The OfficeMax Experience in México …

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OfficeMax México – Customer Loyalty Programs. Programas de Lealtad.

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The OfficeMax Experience in México …

  1. 1. CALA 2007 OfficeMax’s Journey into Loyalty
  2. 2. <ul><li>Ricardo Martinez </li></ul><ul><li>Marketing Manager </li></ul><ul><li>OfficeMax Mexico </li></ul><ul><li>Mexico City </li></ul>
  3. 3. Agenda <ul><li>OfficeMax Mexico Overview </li></ul><ul><li>Steps to developing a program </li></ul><ul><li>MaxPuntos Overview </li></ul><ul><li>What we are learning </li></ul><ul><li>Where will the program go </li></ul><ul><li>Incrementa/SHC Direct </li></ul><ul><li>Questions & Answers </li></ul>
  4. 4. OfficeMax Mexico <ul><li>Established 1996 </li></ul><ul><li>Retail, Online, Catalog Sales </li></ul><ul><li>66 stores and growing </li></ul><ul><li>Presence in all major Mexico cities </li></ul>
  5. 5. Steps to a formal program <ul><li>Understand the market </li></ul><ul><li>Understand customer perception of our market place </li></ul><ul><li>Establish Goals </li></ul><ul><li>Examine ROI </li></ul><ul><li>Construct a program </li></ul>
  6. 6. Mexican Office Products Market <ul><li>Independent Corner Paper and Copy stores (Papelerias) </li></ul><ul><li>“ Big Box” retailers taking customers from both independents and specialty office products chain </li></ul><ul><li>No clear customer loyalty to any supplier </li></ul>
  7. 7. Mexican Office Products Market from the Customer Perspective <ul><li>Mid Sized Business </li></ul><ul><li>Administered Programs/Planning </li></ul><ul><li>Tend to drive minimum and maximum inventories </li></ul><ul><li>Stock piling </li></ul><ul><li>Mostly Structured </li></ul><ul><li>Frequent contact with supplier, but driven remotely or sometimes through 3rd parties </li></ul><ul><li>Micro & Small Business </li></ul><ul><li>Newly emerging/Instable </li></ul><ul><li>Little planning </li></ul><ul><li>Aware of needs/rapidly changing </li></ul><ul><li>Mostly Improvised </li></ul><ul><li>More frequent contact with suppliers, mostly personal or direct </li></ul>Customer behavior with office products and paper
  8. 8. Mexican Office Products Market from the Consumer Perspective <ul><li>In general, tend to establish a convenience and operationally based relationship with suppliers </li></ul><ul><li>There is little loyalty to any particular suppliers </li></ul><ul><li>Buying Influencers </li></ul><ul><li>By Price </li></ul><ul><li>By Selection </li></ul><ul><li>By offer or promotion </li></ul><ul><li>By location </li></ul><ul><li>By specialty </li></ul><ul><li>By Infrastructure support </li></ul><ul><li>By customer service </li></ul><ul><li>By Advertising </li></ul><ul><li>By Image </li></ul><ul><li>By Quality </li></ul><ul><li>By Strategy & Negotiations </li></ul>Business Market Office Products & Paper Suppliers Cold/Distant Connection – merely functional
  9. 9. Goals Established <ul><li>Learn customer purchasing behavior </li></ul><ul><li>Learn appropriate customer segmentation basis </li></ul><ul><li>Identify purchasing customer and connect to business entity to establish personal relationship with buyer </li></ul><ul><li>Establish a communication structure to increase average ticket and frequency </li></ul><ul><li>Build a defense against competition and establish customer loyalty to OfficeMax </li></ul><ul><li>Establish an immediately available benefit associated with all channels of customer interaction </li></ul>
  10. 10. Where to begin? <ul><li>Successful program in U.S. – MaxPerks </li></ul><ul><ul><li>Focused on small business and teachers </li></ul></ul><ul><ul><li>Program structure not transferable to Mexican market place </li></ul></ul><ul><li>Business customer focus equally important in Mexico, micro, small and mid-size </li></ul><ul><li>What benefits will work to drive business customer loyalty, and how can we establish a communication relationship with these customers </li></ul><ul><li>Need to identify the best segmentation scheme, and identify other potential customer segments outside of business customers </li></ul><ul><li>Keep the program basic and learn first </li></ul>
  11. 11. Program Challenges <ul><li>In house database of business contacts aging, and focused only on business name not person making purchases </li></ul><ul><li>U.S. Program name didn’t translate </li></ul><ul><li>Program cannot rely principally on direct mail communication as in the U.S. </li></ul><ul><li>POS system limitations </li></ul><ul><li>Integrate private label credit card program </li></ul><ul><li>Integrate all purchasing channels </li></ul><ul><li>Build a solution easy for the customer and not so easily replicated by competitors </li></ul><ul><li>Protect redemptions against product returns </li></ul>
  12. 12. Planning and Implementation <ul><li>Engaged with SHC Direct/Inrementa </li></ul><ul><li>Develop program structure </li></ul><ul><li>Model costs and ROI projections </li></ul><ul><li>IT Planning and Implementation </li></ul><ul><li>Create Program Branding </li></ul><ul><li>Build Pilot Plan </li></ul><ul><li>Refine Launch plan </li></ul><ul><li>Launch program chain wide </li></ul>
