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Loyalty Over Gold: Stop unthinking loyalty cards issuing!

5th year of the annual conference on attracting and retaining loyal customers was held on September 24, 2014 in Prague Impact HUB.

More than 80 participants took note of practical case studies from the Czech market, were inspired by the keynote speaker Bram Alkema from the Netherlands or participated in discussion.

The introductory speech What is the current price of loyalty? By Martin Mravec, GfK brought the surprising data comparing loyalty means for the company management and what for the customer. In most cases a customer does not care about loyalty, every fourth customer is leaving to the competition, and only 8% of the established loyalty programs succeed. It means that loyalty cards are often a waste of billions into the air. The reasons why these programs do not work are more: the new technology increased tensions in relations of the customer and the company; every shopper in the Czech Republic has 5 cards in average (20 in the USA); Discount is not an appropriate strategy for obtaining loyalty; 60% of customers indicate that the program is incomprehensible or contains barriers for customers; obtained big data about customers remain unnoticed. „And how to return clients back and gain their loyalty of gold?" According to GfK it is important to realize that loyalty does not mean a loyalty program. Customer loyalty should be incorporated into company strategy with regard to changing customers who use digital technology and want to communicate with the brand in real time.

Tomáš Matějček, owner of the company Megapixel, primarily offering "to be a partner of customers in their photo-life", emphasises: "Giving out discounts in loyalty program is a waste of margins. Loyalty for me is to create such high-quality service and customer care that the customers are returning and recommending us." Megapixel uses the program Customer Gauge that helps to receive feedback from customers and can quickly respond to their comments. "The pressure to create satisfied customers pay off," notes Matějček. What works best: to surprise customers, to lead dialogue with them and to resolve problems quickly. To be successful, the whole system is built on loyal employees who share the corporate culture and are evaluated, inter alia, according to how are the customers satisfied with them. At present, Megapixel communicates on a regular basis with 60 000 customers.

The company Brand Embassy represented by Filip Horký specializes in customer care on social networks, which some companies underestimate or can't handle. Especially because the number of customer queries and complaints on social networks duplicates every year. Social networks are often in the care of marketers who are not trained, prepared and motivated to respond to comments on weekends or at night. Filip Horký presented three case studies to demonstrate the slow and imperfect response by companies to customer complaints, especially the young generation, which today does not hesitate to create a hell on Facebook to unresponsive companies: "The customer care should be good and friendly, its content should be relevant and response to queries and complaints should be immediate".

Using the frequent flyer program for optimizing the sales network Teta, that was the topic of David Vejtruba, Marketing Director p.k. Solvent and Ondřej Tomas, CleverMaps.cz. Ondřej Tomas introduced location and data analysis tool as the combination of customer loyalty data and external data related to their location. "Loyalty can be understood as the stimulation of the production of oxytocin, the hormone of love, loyalty and trust. We have to behave to customers with consideration and lovingly. To do it well, we need to know something about them." Practical use of this analysis was illustrated by David Vejtruba on the program, in which Teta Club involved 2 million people in a retail chain with 770 outlets and million transactions each month. "We have a lot of data and need to get information from them. With the help of data we simulate and analyse optimization of the network of stores, the appropriate formats, the interaction between the stores, the catchment area of leaflets and other local activities.“ They intend to develop Loyalty program further and to transform it so that it represents not only discount events.

The final speech and a summary of the morning part were made by Daniel Svoboda, commercial Director of Milos Group. He presented the 7 practical advices on how to get the love of the customer. He recommended: "You need to understand the customer, there is no us and them. Think about your business as if you were your customer! Loyalty and satisfaction are two different things. The real loyalty is more than experience. The customer becomes loyal when he gets something unexpectedly positive – customers will love you for it. And dialogue with the customer is the most valuable thing you can give him. "

In many ways surprising and interactive key contribution of the Dutch marketing specialist Bram Alkema was a demonstration of a top management mind-set and perspective of the customer as a sense of our business. Bram, inspired by "God" of marketing management, Peter Drucker, illustrated what is managerial decision-making: "Management means doing consistently mainly 2 things: marketing and innovation. Everything else is just business administration."

The right marketing manager must be constantly thinking about new business models, because every business model is dying out over time. The essence of marketing thinking is to invent new things, not to make the CRM or sales promotion. To do strategy means to be one step ahead of the need to be efficient. "Always ask yourself: How can I create new customers? Persuade them, be always a step ahead, keep them and fight together for your brand!"

Bram talked also about refertising (a combination of referring and advertising), the way how to make customers to talk about you and advertise you based on good experience with you. "Customer satisfaction rises with your innovating character. Copying the competition is a waste of money. To build a new business model or loyalty program costs much less than to transform the old one. And the best is to come up with a business model that has already a built-in loyalty program." As an example Bram mentioned the company Gillette, which has developed warheads for high quality razors... Customers are thus motivated to buy new razors for this head repeatedly.

The afternoon discussion forum focused on what is and what is not an activity to promote loyalty. It was moderated by Robert Janča, consultant at Starlights and the participants were the following retailers: Martin Lakomý, Alza, Eva Nemčková, Feedo, Daniel Novotný, Penny Market, Steffen R. Saemann, Tchibo and Lukáš Tatranský, Marks & Spencer.

Martin Lakomý of Alza.cz, the e-commerce company that achieves 20% growth annually on the Czech market, has shared his recipe for success: "It's important to keep the image of an innovator and be 2 steps ahead of the competition. And also to offer always something extra. Not a discount, but the gift as a surprise, the expansion of retail network to be closer to customers, and the customer support 24 hours a day, 7 days a week."

In the second part of the discussion there were five panellists representing the market of services: Monika Fenyková, ProMoPro, Andrea Nuttall, Vodafone, Přemysl Rubeš, Bileto.cz, Katarína Rusnáková, BlueLink and Jaroslav Vavřina, iBod. The latter immediately brought a bit of provocation into the discussion: "Loyalty is a fiction of marketers. I don't need to be faithful to the manufacturers of rolls... It's about the ability to sell more. And that happens when well behave to customers, when I share the same values as they have." According to Katarína Rusnáková originality and customer service are those values customers seek for. Andrea Nuttall from Vodafone agreed with her: "in principle, our company does not have and will not have anything like the loyalty program. But we keep customers via the excellent relations and good service".

The end of the discussion turned to the issue of research data, according to which only 55% of employees believe that their company/brand offers the right value and therefore are not able to offer their services properly to customers. All agreed on the fact that the loyalty of employees, their motivation and sharing of corporate values, are the best prerequisite for obtaining and retaining loyal customers.


For further information about the conference contact:
Barbora Krásná, Partner, Blue Events
Tel.: +420 222 749 841, e-mail: barbora.krasna@blueevents.eu

Media contact:
Aneta Zímová, Blue Events
Tel.: +420 222 749 841, e-mail: aneta.zimova@blueevents.eu

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