We have all heard of the premise of a "customer-centric organization." This concept basically proposes that the needs and wants of consumers should form the backbone of an organization, giving it a singular focus and clear direction that guides all of the company's decisions and actions. In theory, being customer-centric is a sensible strategy, but many companies take their interpretation of the concept too far, leading to errors in execution that can have grave long-term consequences.
The basic premise to “base all of a company's actions and decisions on what will please the customer” is definitely an honorable concept. This same premise, however, poses the greatest potential risk for improper interpretation. If a company does everything in its power to please its customers, how does it determine when organizational goodwill is taken advantage of by insatiable customers who will never be happy, no matter what actions a company takes?
Consumers always want the best product and the highest quality at the lowest price, delivered with the most convenience and comfort possible. The challenge for a company is pleasing customers with varying tastes, since the definition of quality, price, convenience and comfort varies from one customer to the next. In this scenario, it's easy to see how the concept of a “customer-centric organization” is impossible to retain in its purest sense.
To illustrate the point, consider the example of something that we are all familiar with – taxes. Assuming that the government could adopt a “customer-centric” strategy, do you think that we would all be willing to pay the same amount in taxes? Do you think we would all even be willing to pay taxes at all? Everybody in a society, even those who are part of the informal economy and do not pay taxes, wants electricity, water, roads, safety and other quality services – regardless of how we may define them.
Another example, even more extreme, further presents the complexity of the argument. Consider the case where you go to the doctor, expecting to be treated in an efficient and effective manner, with the physician applying the skills and experience necessary to determine the best treatment and cure the ailment. During the course of treatment, there may be some discomfort or even setbacks, but the end result is what is driving the decisions, not the process itself or anything that is experienced along the way. This is the same process that we use when considering a purchase of any product or service. Whether it's a music player, a haircut or a car, we are all looking for the solution that best suits our needs, without regard to the process we undergo to make our decision.
To be successful and viable in the long-run, modern companies must of course understand and accommodate the needs and wants of consumers. But companies must also also realize that being customer-centric does not simply mean that a business must blindly cater to the whims and desires of its customers. Businesses must apply their knowledge and experience to propose solutions that are practical, profitable and sustainable over time. In addition to satisfying their customers, companies must show the same level of commitment to their shareholders, employees and local communities.
Companies must offer a sufficient return on investment for the shareholders, investors and suppliers that provide the resources to develop the business. They must satisfy employees and business partners by offering support, development and security in return for their effort and dedication. And finally, businesses must realize the impact they have on the community and should act responsibly and ethically to be good corporate citizens at all times.
All companies should believe in the products and services that they offer. What is the best wine, the best mobile phone or the best type of music? There is no single answer to this, since it varies by person and even for the same person, depending on the specific situation. All that the winemakers, phone manufacturers and musicians can do is offer the best product possible, based on their knowledge and experience. Feedback from customers should certainly be taken into account, but it can not be the only factor, since the interests of shareholders, employees and communities must also be considered. As business leaders, we owe our allegiance not only to our customers, but to all of the individuals and organizations that contribute to our long-term viability and success.
miércoles, 27 de enero de 2010
miércoles, 20 de enero de 2010
The new mexican customer
Studies commissioned by ampersand and performed by MDI Group during 2008 and 2009 revealed the importance of understanding customers and building loyalty as a key strategy for retention. The study, titled “Evaluation, understanding and market segmentation of loyalty programs,” conducted in 2008, determined:
A wide range of companies – including financial institutions, logistics and shipping companies, medical groups, engine manufacturers, hotel chains, insurance and real estate firms, retailers and budget airlines – represented a diverse but focused group of companies that introduced or strengthened their loyalty programs and demonstrated a renewed commitment to their customers and potential customers in 2009. Without a doubt, many of these companies strengthened their hold on their customers this year, even through the economic turmoil.
- 62% of the respondents have a loyalty program, and
- 77% considered that a loyalty program was “important” or “very important” when choosing a product or service.
- 90% used the loyalty program in the past 12 months
- 73% would “recommend” or “highly recommend” the loyalty program, and
- 28% increased their use of, or sought to only use, products or services that have a loyalty program.
- 48% are attached to the brand, shown by a resistance to use or purchase competing products or services.
- 57% purchase or use the brand's products or services more frequently.
- 66% have recently redeemed points or received benefits from their loyalty program.
- 67% intend to purchase products or services of the company that has the loyalty program.
