, the front page of Kroger's weekly mailer would be dominated by the three products with the largest discounts. Today, each promotion speaks to a different kind of customer. For example, a blueberry offer might appeal to an upmarket customer, a special offer on Tide detergent is a core product that should appeal to everyone, while a big discount on a basic brand will appeal to a price- sensitive shopper. Data analysis also enabled Kroger to achieve something of a coup for the weekly mailer - persuade two competing products to sleep with the enemy and share the front page. dunnhumby discovered that customer loyalty was pretty fixed on diet soft drinks and would not be swayed if two competitors advertised in the same place. For the Thanksgiving weekly mailer, one of the biggest in the calendar, Pepsi and Coca- Cola appeared on the front page together. Historically, a soft drink promotion had always featured but the two companies would fight over who should star each holiday. It was a momentous decision that worked. Following the joint promotion, both brands sold three times more soft drinks than previously. Putting the needs of the customers first often benefits business too. the end of irrelevance |