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Priming the Pump: Driving Loyalty with Targetingand PositioningIt’s no secret that in many categories brand loyalty is dec...
Priming the Pump: Driving Loyalty with              Targeting and PositioningKevin J. Clancy, Ph.D.ChairmanCopernicus Mark...
Request an e-copy of ….                          To request a PDF, send an email to                          ami.bowen@cop...
“CMOs see customer loyalty as their top priority in the digital era.”                           4
Net Promoter Scores—Allegedly the only metric a company needs                                                Score        ...
Customer Loyalty is a Priority; With Good Reason….    The highest NPS recorded across all brands and industry sectors is 8...
These Findings are Scary!    The lowest NPS recorded across all brands and industry sectors was -21%.     The lowest NPS r...
Marketers tend to agree that fostering loyalty among current customers andMarketers tend to agree that fostering loyalty a...
Happiness is Contagious           Customers that express a high level of satisfaction….    Have a lower             A high...
The Real Ultimate Question                                    How do you integrate growing                                ...
Give All Your Customers a New CarFind More of the Customers You WANT to Keep             11
Businesses Benefit When They Keep PROFITABLE Customers      Our own research has repeatedly found the relationship between...
A Profitable Customer Target Decreases the Cost of Acquisition AND Retention                            Marketing Costs Pe...
Get on the Right TrainFind More Profitable Customers, Particularly ThosePredisposed to be Loyal to Your Brand             ...
“If you’re on the wrong train, every stop is the wrong stop.” “If you’re on the wrong train, every stop is the wrong stop....
A Better Approach: Profit-Directed Segmentation                A systematic process should be employed from start to finis...
10 Examples of Profit- and Loyalty-Related Criteria  •   Current spending patterns                                        ...
Identify Financially Optimal Market Targets For a New American Express Payment     Vehicle For Women                      ...
Bring Back That Lovin’ Feelin’Connect Customers to Your Brand              19
The Quest for the Emotional Connection Copernicus and Greenfield online surveyed consumers on their “personal or emotional...
Brands build a connection with customers by solving their problems withproblems or services.The bigger the problem a brand...
The More Serious a Customer’s Problems, the Bigger the Customer ‘s Response    Effect of Implementing a                   ...
Positioning Strategy – “Motivating Power”    A state-of-the-science way to measure buyer problems    Traditional “importa...
We’re Looking for a Positioning that is: Highly Motivating to our Target; Our Brand Has It; The EnemyDoesn’t              ...
Illustrative BSM for an American Express Payment Vehicle for Women                                        Perceptions of A...
An example of poor positioning....               26
Illustrative BSM for Coors Beer                                        Perceptions of AMEX versus MASTERCARD              ...
Don’t Just Fill the Funnel—Use Your Marketing Strategy to Prime the Pump Start building brand loyalty from the very beginn...
Questions?    29
Kevin J. Clancy, Ph.D., Chairman        (617) 449-4200          Kevin.Clancy@copernicusmarketing.com
Boston, MA / (617) 449.4200Thank you!   Norwalk, CT / (203) 831.2370                           http://twitter.com/marketin...
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Aquent/AMA Webcast: Priming the Pump: Driving Loyalty with Targeting and Positioning

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It’s no secret that in many categories brand loyalty is declining faster than the price of Facebook’s stock. Kevin Clancy believes poor targeting and a lack of consistent, compelling positioning are major reasons so many companies struggle with connecting customers to their brand.

In this webcast, Kevin will outline a process that considers profit-related criteria such as retention potential, level of satisfaction with current brand, likelihood to try or usage of a competitor’s brand, and problem potential when assessing the value of current and prospective customers. He will also explain the relationship between the magnitude of the problem a brand solves for a customer and market response in the form of sales and advocacy.

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Transcript of "Aquent/AMA Webcast: Priming the Pump: Driving Loyalty with Targeting and Positioning "

  1. 1. Priming the Pump: Driving Loyalty with Targetingand PositioningIt’s no secret that in many categories brand loyalty is declining faster than theprice of Facebook’s stock. Kevin Clancy believes poor targeting and a lack ofconsistent, compelling positioning are major reasons so many companiesstruggle with connecting customers to their brand.In this webcast, Kevin will outline a process that considers profit-relatedcriteria such as retention potential, level of satisfaction with current brand,likelihood to try or usage of a competitor’s brand, and problem potential whenassessing the value of current and prospective customers. He will alsoexplain the relationship between the magnitude of the problem a brand solvesfor a customer and market response in the form of sales and advocacy.
