An estimated 26.000 children worldwide under the age of five die every day from preventable causes such as pneumonia, diarrhoea and malaria. For UNICEF, an effective marketing campaign is one that is grounded in an understanding of their target audiences, overseas development issues and the impact this has on children.
Stephanie Phillips, Direct Marketing Manager – Retention at UNICEF Australia says “It is vital for us to communicate that each individual have the power to bring about better lives for children in war torn countries”. For most non for profit organisations and in particular UNICEF, mail is the preferred communication channel. “We use direct mail as it comes across as being real, authentic and personal,” she says.
By Richard Pester, Director of Training & Education, ADMA.
Do you remember your first loyalty card? I do. Long ago, even before Tesco Clubcard, an agency I was working for teamed up with a company selling a card swipe machine. It was (almost) the first of its kind and, as it was adapted from a ticket machine from a Belgian bus company, it was built like a tank. How we expected any self-respecting retailer to make room for this monster at its check-outs I don’t know. But eventually a paint distributor who was less interested in style and more interested in rewarding his regular tradie customers, took it on. As the years passed the machines became sleeker, the IT got smarter and the reward card became an established customer loyalty mechanic.
Throughout the 90’s brands big and small launched one card after another; some made a lasting impact, some didn’t. An interesting case study at the time was the experience of Shell, who along with the other petrol companies had introduced their own reward card. After a few years they figured that as every petrol brand now offered a loyalty card, they probably had minimal impact on loyalty as customers could accumulate points wherever they filled up, so they scrapped it. Bad idea; sales plummeted; a “new improved” card scheme was hastily re-introduced and sales recovered.
But what did this tell us? That reward cards are the key to customer loyalty? No. There were probably two key learnings from this:
- If you have nothing else to differentiate your service from anyone else’s then a card will make a difference.
- If you don’t collect relevant data about customers and use it in a relevant way you may find it hard to differentiate your service (especially in a homogenised market like petrol).
Since those early days a vast amount of material has been published on the effectiveness of loyalty schemes and there is no doubt that regardless of whether a card is used or some other means of tracking regular patronage a loyalty scheme will impact customer behaviour if managed properly. However as marketers are often focussed on the communication end of the marketing mix we often forget that building loyalty starts much deeper. The way we recognise and reward a customer’s patronage is the icing on the cake. Even the best reward scheme won’t work if the layers beneath are unsound.
So what are those layers? There are basically four:
- Perfect the basics: The ground level. This is your company doing the basics right – your products and supporting service are excellent. Customers get a great experience and your people and their attitude reflect your brand. This sounds so obvious it’s tempting to skip to numbers 2-4 but too often companies get it wrong. They let their processes slip, they start losing customers and try to fight the fire with better rewards and offers. Trouble is when the offers and rewards stop, the attrition continues if you fail to perfect the basics.
- Create dialogue: Having based your relationship on product/service excellence you’ve effectively bought your right to communicate with your customer – but you need to seal that deal with their consent. Once you have that permission you need to reinforce the excellence they already associate with your brand by creating a two-way dialogue. Make it worth their while to talk to you and find ways to collect relevant information from them – whether it is to do with their demographics, their needs, or their transactional and communication preferences.
- Enhance the relationship: You’ve ticked two boxes already – the next is to provide your customer with further proof of the fact that you value their patronage, and it doesn’t entail offering a reward. You’ve got their permission, you’ve gathered their data, you’ve listened to them – now you’re showing them it was worth their investment by making relevant offers at the right time. No-one minds being offered something they need. It’s a sure way to further enhance your brand and strengthen the relationship.
- Reward: Finally – you reach the level at which a customer reward really pays off. Sure you can put a scheme in place which rewards everyone for regular patronage, but the difference is without the other layers the “loyalty” is skin deep. Take the Shell example. You could argue they got the basics right – but in that market it was probably absolutely no different to any other competitor. Take the brand names away and you can’t tell the difference. So layer 1 was adequate, layers 2 & 3 were completely absent so the scheme had no long-term impact. On the other hand with all the layers in place you get more than loyalty, you get advocacy.
The steps outlined above form the structure of ADMA’s 2-day Retention Marketing course written and delivered by Deborah Kytic. The course runs next in Sydney (16-17 May 2012) and Melbourne (6-7 June 2012).