- 33% like to immediately redeem their points for goods or services.
- 49% prefer to wait and accumulate points over a longer term for larger rewards.
- 93% want to redeem points for benefits such as gifts, theater tickets and other prizes, rather than receive cash rewards or "cash back."
A wide range of companies – including financial institutions, logistics and shipping companies, medical groups, engine manufacturers, hotel chains, insurance and real estate firms, retailers and budget airlines – represented a diverse but focused group of companies that introduced or strengthened their loyalty programs and demonstrated a renewed commitment to their customers and potential customers in 2009. Without a doubt, many of these companies strengthened their hold on their customers this year, even through the economic turmoil.
miércoles, 16 de diciembre de 2009
Estrategia para lograr el éxito en el 2010
Este 2009, como lo han mencionado los empresarios, financieros, políticos y trabajadores, es el peor de los años en la historia de México de las últimas 3 décadas. En consecuencia, grandes empresas quebraron, negocios cerraron, proyectos se pospusieron, y cantidad de personas perdieron su trabajo o fuente de ingreso en números récord.
Por si fuera poco, nos vimos inmersos en una debacle político-presupuestaria que propuso de todo, desde impuestos que incrementan la brecha digital y limitan el acceso a información como lo es el impuesto al Internet o a las telecomunicaciones, hasta perpetuar el rezago histórico de la dependencia del petróleo como variable manipulable para hacer cuadrar el presupuesto. Se propuso todo tipo de aberraciones que además se complementaron con otro tanto de estériles debates retóricos entre fuerzas políticas incapaces de provocar cambios y que terminaron por producir más de lo mismo: “reformas” superficiales que taparon huecos presupuestales inmediatos, pero a la vez, perpetuaron y profundizaron al posición de nuestro país en el vagón tercermundista del convoy locomotor que es la actual economía globalizada.
Pese a todo esto, sin embargo, existieron esperanzadoras historias de éxito en nuestro país. Desde una simbólica selección mexicana de futbol que recuperó la senda para lograr su calificación al mundial Sudáfrica 2010, hasta innumerables empresas, pequeñas y grandes, que no solo mantuvieron su posición en el mercado sino que inclusive expandieron sus operaciones, incrementaron sus ventas, y ganaron mercado.
Algunas de ellas, simplemente se vieron beneficiadas por las condiciones de mercado –si, créalo, hay muchas compañías que tienen sus años de mayor bonanza cuando al resto de la economía le está yendo mal, como lo son empresas de out-placement, despachos especialistas en cobranza, o inclusive la industria médica y la educación superior. En esta última, por ejemplo, gente que no encuentra empleo decide aprovechar su tiempo para adquirir nuevas habilidades y se enrola en programas de educación superior.
Sin embargo, la mayoría de empresas que alcanzaron importantes logros durante el 2009 lo hicieron a través de:
a) enfocarse en el largo plazo – resolver los problemas de hoy, pero sin mermar la capacidad para continuar construyendo el mañana
b) identificar y explotar o eliminar sus fortalezas y debilidades respectivamente – aprovechar que la crisis delató lo bueno y malo de la compañía para introducir mejoras y fortalecer las capacidades, y
c) acercarse a sus clientes – reconocer que la demanda por sus productos o servicios no desapareció sino simplemente cambió, y abordar entonces al mercado con propuestas de valor agregado
Aprovechando lo que hemos aprendido en el 2009, y consientes de los continuos retos económicos, políticos, sociales y de mercado que enfrentaremos en el 2010, las empresas debemos enfocarnos en desarrollar e invertir en proyectos que logren apalancar la mayor proporción de nuestros recursos en la parte baja del embudo mercadológico.
En un mercado donde las alianzas estratégicas y las coaliciones trascienden barreras y alcanzan todos los aspectos de la vida institucional de nuestro país, la alianza más importante que debemos buscar y pelear aguerridamente, es la alianza con nuestros consumidores. El 2009 fue el año de quienes supieron cimentar el vínculo con sus clientes, el 2010 será de aquellos que sepan construir lealtad sobre ese vínculo.
