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Finders Keepers

Published In: The Blend - June 2007
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If a customer relationship marketing approach is to truly succeed, it must go to the very heart of the brand relationship and play to its strengths.

Two Little Dicky Birds

In a world where the competition is fierce and success hard-fought, it would seem that the merits of customer relationship marketing hardly need to be argued. Our winning over of new customers is often so long and exhaustive a battle that the victorious business cannot afford for it to be an end in itself. There is no time to rest on our laurels. Others roam near at hand, ready to snatch away our hard-won spoils. We must build on our advantage, make more of our gains and secure a real return on what we have invested in growing our market and securing new custom.

In such a world, few business-owners are unfamiliar with the wisdom of managing relationships with customers beyond the initial transaction for mutual benefit. The well-organised business almost invariably has a system in place to track the progress of the relationship and to identify strategic opportunities to pitch more sales offers to the customer.

But so many of these systems are clumsily applied. In too many cases, they do not go much beyond simply adding the customer to a marketing database and including him or her as a target for future campaigns. Unsurprisingly, this sense of being targeted can be counter-productive. As customers, we do not want to feel as though we are chattels of war, hard-won assets to be sweated by our new owners. If a customer relationship marketing approach is to truly succeed, it must go to the very heart of the brand relationship – that key exchange between the business and its customer to shared benefit - and play to its strengths. Otherwise, it can become a crude instrument of manipulation that leaves the customer feeling grubby and exploited.

Sitting On A Wall

So, how does a business go about building a healthy and profitable approach to its customer relationship marketing? I met with Leanne Papaioannou of Chilli Pepper Marketing to learn more. Chilli Pepper’s website begins by briefly offering the classic rationale for relationship marketing, ‘It costs you more to form a new relationship than to build on an existing one’, but quickly moves beyond that to map out how this can be practically done.

Leanne, who previously plied her trade both in her native South Africa and, more recently, in London, remarks that too few businesses in this part of the world have put a customer retention strategy in place. This is especially true of the hospitality sector, where many confuse it with broader communications plans and simply include a monthly ezine to customers with news and special offers. “But,” says Leanne, “this is only one small element of retention marketing and the content of these ezines should be 80% added value to the customer and only 20% special offers from the hotel. Next time you receive an ezine from a hotel, have a look at what their balance is.”

One Named Peter, One Named Paul

It is not as though the typical hotel or spa is starting out on the back foot. Businesses in the hospitality sector are particularly well placed to establish a platform for keeping customers long after they have first found them. One of the first things we do as guests is tell our hosts, both formally through registration and more informally through friendly exchange, where we come from, what we are inclined to do and what our likes and dislikes are.

In the classic entrepreneurial handbook, The E-Myth, author Michael Gerber describes the immediate impact of being taken care of by a business that skillfully gathers such intelligence, adds a little touch of imagination and anticipation, and puts it to use in better serving the customer: “The moment I walked into the room and felt the fire, I knew that someone had thought about me. Had thought about what I wanted. I hadn’t said a word, and yet they had heard me…The instant I heard the coffee perking and saw the card that identified it as my brand, I remembered that someone had asked for my preference the night before. And they had heard my answer. And it was totally automatic! Every single element was an orchestrated solution designed to produce a marketing result, an integrated component of the hotel’s management system.”

Fly Away Peter, Fly Away Paul

Note that the writer didn’t feel either grubby or manipulated. On the contrary, he was clearly elated by the sense that the hotel, through its well thought-out systems, had heard him and had responded with attention and flair.

This too is the impact of a well thought-out customer retention strategy that reaches beyond the walls of the building to remind the customer how we are remembered and appreciated. At one step removed, the “I hadn’t said a word, and yet they had heard me” is even more powerful.

Couple this with the fact that the best advertisement for a product is the product itself, and you have a potent recipe for bringing the customer back again and again to enjoy your hospitality. And remember that the host is particularly well placed to orchestrate such a system for he operates in a sector where the customer easily shares details of his own tastes and preferences. All he has to do is ask.

Come Back Peter

I asked Leanne how a business might go about designing a strategy to keep its customers coming back again and again and she outlined a number of priorities.

First, she suggests that you segment your customer base. “Obvious as it may seem, not all of your customers are equal in value and it is important that you know who your most valuable customers are.” Then she proposes that you adjust your marketing budget to ensure that you spend according to the profitability of each customer. This can impact on everything from the gift you send at Christmas to the type of event you might host to thank especially loyal guests.

Naturally, she advocates getting to know your customer (something which is anyway a vital part of the strong branded relationship) and reminds us that “for the most part, people are flattered to be asked for their opinions and preferences, so it’s not very difficult to put together a profile to use when communicating with them and anticipating what they might want next.”

Next, she suggests that we “communicate, communicate, communicate” and tailor each communication so that it is always “expected, personalized, relevant and trackable”. Through observing customer habits and patterns we can predict future behaviours and anticipate what might prompt a guest to either return to us or defect elsewhere. We can then offer encouragement and incentive to invite our customer back to our door and make sure that we welcome them with open arms when they arrive.

Come Back Paul

Leanne says that, “this ability to offer the right product to the right customer at the right time is extremely powerful. By identifying your valuable customers and where they are in their life cycle, you are able to offer them additional products and services that are tailored and relevant to their needs”.

On top of that, she cautions that it is vital that you align your general customer service strategy with your retention activities and “make sure that your most valuable customers are known by your team so that every exchange your customer has with you and your brand is consistent.”

And just what is a valuable customer? Leanne suggests that, “a satisfied customer is a company’s greatest asset and must be protected to the greatest degree.” She reminds us to check in with them often in order to develop a stronger understanding of what they need from us and of what they find attractive and important in what we have to offer. And naturally, she recommends that we develop a plan to reward our most valuable customers for their loyalty and to thank them for their business.

Finally, Leanne stresses the importance of measuring the return on investment. Luckily, retention marketing is one of the easier activities to reckon and the business-owner can readily gauge the impact of the marketing on the bottom line.

Finders Keepers

So, does it make sense to invest in a customer retention strategy? It’s a nonsense not to. Above all, in listening to Leanne, we are reminded that well thought-out and well acted-through customer care always makes good brand sense as it feeds the relationship between the business and its customers and enables each to play their part in the exchange. On the one hand, the business-owner benefits from knowing the customer better and being able to count on them in the future whilst, on the other, the guest enjoys that sense of elation that comes from being listened to and appreciated and is naturally more inclined to spend time and money with their host.

If you like Leanne’s distinctive flavour of customer relationship marketing and want to taste more, visit www.ChilliPepper.ie

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Published In: The Blend - June 2007
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About 'The Blend'

Finders Keepers is one of ‘The Blend’ series of articles in which Gerard Tannam takes a look at how to cook up a great brand, samples some of the ingredients you'll need to make one of your own and weighs up the impact of branding on different parts of the business mix.

Gerard is the founding Managing Director of Islandbridge, a business that delivers brand direction, planning and corporate communications across a wide range of sectors including retail, property, hospitality and tourism. Recent clients include Temple Country Retreat & Spa, Musgraves Food Services, Choice Hotels, The Westport Woods Hotel, Liffeyside Properties, Littlejohn Health Centre, and DIT School of Hospitality Management. For more on putting your brand to work for your business, get in touch with Gerard Tannam on +353 1 495 3330 or [email protected]

 

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