Magazine article Marketing

Loyalty in a Foreign Climate

Magazine article Marketing

Loyalty in a Foreign Climate

Article excerpt

Overseas companies can teach UK firms some valuable lessons in building lasting, interactive relationships with customers.

Multi-national companies routinely transfer marketing issues from one economy to another - and customer loyalty is no exception. The leading practioners are in the US, where it is known as 'frequency marketing' and where its definition is: to identify, maintain and increase the yield from best customers, through long-term, interactive, value-added relationships.

This article aims to lay down the ten commandments of 'good practice', drawn from experiences abroad and based on the US definition. They are:

* Be creative in your targeting - the Magic Kingdom Club was born in 1957 at Disneyland in California, offering employees of nearby corporations and military installations special discounts.

Since then, the club has expanded worldwide. It serves over 27,000 participating companies, accounts for 45 million people and has over six million card-carrying members. Its objectives are "to communicate, promote and motivate members and their families to come more often, extend the length of their visits and stay in Disney resorts".

Benefits include a membership card, the Disney News Magazine and discounts on ticket prices and merchandise at the Wait Disney World Village and other Disney stores. Benefits are also offered with affinity companies, such as Delta Airlines, National Car Rental and so on.

The database is robust, tracking membership behaviour and incorporating demographic information gathered from membership applications.

How many companies in the UK recruit through the place of work in a manner which benefits both employer and the sponsor company?

* Be creative in your thinking - in France, Nestle established a programme directly related to its customers' needs, set out to identify with them and, in so doing, influenced its target customers' attitudes to the product.

Nestle's aim was to improve the life of the parents of young children - a demonstrably different vision to simply thrusting your product down your customers' throats. But how did it go about it?

Customers were mailed every three months with a relevant baby/child food range geared to the growth stages; a permanent helpline was established, operated by a licensed dietician acting in an advisory capacity on all aspects of diet; and Relais Bebe stations were set up on main motorway routes offering parents a free menu for their baby with nappy-changing facilities and a resident host. With 750,000 children born each year, around 120,000 parents took advantage of Relais Bebe in the first year. It was an excellent way for the brand to establish direct personal contact with its customers. And the result? Brand share increased by 150% over ten years.

How many marketing managers would persuade their board to invest in such a strategic customer-relationship building programme where there is no direct correlation between expenditure and volume sales?

* Be committed - if the message is not already clear, customer loyalty has a strategic focus. It is not tactical. You cannot start a relationship and leave it totally unfulfilled. The board must not chop the spend - there must be a sign-off by the board to the value of building customer relationships.

Chrysler's 'Cool' programme (Customer One-Owner Loyalty) puts this into context. It starts with a dealer's thank-you letter soon after a vehicle sale and continues with targeted mailings for eight years; a quarterly added-value publication - with editorial advice, owners' letters, dealer-specific promotions and affinity offers - for five years; and monthly coupon offers for three years more.

How many UK marketing directors can get such a commitment?

* Be financially aware - 'Opportunity Calling' is a programme created by AT&T in response to the deregulation of the long-distance telephone business in the US. …

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