Por si fuera poco, nos vimos inmersos en una debacle político-presupuestaria que propuso de todo, desde impuestos que incrementan la brecha digital y limitan el acceso a información como lo es el impuesto al Internet o a las telecomunicaciones, hasta perpetuar el rezago histórico de la dependencia del petróleo como variable manipulable para hacer cuadrar el presupuesto. Se propuso todo tipo de aberraciones que además se complementaron con otro tanto de estériles debates retóricos entre fuerzas políticas incapaces de provocar cambios y que terminaron por producir más de lo mismo: “reformas” superficiales que taparon huecos presupuestales inmediatos, pero a la vez, perpetuaron y profundizaron al posición de nuestro país en el vagón tercermundista del convoy locomotor que es la actual economía globalizada.
Pese a todo esto, sin embargo, existieron esperanzadoras historias de éxito en nuestro país. Desde una simbólica selección mexicana de futbol que recuperó la senda para lograr su calificación al mundial Sudáfrica 2010, hasta innumerables empresas, pequeñas y grandes, que no solo mantuvieron su posición en el mercado sino que inclusive expandieron sus operaciones, incrementaron sus ventas, y ganaron mercado.
Algunas de ellas, simplemente se vieron beneficiadas por las condiciones de mercado –si, créalo, hay muchas compañías que tienen sus años de mayor bonanza cuando al resto de la economía le está yendo mal, como lo son empresas de out-placement, despachos especialistas en cobranza, o inclusive la industria médica y la educación superior. En esta última, por ejemplo, gente que no encuentra empleo decide aprovechar su tiempo para adquirir nuevas habilidades y se enrola en programas de educación superior.
Sin embargo, la mayoría de empresas que alcanzaron importantes logros durante el 2009 lo hicieron a través de:
a) enfocarse en el largo plazo – resolver los problemas de hoy, pero sin mermar la capacidad para continuar construyendo el mañana
b) identificar y explotar o eliminar sus fortalezas y debilidades respectivamente – aprovechar que la crisis delató lo bueno y malo de la compañía para introducir mejoras y fortalecer las capacidades, y
c) acercarse a sus clientes – reconocer que la demanda por sus productos o servicios no desapareció sino simplemente cambió, y abordar entonces al mercado con propuestas de valor agregado
Aprovechando lo que hemos aprendido en el 2009, y consientes de los continuos retos económicos, políticos, sociales y de mercado que enfrentaremos en el 2010, las empresas debemos enfocarnos en desarrollar e invertir en proyectos que logren apalancar la mayor proporción de nuestros recursos en la parte baja del embudo mercadológico.
En un mercado donde las alianzas estratégicas y las coaliciones trascienden barreras y alcanzan todos los aspectos de la vida institucional de nuestro país, la alianza más importante que debemos buscar y pelear aguerridamente, es la alianza con nuestros consumidores. El 2009 fue el año de quienes supieron cimentar el vínculo con sus clientes, el 2010 será de aquellos que sepan construir lealtad sobre ese vínculo.
miércoles, 2 de diciembre de 2009
El consumidor cambió
Estudios comisionados por ampersand y realizados por Grupo IDM durante el 2008 y el 2009 revelaron la importancia de acercarse a los clientes y generar lealtad como una estrategia clave para su retención. En el estudio: “Evaluación, conocimiento y segmentación del mercado sobre la categoría de programas de lealtad” realizado en el 2008 se sentó la base de que:
• 62% de los encuestados cuenta con un programa de lealtad, y
• 77% considera relevante o muy relevante el contar con un programa de lealtad al escoger un producto o servicio
En el estudio: “Profundización sobre los principales hallazgos encontrados” realizado este 2009 se encontró que, de los consumidores que cuentan con un programa de lealtad:
• 90% utilizó su programa de lealtad en los últimos 12 meses
• 73% recomendaría o recomendaría mucho su programa de lealtad, y
• 28% incrementó el uso de, o buscó utilizar únicamente productos o servicios que cuentan con programa de lealtad
Adicionalmente, en respuesta a preguntas específicas de evaluación de los programas con los que contaban los encuestados, el estudio 2009 reveló que:
• 48% tiene apego a la marca que ha demostrado por la resistencia a mudarse con un competidor o adquirir productos de la competencia
• 57% cada vez compra o utiliza con mayor frecuencia los productos de la marca
• 66% ha cambiado o recibido beneficios recientemente de su programa de lealtad, y
• 67% tiene intención de comprar productos o servicios de la compañía con la que tiene programa de lealtad
Con respecto a la preferencia de uso, el mismo estudio reveló acerca de los miembros de programas de lealtad que:
• 33% gusta de cambiar sus puntos por productos o servicios para si
• 49% prefiere esperar a acumular para productos que requieren más o menos puntos, y
• 93% quiere redimir sus puntos por beneficios propios ya sea regalos, boletos de cine, etc. y no por recompensas en efectivo o “cashback”
Con cifras tan reveladoras como las anteriores, es claro que la preferencia de los consumidores en México se dirigió a beneficiar a aquellas empresas que se enfocaron en sus clientes.
