Friday, 10 October 2014

Money can buy you love: loyalty marketing

Loyalty programs seem to be on the rise again. To be honest I have always struggled with them. The gain seems to be too little over too long to bother. And the ones I like are the ones that give me things for doing nothing, or more to the point nothing more than I would have done anyway. Which rather defeats the purpose of a loyalty program. They should change behaviour.

How many people have cards for Sainsbury's, Tesco and Co-op. I need to find out. But I did observe a couple in queue at co-op exchanging vouchers then 2 days later in Sainsburys waving the reward card. I only clocked them because they took so long discussing the virtues of a co-operative organisation. They clearly admired the co-op but not enough. 

I only went there for my daily special brew top up. 

With a few caveats the secret to loyalty is doing what you do very well. Good product, good price, good service and easy. Easy in that your brand is the path of least resistance. 

Talking of easy. I am not a fan of easyJet but I tend to think of them first for local flights, I know my way round the website. I go there before I go to skyscanner. It is the default. That's what your aim should be. And if you cant be the default, make sure it is easy to engage with your brand. Remove the hoops. 

Of course it always help if they like your brand. 

But what I find interesting is the emergence of paid for loyalty schemes. When you pay for something you have sunk costs, so to that extent you are going to make sure you use it. Hey presto. Behaviour change.

Intercontinental have run ambassador club for yonks, very successfully. But it is a profit centre not just a cost to the business. Guardian have launched their new membership program not sure it is a loyalty program, but it looks like an interesting value exchange with customers, so may be it is. The other interesting thing about paid for programs is that consumers defend and advocate them, after all you can hardly buy in to it and say it is crap. 

So perhaps the secret of loyalty is just for businesses to what they do well, don't expect people to value what you hand out for free. 

But remember maybe money can buy you love. 

Monday, 6 October 2014

Thursday, 4 September 2014

Jorg Gray pioneers dreadful advertising

This is special. The line says 10:32 the moment i was asked to join the board. 

Welcome Piers, so whats your perspective on improving the supply chain. Oh you cant make it ... you have to buy a watch. 

These are premium watches ... so make sure you advertise in quality publications ... like the metro ... and give 10% off just to show how premium they are. 

The problem with this is it proves any idiot can do marketing and advertising. Thanks fellas.

Saturday, 13 April 2013

Show your mum want marketers do all day

The joke goes although i am not sure it was necessarily meant as a joke was that the client and agency like big marketing campaigns because at least they don't have to explain to their mums what they do. I am not so sure it is marketing who love big visible high profile campaigns. If sales, the MD or COO don't see your campaign in the specialist press or perhaps if you are lucky enough to have a big budget on TV then the inference is "what are those fools in marketing up to all day".  A really smart and devious marketer circumnavigated this issue by purchasing a few outdoor sites en route to the head office; i only have admiration for that level of Machiavellian thought. Nevertheless the irony is that the people in the business who want you to improve lead quality and conversion are often the same people encouraging you to play a bigger budget volume game.

Thursday, 29 November 2012

Chess, advertising and marketing dis-integration

Marketers talk about integration. I think that is frequently a cop out. The real problem is a dis-functional misalignment of the business. In effect the business is disintegrated let alone their marketing and communication efforts. Here are the classic symptoms.

Finance create products to maximise short term margin. Operations want volumes of leads. Sales want quality of leads. Marketing use other metrics like customer satisfaction and long term customer value. All these objectives are in conflict.

Of course the we have to work within the constraints of the business but sometimes they are so restrictive they make everything you do a failure by one or other of the above criteria. If marketing want to get up the food chain, be more commercial, they have to help the business become more integrated. Everyone sharing the same objectives and vision. What do we want to be? How does this translate into business objectives? What do we need to do and really importantly what should we not do?

Solving the marketing version of the problem, communications integration, whilst the business beats itself up is nice but not that useful. Someone once said chess and advertising are the two biggest wastes of human intellect. There is some wisdom in that. Too much effort solving the wrong type of problem.

Do you know an organisation that fits the profile?

Wednesday, 28 November 2012

Short termism is the key to business success

What i didn't understand properly and what even the less imaginative accountants acknowledge is that profit is not an absolute concept. You tend to think of profit as something factual and indisputable. But profit depends on a variety of factors like how you decide to depreciate assets, how you treat the expected future flow of revenues from service contracts and at what point the costs hit the bottom line. Of course businesses think they are trying to maximise profits but the interesting question is over what time period. Those in the business who have a shorter term horizon focus on reducing costs and maximising margin, those focused on the longer term focus on maximising the contribution from a customer. In other words if you rip off a customer the chances are they will piss off earlier than you hoped. 

Unfortunately it is a lot easier to reduce costs and increase margin which goes some way to explaining why so many businesses have such a short term outlook and are run by accountants and not marketers. The fact that us marketers have managed to create a reputation for being being unable to add up and being not very commercial also explains why we are not on top of the pile.

About Me

My Photo
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.