  2. 2. Priming the Pump: Driving Loyalty with Targeting and PositioningKevin J. Clancy, Ph.D.ChairmanCopernicus Marketing Consulting and ResearchNovember 15, 2012
  3. 3. Request an e-copy of …. To request a PDF, send an email to ami.bowen@copernicusmarketing.com 3
  4. 4. “CMOs see customer loyalty as their top priority in the digital era.” 4
  5. 5. Net Promoter Scores—Allegedly the only metric a company needs Score 9 -10s Less 0 - 6s = Net Promoter Score 5
  6. 6. Customer Loyalty is a Priority; With Good Reason…. The highest NPS recorded across all brands and industry sectors is 83%. The highest NPS recorded across all brands and industry sectors is 83%. 2012 Top Net Promoter Scores Across Measured Industries “Companies with the most efficient growth engines operate with an NPS of 50 to 80. The average firm sputters along at an NPS of 5 to 10—in other words, their Promoters barely outnumber their Detractors. Many firms—and some entire industries—have negative Net Promoter Scores.”* *Satmetrix
  7. 7. These Findings are Scary! The lowest NPS recorded across all brands and industry sectors was -21%. The lowest NPS recorded across all brands and industry sectors was -21%. 2012 Lowest Net Promoter Score Industry Benchmark Mediacom Wachovia American Airlines -25% -20% -15% -10% -5% 0% 7
  8. 8. Marketers tend to agree that fostering loyalty among current customers andMarketers tend to agree that fostering loyalty among current customers andmotivating advocacy behaviors is an untapped opportunity to improve profitability.motivating advocacy behaviors is an untapped opportunity to improve profitability. Acquiring a new Over a 5 year Businesses whichcustomer can cost period customer boosted6 to 7 times more attrition rates customer than retaining an could reach as high retention rates by existing customer. as 50% if as little as 5% customers are saw increases in ignored. their profits ranging from 5% to a whopping 95% 8
  9. 9. Happiness is Contagious Customers that express a high level of satisfaction…. Have a lower A higher likelihood A great chance likelihood of of repeat purchases they’ll enhanceswitching away from marketing activities you 9
  10. 10. The Real Ultimate Question How do you integrate growing loyalty and advocacy into your marketing strategy to take advantage of this untapped First Purchase opportunity? Satisfaction Ongoing Loyalty Advocacy 10
  11. 11. Give All Your Customers a New CarFind More of the Customers You WANT to Keep 11
  12. 12. Businesses Benefit When They Keep PROFITABLE Customers Our own research has repeatedly found the relationship between customer Our own research has repeatedly found the relationship between customer retention and profitability to be curvilinear because the costs of keeping retention and profitability to be curvilinear because the costs of keeping some customers exceeds their value to the brand or business. some customers exceeds their value to the brand or business. High $$$ Profitability($ Sales Less Costs) Low $ 0% 50% 100% Customer Retention
  13. 13. A Profitable Customer Target Decreases the Cost of Acquisition AND Retention Marketing Costs Per Loyal Customer* Undifferentiated All A Good An Optimal Market Prospects Target Target Private Banking $50,000+ $12,100 $6,300 $3,500 Software Services 1,000+ 644 357 216 Automobile Dealerships 1,000+ 325 150 99 Utility Companies 600+ 417 132 75 Personal Computers 300+ 266 155 83 Credit Cards 200+ 102 66 39 Packaged Goods 60+ 43 20 9 *These figures are based on a small number of cases in each product category and hence are meant to be illustrative rather than definitive. 13
  14. 14. Get on the Right TrainFind More Profitable Customers, Particularly ThosePredisposed to be Loyal to Your Brand 14
  15. 15. “If you’re on the wrong train, every stop is the wrong stop.” “If you’re on the wrong train, every stop is the wrong stop.” 15
  16. 16. A Better Approach: Profit-Directed Segmentation A systematic process should be employed from start to finish Create Hundreds of Ways to Segment Undertake a the Market projectable • Advocacy survey and test Enter into Evaluate • Attitudes and Values all of the ways taxonomic different • Decision-making of segmenting analysis (e.g. solutions using • Motivations the market neural network, statistical, • Brand Perceptions latent class, against managerial and • Buying Behavior proprietary • Personality Traits rigorous, profit- financial criteria and loyalty- cluster) • Media Profiles • Demographics related criteria • Lifestyles to identify key •Internet Behavior drivers of value. • Political Factors • Job Descriptions • Personal Optimism • Social Media Profiles 16