• 62% de los encuestados cuenta con un programa de lealtad, y
• 77% considera relevante o muy relevante el contar con un programa de lealtad al escoger un producto o servicio
En el estudio: “Profundización sobre los principales hallazgos encontrados” realizado este 2009 se encontró que, de los consumidores que cuentan con un programa de lealtad:
• 90% utilizó su programa de lealtad en los últimos 12 meses
• 73% recomendaría o recomendaría mucho su programa de lealtad, y
• 28% incrementó el uso de, o buscó utilizar únicamente productos o servicios que cuentan con programa de lealtad
Adicionalmente, en respuesta a preguntas específicas de evaluación de los programas con los que contaban los encuestados, el estudio 2009 reveló que:
• 48% tiene apego a la marca que ha demostrado por la resistencia a mudarse con un competidor o adquirir productos de la competencia
• 57% cada vez compra o utiliza con mayor frecuencia los productos de la marca
• 66% ha cambiado o recibido beneficios recientemente de su programa de lealtad, y
• 67% tiene intención de comprar productos o servicios de la compañía con la que tiene programa de lealtad
Con respecto a la preferencia de uso, el mismo estudio reveló acerca de los miembros de programas de lealtad que:
• 33% gusta de cambiar sus puntos por productos o servicios para si
• 49% prefiere esperar a acumular para productos que requieren más o menos puntos, y
• 93% quiere redimir sus puntos por beneficios propios ya sea regalos, boletos de cine, etc. y no por recompensas en efectivo o “cashback”
Con cifras tan reveladoras como las anteriores, es claro que la preferencia de los consumidores en México se dirigió a beneficiar a aquellas empresas que se enfocaron en sus clientes.
jueves, 5 de noviembre de 2009
La clave del éxito de las compañías modernas
Seguramente has oído hablar de la “organización centrada en el consumidor”. El concepto propone colocar los deseos y preferencias del consumidor final como eje central de la organización.
Tomemos todas nuestras acciones y decisiones con base a lo que agrade y agregue valor a nuestro consumidor, propuesta acertada. Sin embargo, si hacemos todo por complacer a nuestro consumidor, ¿dónde debemos establecer la línea que separa nuestra buena voluntad del abuso de consumidores insaciables?
Puedes estar seguro que los consumidores siempre querrán el mejor producto, con la mayor calidad, al menor precio, con total adecuación a sus gustos y entregado con la máxima comodidad. Pero no solo eso, sino que adicionalmente, la definición de la calidad, precio, adecuación y comodidad serán muy diferentes de un cliente a otro. Bajo esta contextualización, ¿es realista pensar que el concepto de “organización centrada en el consumidor” es ejecutable en su más purista interpretación?
Un buen ejemplo para este tema y dejarlo claro, es hablar de un tema del que todos somos partícipes: los impuestos. Asumiendo que el gobierno pudiera adoptar una estrategia de ser “centrado en el consumidor”, ¿crees que todos estemos dispuestos a pagar lo mismo en impuestos? Más aún, ¿crees que todos estemos dispuestos a pagar cualquier impuesto? Pero eso si, todos, aún aquellos que forman parte de la economía informal de nuestro país y que no pagan impuestos, queremos tener buenos servicios, luz, agua, buenas calles, seguridad, etc., etc., etc. –independientemente de nuestra interpretación individual de los mismos.
Aunque de una manera menos imperante este mismo razonamiento lo aplicamos al consumo de cualquier producto o servicio. Sea un reproductor de música, un corte de pelo, o un automóvil, todos buscamos una solución a una necesidad que nos dé el mejor resultado y para ello nos suscribimos a una propuesta resultado de la experiencia y conocimiento del proveedor que elegimos.
