The mechanics change – the tasks remain the same

The launch of Barclaycard’s new loyalty programme Freedom shows that the mechanics of customer retention may change, but the objectives of marketing do not. When you get down to it, there are only three tasks a marketer is paid to do: win customers, sell them other products in the brand portfolio, and keep them. That’s true irrespective of whether you operate on or offline.

Barclaycard Freedom’s retention mechanic has moved from the world of coupons and points to cash rewards. Loyalty used to be built on coupons or such things as collecting a set of glasses. Then the likes of Air Miles and Tesco’s Clubcard enabled individual customer behaviour to be collected via the database, so tailored offers followed. But Barclaycard already know who bought what, when and how much. Its new Freedom mechanic is singularly appropriate – a credit card giving real money off next time you shop – an almost instantaneous reward by shopping again.

How have the mechanics of cross-sell changed? Many of the original ones are still with us, such as on-pack promotions for other varieties and multi-product offers in the press and TV for a single brand. These are usually for low value items that often preclude the costs of collecting individual customer data. However, technology enables many brands now to sell long.

One example: five months ago I got a tyre replaced at Kwikfit and filled in a short questionnaire. Today, in late April, I received a phone call asking if I was interested in buying Kwikfit insurance. Here’s the power of time-triggered data to sell long, when key customer data is captured on the database. Likewise, e-CRM is a great tool for all on-line retailers to cross-sell to those who have already bought from them.

Now what mechanics have changed in winning customers? Every company has a leaky customer bucket that needs replenishing, new products and new brands need customers, and there is always the need for greater market share to lower operating costs.

This is why the need for interruptive marketing will always be the key role for marketers. Broadcast media, direct or email, or call centres all interrupt the flow of the lives of customer prospects to make brand offers. But this is an issue that seems not often addressed by online technology suppliers and agencies.

For example, social networking is now being billed as a way of engaging potential customers to buy a brand by being useful in a Facebook community. There is yet little evidence that the mechanics of peer referrals drive new prospects to buy brands. Most brands were created and are sustained through  interruptive marketing mechanics.

However, there is great power in database technologies that combine off and online customer data to build profiles that will drive successful new customer prospecting. This is getting to the right people with the right offer. A basic task that will never change.

By David Perkins, managing director, dp Consulting

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