  17. 17. 10 Examples of Profit- and Loyalty-Related Criteria • Current spending patterns All can be • Price insensitivity used in • Pre-disposed to be loyal to the brand algorithms to • Problems you can solve predict • Satisfaction with current brand profitability • Switching potential for each respondent • Personal influence in a survey • Social sharing propensity and power and every • Advocacy for your brand target group • Inexpensive to reach and engage identified 17
  18. 18. Identify Financially Optimal Market Targets For a New American Express Payment Vehicle For Women ROI % of All % of % of Index Prospects Current Revenues Potential ProfitsYoung Upand Comers 217Over 50’sSuperMoms 100 34CarefulSpenders 44 18
  19. 19. Bring Back That Lovin’ Feelin’Connect Customers to Your Brand 19
  20. 20. The Quest for the Emotional Connection Copernicus and Greenfield online surveyed consumers on their “personal or emotional connection with their brand” across a variety of categories Only 25% on average reported even a “moderate” emotional connection to a brand Less than 10% on average claim a “strong” connection An emotional connection is more readily formed in certain product categories – Colas (39%) – Beer (37%) – PCs (33%) I can’t identify emotionally with any brand of anything… – Coffee (31%) 20
  21. 21. Brands build a connection with customers by solving their problems withproblems or services.The bigger the problem a brand solves, the bigger the emotional—and market—response. 21
  22. 22. The More Serious a Customer’s Problems, the Bigger the Customer ‘s Response Effect of Implementing a Crush Marketing Solution Competitors 100 Take Significant Share 50 Modest Negligible Effect Zero Effect Effect 0 None Small Moderate Large Enormous Magnitude of the Problem 22
  23. 23. Positioning Strategy – “Motivating Power” A state-of-the-science way to measure buyer problems  Traditional “importance” ratings overstate rational and pro-social responses  “Derived importance” is interesting, but also has flaws (such as failing to detect the influence of price-of-entry features)  Employ a unique three-dimensional approach “Dream Detection” “Problem Detection” “Brand Preference Detection” Regression of brand ratings on Self-reported in the Desires versus satisfaction with brand preference questionnaire on an 11-point brand used most often desirability scale Motivating Power Weighted Average of the Three Measures (Computed for each attribute / benefit for each respondent) A far better approach to measuring problems than any conventional methodology 23
  24. 24. We’re Looking for a Positioning that is: Highly Motivating to our Target; Our Brand Has It; The EnemyDoesn’t Perceptions of Our Brand versus Competitor Perceptions of Our Brand versus Competitor Brand Strategy Brand Strategy Matrix Matrix Excellent: Could Acceptable, But We are Superior Not Be better Could Be Better Unacceptable We’re Inferior 11 44 22 33 66 55Motivating MotivatingPower of Power ofAttribute/ Attribute/ Benefit Benefit 77 Value of Strategy ranked from 11 highest to 77 lowest
  25. 25. Illustrative BSM for an American Express Payment Vehicle for Women Perceptions of AMEX versus MASTERCARD Perceptions of AMEX versus MASTERCARD Brand Strategy Brand Strategy Matrix Matrix Excellent: Could Acceptable, But We are Superior Not Be better Could Be Better Unacceptable We’re Inferior 11 44 22 33 66 55Motivating MotivatingPower of Power ofAttribute/ Attribute/ Benefit Benefit 77 Value of Strategy ranked from 11 highest to 77 lowest
  26. 26. An example of poor positioning.... 26
  27. 27. Illustrative BSM for Coors Beer Perceptions of AMEX versus MASTERCARD Perceptions of AMEX versus MASTERCARD Brand Strategy Brand Strategy Matrix Matrix Excellent: Could Acceptable, But We are Superior Not Be better Could Be Better Unacceptable We’re Inferior 11 44 22 33 66 55Motivating MotivatingPower of Power ofAttribute/ Attribute/ Benefit Benefit 77 Value of Strategy ranked from 11 highest to 77 lowest
  28. 28. Don’t Just Fill the Funnel—Use Your Marketing Strategy to Prime the Pump Start building brand loyalty from the very beginning of the marketing process. • Who are you targeting? – Are they profitable? – Are they predisposed to stay loyal to your brand? • How are you motivating them to love your brand? – How big a problem is your brand, product, or service solving for your target? – How feasible is it to deliver on your positioning strategy in a way that will foster loyalty? – Are you working hard to build an emotional connection between your customers and your brand? 28
  29. 29. Questions? 29
  30. 30. Kevin J. Clancy, Ph.D., Chairman (617) 449-4200 Kevin.Clancy@copernicusmarketing.com
  31. 31. Boston, MA / (617) 449.4200Thank you! Norwalk, CT / (203) 831.2370   http://twitter.com/marketingfrayer copernicusmarketing.com
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