La compañía moderna, para ser exitosa y viable en el largo plazo, debe reconocer y atender a los deseos y preferencias de los consumidores, por supuesto. Pero también debe reconocer que ser centrado en el consumidor no implica cumplir sus caprichos y deseos, sino entenderle y aplicar sus conocimientos y experiencia para proponer soluciones que sean prácticas, rentables y sostenibles en el tiempo. Además de los consumidores, hay otros grupos a los que la compañía se debe con igual nivel de compromiso: sus accionistas, sus empleados, y sus comunidades.
Las compañías debemos tener convicción en los productos y servicios que ofrecemos. Aún para la misma persona, su preferencia variará de acuerdo al momento o el propósito específico del uso. De manera que la fórmula perfecta no existe. Debemos avocarnos a producir nuestra mejor propuesta basadas en nuestro conocimiento y experiencia y de la manera más eficiente y rentable posible. La retroalimentación de nuestros consumidores es una parte básica de nuestros impulsores, pero también lo debe de ser los intereses de nuestros accionistas, empleados y comunidades. Como hombres de negocio, le debemos nuestra lealtad no solo a nuestros consumidores, sino a todos aquellos partícipes de nuestra empresa que garantizan la viabilidad a largo plazo de nuestro negocio.
Tomemos todas nuestras acciones y decisiones con base a lo que agrade y agregue valor a nuestro consumidor, propuesta acertada. Sin embargo, si hacemos todo por complacer a nuestro consumidor, ¿dónde debemos establecer la línea que separa nuestra buena voluntad del abuso de consumidores insaciables?
Puedes estar seguro que los consumidores siempre querrán el mejor producto, con la mayor calidad, al menor precio, con total adecuación a sus gustos y entregado con la máxima comodidad. Pero no solo eso, sino que adicionalmente, la definición de la calidad, precio, adecuación y comodidad serán muy diferentes de un cliente a otro. Bajo esta contextualización, ¿es realista pensar que el concepto de “organización centrada en el consumidor” es ejecutable en su más purista interpretación?
Un buen ejemplo para este tema y dejarlo claro, es hablar de un tema del que todos somos partícipes: los impuestos. Asumiendo que el gobierno pudiera adoptar una estrategia de ser “centrado en el consumidor”, ¿crees que todos estemos dispuestos a pagar lo mismo en impuestos? Más aún, ¿crees que todos estemos dispuestos a pagar cualquier impuesto? Pero eso si, todos, aún aquellos que forman parte de la economía informal de nuestro país y que no pagan impuestos, queremos tener buenos servicios, luz, agua, buenas calles, seguridad, etc., etc., etc. –independientemente de nuestra interpretación individual de los mismos.
Aunque de una manera menos imperante este mismo razonamiento lo aplicamos al consumo de cualquier producto o servicio. Sea un reproductor de música, un corte de pelo, o un automóvil, todos buscamos una solución a una necesidad que nos dé el mejor resultado y para ello nos suscribimos a una propuesta resultado de la experiencia y conocimiento del proveedor que elegimos.
La compañía moderna, para ser exitosa y viable en el largo plazo, debe reconocer y atender a los deseos y preferencias de los consumidores, por supuesto. Pero también debe reconocer que ser centrado en el consumidor no implica cumplir sus caprichos y deseos, sino entenderle y aplicar sus conocimientos y experiencia para proponer soluciones que sean prácticas, rentables y sostenibles en el tiempo. Además de los consumidores, hay otros grupos a los que la compañía se debe con igual nivel de compromiso: sus accionistas, sus empleados, y sus comunidades.
Las compañías debemos tener convicción en los productos y servicios que ofrecemos. Aún para la misma persona, su preferencia variará de acuerdo al momento o el propósito específico del uso. De manera que la fórmula perfecta no existe. Debemos avocarnos a producir nuestra mejor propuesta basadas en nuestro conocimiento y experiencia y de la manera más eficiente y rentable posible. La retroalimentación de nuestros consumidores es una parte básica de nuestros impulsores, pero también lo debe de ser los intereses de nuestros accionistas, empleados y comunidades. Como hombres de negocio, le debemos nuestra lealtad no solo a nuestros consumidores, sino a todos aquellos partícipes de nuestra empresa que garantizan la viabilidad a largo plazo de nuestro negocio.
jueves, 1 de octubre de 2009
Say ‘yes’ to loyalty rewards programs
Every American participates, on average, in four different loyalty rewards programs, just like in Canada and Europe. But there is still much to be done in Mexico, given that there are no formal measures in place for such programs.