  13. 13. Program Structure <ul><li>Relate Points to Pesos </li></ul><ul><ul><li>Points for every purchase (1 point for every 100 pesos) </li></ul></ul><ul><ul><li>Double points in OfficeMax brand products (2 points for every 100 pesos </li></ul></ul><ul><ul><li>Triple points for CopyMax purchases (3 points for every 100 pesos </li></ul></ul><ul><li>Show earnings and balance on receipt </li></ul><ul><li>Allow members to pay in points in real time </li></ul>
  14. 14. Introducing MaxPuntos <ul><li>Points earned with every transaction </li></ul><ul><li>Enroll to use your points </li></ul><ul><li>Redeem real time, in store </li></ul><ul><li>Receive additional benefits for membership </li></ul><ul><li>Simple and easy communication </li></ul>
  15. 15. Poster área de cajas y CopyMax El poster se coloca en el escritorio de cajas y CopyMax
  16. 16. Manteleta CopyMax La manteleta es de uso exclusivo de CopyMax y coloca sobre las mesas de espera o en el escritorio del área.
  17. 17. Poster / Manteleta En CopyMax debemos instalar el poster y la manteleta juntos para tener un impacto mayor
  18. 18. Tensor para áreas de filas y muebles Los 4 tensores que se enviaron a cada tienda se instalan cada uno en fila de cajas, fila de CopyMax, área de muebles y el último movible entre las áreas de electrónica y cómputo.
  19. 19. Stopper para promociones de dobles puntos Los stoppers se utilizan para delimitar el área de productos marcas OfficeMax (OfficeEditions, MaxBrite, OfficeMax) y promover dobles puntos en su compra.
  20. 20. Zona Dobles Puntos El objetivo del stopper es resaltar productos de marca propia utilizando adicionalmente un impreso en el piso que dice “aquí se ganan dobles puntos” (cont.) Stopper dobles puntos “ Aquí se ganan dobles puntos”
  21. 21. Program Introduction <ul><li>Monterrey Pilot August – November 2006 </li></ul><ul><li>Phased Launch December & January 2007 </li></ul>
  22. 22. Why pilot the program first? <ul><li>Limited & isolated market area with multiple locations </li></ul><ul><li>Solve operational bugs before system wide launch </li></ul><ul><li>Learn associate reaction </li></ul><ul><li>Learn customer reaction </li></ul><ul><li>First line analysis to validate model </li></ul><ul><li>Some operational issues identified, but no structural program changes made </li></ul>
  23. 23. What are we learning? <ul><li>All of our goals are being realized </li></ul><ul><ul><li>Learn customer purchasing behavior </li></ul></ul><ul><ul><ul><li>We are seeing differences in category purchase across program enrollees </li></ul></ul></ul><ul><ul><li>Learn appropriate customer segmentation basis </li></ul></ul><ul><ul><ul><li>Business still important, emerging household segment </li></ul></ul></ul><ul><ul><li>Identify purchasing customer and connect to business entity to establish personal relationship with buyer </li></ul></ul><ul><ul><ul><li>We are enrolling the actual buyer connected to the business </li></ul></ul></ul>
  24. 24. What are we learning? <ul><li>All of our goals are being realized </li></ul><ul><ul><li>Establish a communication structure to increase average ticket and frequency </li></ul></ul><ul><ul><ul><li>We have a large percentage of the database providing email addresses </li></ul></ul></ul><ul><ul><li>Build a defense against competition and establish customer loyalty to OfficeMax </li></ul></ul><ul><ul><ul><li>Building specific targeted strategies using purchase behavior data to deliver relevant offers and cross sell promotions </li></ul></ul></ul><ul><ul><li>Establish an immediately available benefit associated with all channels of customer interaction </li></ul></ul><ul><ul><ul><li>Points are communicated with all channels of purchase and service </li></ul></ul></ul>
  25. 25. What are we learning? <ul><li>Customer enrollment depends first on the associate promotion of the program </li></ul><ul><ul><li>Establishing enrollment contests in the stores for our associates </li></ul></ul><ul><ul><li>Contests are focusing on enrollment quality </li></ul></ul><ul><ul><ul><li>Valid e-mail address </li></ul></ul></ul><ul><ul><ul><li>Complete member demographics </li></ul></ul></ul><ul><ul><li>Training, training, training </li></ul></ul><ul><li>Sales and transaction penetration are key measures of success for store managers </li></ul><ul><li>Associate fraud can be quickly identified and prevented </li></ul>
  26. 26. Where will the program go? <ul><li>Leverage supplier access to customer list for promotions </li></ul><ul><li>Leverage e-mail, direct mail, telemarketing messaging for upsell, cross sell and activation </li></ul><ul><li>Develop additional benefits for membership using OfficeMax and other non-competing merchants </li></ul>
  27. 27. <ul><li>Thank you </li></ul><ul><li>Ricardo Martinez </li></ul><ul><li>[email_address] </li></ul>

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