FAQs
This page contains answers to common questions, along with some tips and tricks that we have found useful and presented here as questions.
- How do I create "added value"?
- Where can I find more information about loyalty marketing ?
- Why doesn't mass marketing work anymore ?
- Who is Kathleen Sindell, Ph.D., author of Loyalty Marketing for the Internet Age ?
- What is the likely impact of a recession on loyalty marketing ?
- What sort of returns can I expect from loyalty marketing?
How do I create "added value"?
Companies must create some level of perceived customer value with fresh and personalized content to create that "stickiness" we hear so much about. This "added value", plus intense personalization and unparalleled customer service are key to retaining customers both online and offline. For most companies this means managing and increasing customer value by building business-to-customer relationships, often on a one-to-one basis.
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Where can I find more information about loyalty marketing?
This Web site provides a research center that includes links to worthwhile Web sites, downloadable articles, and a discussion area that is designed to improve the quality of life and economic well-being of people and business organizations by providing information that they might not otherwise have or understand.
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Why doesn't mass marketing work, anymore ?
In the past mass marketing was the only efficient way to sell to millions. Today there are new technologies at work. A few examples are:
Personalization: Personalization is driven by Web sites that try to serve the e-customer with value-added offerings such as individualized Web pages, such as, My Yahoo (my.yahoo.com). Personalization increases interactivity with users. This in turn stimulates an ongoing dialog that can build customer loyalty.
Database mining: Hidden in your data you may discover benefits that are greater than brand awareness, or new products or services. Data mining has been around for a long time but with today's new technologies and the Internet, customer information is easier to gather and use to increase the value of your customer base.
Mass customization: When you sit in a car and look at the dashboard, with its various places to plug in different dials and gauges in any range of combinations you are seeing the effects of mass customization. You car radio can have knobs, slide handles, or radio dials. The upholstery can be any one of seven colors with your choice of leather, shiny velour or high grade matte fabric. This give you a choice of 21 ways to customize the interior. This with your choice of other combinations of options lets you customize your new car in a thousand different ways.
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Who is Kathleen Sindell, Ph.D., author of Loyalty Marketing for the Internet Age ?
Kathleen Sindell, Ph.D. is an adjunct faculty member at the Johns Hopkins University MBA program and the author of numerous popular, academic, and professional articles, Web sites, and books including bestselling Investing online for Dummies. A dynamic consultant, speaker, writer, and scholar, Sindell is regularly tapped as an e-commerce expert on CNNfn, The Nightly Business Report, and at popular online and print outlets.
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What is the likely impact of a recession on loyalty marketing ?
An economic recession increased the need for loyalty marketing by dampening a company's ability to acquire new customers. Moreover, satisfied customers represent the lifeblood of any business and pave the way to sustained profitability. Companies can get away, for a short time, with avoiding upgrades back office systems that handle corporate functions such as, human resources, accounts payable, order fulfillment, but the firm cannot survive without adequate customer service and support. Failing to collect and properly analyze customer information for loyalty marketing will almost certainly result in the loss of the firm's very best customers.
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What sort of returns can I expect from loyalty marketing ?
According to Frederick F. Reichheld (1996), a director at Bain & Co., "Consistently high retention can create tremendous competitive advantage, boost employee morale, produce unexpected bonuses in productivity and growth, and even reduce the cost of capital."
Based on studies conducted by Frederick F. Reichheld and W. Earl Sasser, a professor at Harvard Business School, a company capable of increasing its customer retention rate by 5% can almost double its earnings.
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