It is difficult to systematically identify loyal consumers, but as history has shown, it can be done. Hence, creativity and sense of trade in Mexico should have developed several customer retention programs by now. A simple example of what does exist in our popular culture is the "pilóns" that have been offered at the time of closing a transaction to thank the customer for business and invite the customer to return.
In the contemporary era, there are those who have learned from the loyalty programs of 1896 founded by the Sperry & Hutchinson Company (S & H), marketer of stamps that were very popular in the United States in the 1930s.
Even now there are shops and supermarkets that use the stamps rewards system that are to be exchanged for gifts or merchandise.
However, since the creation of the stamp system, it wasn’t until May 1981 when American Airlines, with his powerful Saber reservation system launched the first program in the automated rewards world: AAdvantage frequent flyer miles, marking the birth of a new era of the loyalty programs.
AAdvantage created such an impact that in that same year, United Airlines, Delta and TWA introduced their own programs.
In January 1983, Holiday Inn launched the first hotel chain program, and just as it was for American Airlines, the competition reacted and Marriott introduced its program in November of that year.
The telecommunications industry followed suit in 1985 when AT&T introduced the first co-branded rewards card 1985. Then, the rental car industry followed in March 1987 with National’s rewards program.
What at one time was an ingenious but simple stamp program, eventually grew and now there are initiatives that reward consumers in virtually any industry and size of business anywhere the world.
Mexico, with no loyalty rewards programs
A survey by the American research company Colloquy conducted in 2007, revealed that the number of membership loyalty programs in the U.S. had an annual growth of 35.5% from 2000 to 2006, reaching 1.3 billion individual memberships in loyalty programs. This would mean that the average American household subscribes to approximately 12 loyalty programs, or that every American, regardless of age, participated in an average of four different programs.
Similarly, Canadian programs have reached up to 75% penetration of households. The same numbers have been repeated in other developed markets such as United Kingdom, Spain and Germany.
While Mexico does not yet have statistics that measure consumer loyalty, it is obvious that much work remains to be done in order to match the levels of success in other developed countries. Evidence of this can be seen in a simple and empirical comparison of the number of such programs in industries such as specialty shops, pharmacies, department stores, supermarkets, gas stations or restaurants. While in developed markets, these industries are considered key players in the loyalty programs market, in our country there exist only isolated or poorly structured emerging efforts that offer limited value for businesses and consumers.
Makeshift advisers
Unfortunately, this situation is exacerbated by the supply of loyalty consultants and solution providers —despite that fact that some players are incredibly professional and cutting-edge— there are many more unprepared advisers that lack any basic loyalty knowledge.
This has led to the relational gap —similar to the digital gap— where businesses and companies seeking dedicated and professional advice, gain access to knowledge and advice from real loyalty professionals.
While those who take initiative lightly, or do not research for loyalty consultants or suppliers, remain ignorant or even worse, many end up failing because of misinformation.
Therefore, development of loyalty programs to date in Mexico seems to be primarily occurring in the airline, hotel and financial services-based industries. And even in these industries, much of their participants do not rate the understanding and development of their initiatives very highly.
Despite the gloomy environment that the relational gap notes, from a strategic viewpoint, it also represents an extraordinary opportunity for those businesses and companies wishing to develop a loyalty program with dedication and professionalism. If you are willing to address the development of a loyalty initiative with the effort, investment and dedication it deserves, now is the best time to do so and gain a strategic position against the competition.
It is difficult to systematically identify loyal consumers, but as history has shown, it can be done. Hence, creativity and sense of trade in Mexico should have developed several customer retention programs by now. A simple example of what does exist in our popular culture is the "pilóns" that have been offered at the time of closing a transaction to thank the customer for business and invite the customer to return.
In the contemporary era, there are those who have learned from the loyalty programs of 1896 founded by the Sperry & Hutchinson Company (S & H), marketer of stamps that were very popular in the United States in the 1930s.
Even now there are shops and supermarkets that use the stamps rewards system that are to be exchanged for gifts or merchandise.
However, since the creation of the stamp system, it wasn’t until May 1981 when American Airlines, with his powerful Saber reservation system launched the first program in the automated rewards world: AAdvantage frequent flyer miles, marking the birth of a new era of the loyalty programs.
AAdvantage created such an impact that in that same year, United Airlines, Delta and TWA introduced their own programs.
In January 1983, Holiday Inn launched the first hotel chain program, and just as it was for American Airlines, the competition reacted and Marriott introduced its program in November of that year.
