The Marketing Challenge for 2006

Looking at to-days marketing landscape it is difficult not to conclude that reward-based loyalty programs have run their course. Airlines are rolling back on frequent flier schemes, multi-vendor reward programs have resulted only in localised and qualified successes and many high profile reward-based loyalty schemes are in the process of being reviewed or dismantled. None of this comes as a surprise to those of us in the industry who have long maintained that loyalty is earned, not bought. The single biggest failure has been a failure to exploit the customer data that is supplied by such schemes and to rely exclusively on the reward element of the scheme. This is tragic and, in many ways, inexplicable since all the research and expert commentary in this field has been at pains to stress that it is the data that is generated by such schemes that is the mother-lode to be garnered and exploited to segment the market and to re-engineer the business according to the pattern of segmentation. From the viewpoint of many consumers who have, wittingly or unwittingly, disclosed their personal information, the promise of individualization has proven illusory, trivial or exploitative.

The implied contract between consumer and business is one where the consumer supplies information to the supplier and the supplier is continuously adapting and personalising the service being supplied to the consumer. But is the return part of the exchange actually happening? How many of us supply the continuous information stream and get nothing of any real value in exchange? Time is running out for many businesses to demonstrate that they are, in fact, in the exchange business and not just in the acquisition business. In a very many cases less high-minded motives than the desire to improve customer service on the part of business engaged in gathering information suggest themselves. The extent to which customer information is exclusively used internally by the organisation to fine tune business practices and strategies illustrates this point vividly. Of course, there are many businesses that understand the loyalty concept perfectly and are busily working to develop personalised services to meet the needs of different customer segments but the point has now been reached when we need to distinguish clearly between those businesses that are genuine in their quest for relationships and those who are incapable of abandoning the machinery of mass marketing in favour of a differentiated marketing strategy.

The following are recent articles by Sean Kelly on a range of topics relating to customer intelligence.

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