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A
Customer-Centric Model Designing
a Relationship Marketing Program
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| S.Swaminathan |
| The
writer is Vice-President, Contract One-to-One, a specialist
division of Contract Advertising (India) Ltd. |
Today,
marketing heads and brand managers want to harness the power
of relationship marketing to get their brands closer to their
consumers. In an era of abundant choice, they believe this will
be the only differentiator. The need to own customers across
a lifetime is the primary reason for them to look at relationship
marketing seriously. In fact, many 1:1 marketing gurus like
Don Peppers and Martha Rogers of One-to-One marketing have stressed
the importance of ‘Customer Share rather than Market Share’
in the emerging era of digital marketing.
While brand managers are looking at relationship marketing,
the design of such programs and the evaluation of their effectiveness
have always been under debate. Very often, one finds a relationship
program being run for some time and abandoned. It starts with
great fanfare with a loyalty card and a newsletter being sent
at periodic intervals. Then, suddenly, the issue of payback/ROI
of the program, its effect on customers and its impact in the
marketplace is discussed and the program comes to a grinding
halt. Customers, too, are surprised as to how a personal communication
starts suddenly and stops with the same abruptness. Let’s
examine some possible reasons.
Reason #1: Unclear marketing
objectives: The excitement of a one-to-one program, its implementation
and logistics management are discussed more often than the tangible
results of a program. Clear benchmarking in terms of expected
results outof the program are never put down. For example, if
we are talking about customer share increase, the expected per
cent growth per customer against current usage over a specified
time line must be a key performance indicator (KPI). This would
help us evaluate the program more objectively after implementation.
But such KPIs are never put in place. |
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Reason
# 2: Lack of historical data for analysis: The future—
the kind of relationships that the program is expected to deliver—looks
so positive that the past is always overlooked. Customer usage
patterns need to be understood—what per cent of his usage
does the brand account for currently, are there any regional
skews in customer behaviour and usage, what the current |
market
share is and how many more new customers/prospects the company
would like to add as a result of this program, who and what
influences usage etc.
Reason # 3: Lack of understanding
of customer relationship triggers: As discussed earlier, a card,
newsletter, birthday card, and exclusive events are often thought
to be the best relationship triggers. However, these are generic
for any relationship program. How the product category and the
brand are currently seen by the consumer, what the relationship
with the category is, what influences relationships etc. are
very important insights that normally get left out in the design
of such programs. |
| Reason
#4: No proper tracking
and review methodology: After the launch of such a program,
the issue of its effectiveness vis-à-vis past customer
behaviour is rarely evaluated. Therefore, the initial excitement
dies down and the marketing team starts questioning the value
of such a relationship with the customer |
in
the absence of any quantitative indicators and proper tracking
mechanisms. How does one go about designing a relationship marketing
program keeping in mind the above issues?
Understanding the customer triggers
Many a time, we have found that things like sending point statements
in time, keeping in touch with the customer and proactively
informing the customer of critical issues create satisfaction
and hence build a bond. Unfortunately, though these things may
be simple, they often never get done.
As a step towards understanding these triggers, what may be
of interest is the use of a model called REPS (Relationship
Enabling & Planning System) that would help marketers understand
relationships. REPS helps us unravel the dynamics of relationships
by helping every marketer to start with the right questions
and see the program holistically (Refer diagram). |
Case
in point: Kids Study
Let’s look at how this model answered many of our questions.
In a focused group study with kids, we found that the relationship
triggers for girls were completely different from those for
boys. In the girls’ group, the mother was found to be the
only person they confided in and with whom they had a strong
and. |
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second most important relationship in their lives was with their
toys, and then came hobbies like drawing, creative writing etc.
The toys were so close to their hearts that they gave them names,
talked to them and even had a place for them in their homes.
Given this background, it is little wonder that Barbie is such
a strong brand. For one, the company has created a strong bond
with its target audience, and its regular upgrades like the
kitchen set, living room and so on have heightened the relationship
and loyalty towards the brand—primarily because they create
involvement and interactivity. |
In
the boys’ group, the mother did not emerge as a person
with whom they had a strong bond. However, in a subsequent relationship-mapping
exercise, in which the boys were asked to write down the people
and things that were close to them, she did emerge as the person
closest to their hearts. (This reinforces the fact that boys
exhibit their emotions far less than girls.) The relationship
triggers for boys could be beyond that of the mother, unlike
girls. But what they loved the most was activity-based hobbies
like cricket, tennis etc. Their relationships with friends were
warm and extremely engaging. Therefore, in a relationship program
for boys, rewards or gifts that involve such hobbies will tend
to work well and create a relationship. For example, cricket
coaching camp or a Sachin Tendulkar-autographed bat as a premium
might work better than, say, general newsletters with information.
Even when it came to toys, the boys liked the cars and bikes
that they owned - extremely activity-led and outdoor-related.
Designing a relationship program based on this model
Some of the simple steps that we could follow if we were designing
a relationship program for kids could be (let’s assume
that this is for a company marketing beverages for kids):
Benchmark First: An usage index (UI) in terms of current purchase/consumption
patterns is an important starting point. As an enrolment process
into the program, a simple easy-to-fill form with details could
be designed with an offer (different ones for boys and girls
offers could work better). This would act as a KPI for the relationship
program post-launch.
Slice the database: All enrolment and data collection must help
us break up the database into boys and girls and we should run
separately targeted programs, as the triggers for relationships
between them are quite different.
Designing customizable and relevant rewards: For girls, the
fact that they are involved, emotional and sensitive has to
be taken into consideration while designing the rewards and
recognition for the program. Hence, a gift voucher for Mom,
counseling, tips, crafts and collectibles (my mom album) could
work well. These could be gifts that will be redeemable on purchase
and on collection of points. Some of the triggers could be just
recognition programs, say, Save Animals Member—it could
create a strong bond with the whole program and the brand too.
However, for the boys, a coupon to the cricket or tennis match,
my cricketers’ album, collectibles—World Cup replica,
videos, best cars collection, WWF world team etc—could
work better for collection of points and redemption.
Not just transactions but involvement: Sometimes programs become
so transaction-focused that it becomes just one-way communication.
Programs can be successful only if there is involvement and
dialogue—something one looks forward to. Design this as
a part of the program. For example, a character can be created
or existing characters can be used, who the kids can write to
and get replies from. Creating a contest, best question of the
month etc. could create excitement and involvement.
Reviewing the program: The program needs to be reviewed under
several parameters—usage growth, absolute growth and share
of purchases, affinity towards to the brand, lowering acquisition
costs, referrals, upgrades etc.
Influencers as key audience: In the case of the girls, the mother
is a key influencer. Therefore, targeting mothers, educating
them, involving them in the program could become critical.
Relationship marketing is here to stay and grow. To create successful
programs, the key is to look at it from the consumers’
point of view and their circle of influence. This helps us redefine
objectives, evaluate performance measures of such programs and
add an envelope of additional activities that play an important
role in building strong bonds with the brand. Relationships
that build ROI for a brand are the only formula for success
in the future. |
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