The telecommunications industry followed suit in 1985 when AT&T introduced the first co-branded rewards card 1985. Then, the rental car industry followed in March 1987 with National’s rewards program.
What at one time was an ingenious but simple stamp program, eventually grew and now there are initiatives that reward consumers in virtually any industry and size of business anywhere the world.
Mexico, with no loyalty rewards programs
A survey by the American research company Colloquy conducted in 2007, revealed that the number of membership loyalty programs in the U.S. had an annual growth of 35.5% from 2000 to 2006, reaching 1.3 billion individual memberships in loyalty programs. This would mean that the average American household subscribes to approximately 12 loyalty programs, or that every American, regardless of age, participated in an average of four different programs.
Similarly, Canadian programs have reached up to 75% penetration of households. The same numbers have been repeated in other developed markets such as United Kingdom, Spain and Germany.
While Mexico does not yet have statistics that measure consumer loyalty, it is obvious that much work remains to be done in order to match the levels of success in other developed countries. Evidence of this can be seen in a simple and empirical comparison of the number of such programs in industries such as specialty shops, pharmacies, department stores, supermarkets, gas stations or restaurants. While in developed markets, these industries are considered key players in the loyalty programs market, in our country there exist only isolated or poorly structured emerging efforts that offer limited value for businesses and consumers.
Makeshift advisers
Unfortunately, this situation is exacerbated by the supply of loyalty consultants and solution providers —despite that fact that some players are incredibly professional and cutting-edge— there are many more unprepared advisers that lack any basic loyalty knowledge.
This has led to the relational gap —similar to the digital gap— where businesses and companies seeking dedicated and professional advice, gain access to knowledge and advice from real loyalty professionals.
While those who take initiative lightly, or do not research for loyalty consultants or suppliers, remain ignorant or even worse, many end up failing because of misinformation.
Therefore, development of loyalty programs to date in Mexico seems to be primarily occurring in the airline, hotel and financial services-based industries. And even in these industries, much of their participants do not rate the understanding and development of their initiatives very highly.
Despite the gloomy environment that the relational gap notes, from a strategic viewpoint, it also represents an extraordinary opportunity for those businesses and companies wishing to develop a loyalty program with dedication and professionalism. If you are willing to address the development of a loyalty initiative with the effort, investment and dedication it deserves, now is the best time to do so and gain a strategic position against the competition.
martes, 15 de septiembre de 2009
The secret weapon of successful business cases
The secret weapon
What helped increase the original Aeromexico purchase offer by more than 2.5 times? The answer: its customer base and brand loyalty. The buyers know this and are preparing to do what is takes to retain them.
In past months we have witnessed one of the most controversial chapters in the history of the Mexican business community: the process of acquiring the country's largest airline, Aeromexico. The players were Saba Group, a group of businessmen led by José Luis Barraza, and Grupo Mexicana.
The outcome was a public purchase conducted through, what many describe, as a process riddled with irregularities that left a bitter taste for the bidders and the public spectators--a very bad precedent for future bids.
There are many reasons why the sale of Aeromexico captured the interest of political and business communities in Mexico and around the world. One reason is that it affected the transportation and communication industries —which are key in the development and competitiveness of Mexico— but also threatened value and competitive strategies, and even national security. However, there was one point —a very critical point— in the deal that was overlooked by all: the airline’s customer base and brand loyalty.
The basis of it all
When you think of Aeromexico’s assets, you immediately think of its fleet of planes —which individually cost hundreds of millions of dollars, its airport and landing equipment, hangars, sales offices, and even its flagship Premier lounges. However, were these the assets that attracted the final $250 million for the acquisition of the airline?
The first offer made on August 22 by Mr. Saba —based on what they defined as a thorough valuation of the airline’s assets— didn’t even reach $100 million.
So what helped increase the original purchase offer by at least 250%? Without doubt it was its most important asset, both quantitatively and qualitatively: its strong customer base, which was forged almost 20 years ago through its Premier Club and Aeromexico-branded American Express card.
The Premier Club customer base is an important one because it represents a segment of people that travel more frequently than most. But most important, in theory at least, is that the airline has what I call the three basic rules to ensure customer loyalty:
a) Client information: Who are they, where do they travel, with whom and how much time does each spend on the road?
b) A process to exploit such information and thereby deduce patterns and significance of services and benefits for customers.
c) Professional and efficient communication with the client.
It is obvious that Aeromexico has executed the basics well and has reaped its rewards. This is clearly reflected in the number of members that benefit from Premier Club offers and services. So much so that today its customer base can be divided into two groups: Premier Club (CP)-only customers and those who are members of the club by virtue of Aeromexico-branded American Express card (CP/AE).
How much then is the Premier Club client base worth? It is very hard to say. It alone does not have much value, but with CP/AE it is very valuable. So much that Dario Celis reported that American Express was afraid that the airline would end up in the hands of the group backed by Banamex and lose its relationship with the clients.
The road starts here
Now that the airline is under the command of José Luis Barraza, will American Express’ fear materialize? Will the new management know how to approach and retain program customers and partners? How patient will the new administration be?
In the case that CP/AE clients are migrated to Banamex, will they be willing to change the method of payment recommended by Aeromexico? How many of them will end their relationship with the airline?
Only time will tell. Yet, we can be certain that Aeromexico, American Express and Banamex know what they can gain and lose in this new chapter and in the interesting battle in which the winner will not be defined by an opinion from the Federal Communications Commission, but by what they define as the continuous and recurring consumer preference. In other words, customer loyalty.
You can be in touch with us through: mailto:info@8ampersand.com
What helped increase the original Aeromexico purchase offer by more than 2.5 times? The answer: its customer base and brand loyalty. The buyers know this and are preparing to do what is takes to retain them.
In past months we have witnessed one of the most controversial chapters in the history of the Mexican business community: the process of acquiring the country's largest airline, Aeromexico. The players were Saba Group, a group of businessmen led by José Luis Barraza, and Grupo Mexicana.
The outcome was a public purchase conducted through, what many describe, as a process riddled with irregularities that left a bitter taste for the bidders and the public spectators--a very bad precedent for future bids.
There are many reasons why the sale of Aeromexico captured the interest of political and business communities in Mexico and around the world. One reason is that it affected the transportation and communication industries —which are key in the development and competitiveness of Mexico— but also threatened value and competitive strategies, and even national security. However, there was one point —a very critical point— in the deal that was overlooked by all: the airline’s customer base and brand loyalty.
The basis of it all
When you think of Aeromexico’s assets, you immediately think of its fleet of planes —which individually cost hundreds of millions of dollars, its airport and landing equipment, hangars, sales offices, and even its flagship Premier lounges. However, were these the assets that attracted the final $250 million for the acquisition of the airline?
The first offer made on August 22 by Mr. Saba —based on what they defined as a thorough valuation of the airline’s assets— didn’t even reach $100 million.
So what helped increase the original purchase offer by at least 250%? Without doubt it was its most important asset, both quantitatively and qualitatively: its strong customer base, which was forged almost 20 years ago through its Premier Club and Aeromexico-branded American Express card.
The Premier Club customer base is an important one because it represents a segment of people that travel more frequently than most. But most important, in theory at least, is that the airline has what I call the three basic rules to ensure customer loyalty:
a) Client information: Who are they, where do they travel, with whom and how much time does each spend on the road?
b) A process to exploit such information and thereby deduce patterns and significance of services and benefits for customers.
c) Professional and efficient communication with the client.
It is obvious that Aeromexico has executed the basics well and has reaped its rewards. This is clearly reflected in the number of members that benefit from Premier Club offers and services. So much so that today its customer base can be divided into two groups: Premier Club (CP)-only customers and those who are members of the club by virtue of Aeromexico-branded American Express card (CP/AE).
How much then is the Premier Club client base worth? It is very hard to say. It alone does not have much value, but with CP/AE it is very valuable. So much that Dario Celis reported that American Express was afraid that the airline would end up in the hands of the group backed by Banamex and lose its relationship with the clients.
The road starts here
Now that the airline is under the command of José Luis Barraza, will American Express’ fear materialize? Will the new management know how to approach and retain program customers and partners? How patient will the new administration be?
In the case that CP/AE clients are migrated to Banamex, will they be willing to change the method of payment recommended by Aeromexico? How many of them will end their relationship with the airline?
Only time will tell. Yet, we can be certain that Aeromexico, American Express and Banamex know what they can gain and lose in this new chapter and in the interesting battle in which the winner will not be defined by an opinion from the Federal Communications Commission, but by what they define as the continuous and recurring consumer preference. In other words, customer loyalty.
You can be in touch with us through: mailto:info@8ampersand.com
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