Marketing Insights

Picture this scenario: You come home from work and, after putting down your two pieces of direct mail, you find your youngest son online playing an interactive game online.

Meanwhile, your spouse is watching a specialty gardening or cooking program on a premium cable network that presents a tailored interactive advertisement. Your 14-year-old daughter is uploading pictures to MySpace while listening to a free song she downloaded as part of an iTunes promotion, and next to her, your 15-year-old son is asking her to let him use the computer so he can look for special codes on a Coca-Cola promotional website that will grant access to the secret level of his favorite video game.

Just then you get an automated text message about a concert ticket you bought online at the office earlier in the day.

Is this your reality? If it is, you are not alone. And for marketers, the challenge of effectively connecting with consumers in the ways they want to be reached is increasingly difficult.

Of course, the more information you know about your customer, the greater your chances are of successfully engaging them. But if you’re responsible for multiple markets across the region, how do you manage your entire customer database, both locally and regionally, for the greatest returns?

To raise more awareness about this issue, Marketing magazine held its first ever Marketing Insights event on Thursday 28 February, geared specifically towards regional marketers wrestling with finding the right balance between the flexibility required for country-specific strategies and the efficiencies and expanded capabilities that come from a regional approach. Sponsored by Acxiom, a global customer and information management firm, the half day event raised the question “What’s Your Regional Data Strategy?”

The half day format saw an opening address by Acxiom’s Will Bordelon on customer management trends across Asia, followed by the event’s main speaker, Esprit’s head of marketing for APAC, Francis Phua, who shared the story of Esprit’s loyalty marketing and customer relationship program. The floor was then open to questions in an interactive Q&A panel discussion, providing a lively and informative debate.

Opening Address and Keynote Presentation

With his opening address Will Bordelon, Acxiom's regional business development director for Asia Pacific, put into context the arguments that exist in Asia today for and against managing customer information at the local versus regional levels.

Asserting that technology is almost always the catalyst for change and consumer demand, Bordelon reminded the audience of former industry leaders - Kodak, Kmart, RCA - who fell behind the curve because of their failure to embrace and adapt to change. For marketers with responsibilities across Asia the major challenge today lies in the reality of a mass media meltdown, an ever increasing number of consumer touch points, and fragmented marketing channels, all amidst rising customer expectations about how they want to be reached.

Among other strategic concerns for marketers, he went on, are the geographical, linguistic, and cultural differences that define Asia, compacted even further by inconsistent IP enforcements, data security concerns, and varying regulatory requirements across Asian markets.

All these factors, said Bordelon, must be taken into consideration when deciding how to best target consumers across multiple markets. For some businesses, the differences across Asia drives them to set single market strategies, where all infrastructure, marketing planning, budgets and execution are run at market level. For others, the desire to have a centralised approach for all markets outweighs the challenge of regional variance.

Returning to his earlier message of change, Bordelon made the conviction that the change for marketers taking place in the region today lies in the ability to cultivate and utilise data in order to better engage, add value to, and retain one's target audience. And while this improvement in customer data management can be realised through either the local or regional approach - as there are success stories behind both, he pointed out - it will fundamentally change the way we market, and therefore is an issue not to be avoided.

Quoting the late Winston Churchill, Bordelon reinforced his message, "To improve is to change; to be perfect is to change often." In this regard, he claimed, there is little difference between the politics of Churchill, and the ever changing marketing landscape of Asia.

Bordelon then made way for keynote speaker Francis Phua, head of marketing, Esprit Asia Pacific, who outlined the company's regional data strategy by sharing the evolution of its CRM and club loyalty programme.

When the Esprit membership card was first implemented in Asia, which Phua noted was in an effort to satisfy existing customers who "cost five times less to retain than acquiring new ones", the approach for determining membership criteria was localised. Each country set their own benefit discount structure, minimum spend requirements, and policies for recruitment, retention, and communication.

In addition, the card could only be used locally; their system was unable to capture records of overseas purchases. This localised approach, said Phua, barred Esprit from realising its vision of having a consistent image as a global lifestyle brand with mobile customers who were likely to visit any of their stores in, for example, Hong Kong, Malaysia, or Singapore throughout the year. 

In order to ensure "a consistent branding and marketing approach," Esprit re-branded its club card from EPC (Esprit Privilege Card) to Esprit Club in 2004, and transformed its retail CRM platform into a standardized system that covered all of Asia.

With capabilities that could now capture customer's information through multiple channels, including membership applications, purchases, hotline inquiries, and online submissions, Esprit in turn was able to use that information to learn how to better target and retain them.

What this meant for Esprit's card members, Phua explained, was a unified customer experience at any of Esprit's retail outlets, while for Esprit it meant they could now track consumer purchasing patterns across Asia as well as perform local market micro analysis of consumer insights.

With improved data capture and measurement capabilities, Phua was able to reach their goal of achieving higher sales. With the belief that "A happy customer generates more sales", Phua detailed strategies he had adopted for market segmentation, member interaction and engagement, VIP schemes and promotional support, all in an effort to build member loyalty and retention.

Staying true to the presentation's title, Phua provided the audience with other examples of two regional and local market initiatives, both supported by using the data and analytics gathered by Esprit's CRM program. The first example focused on two of its regional initiatives; the launch of their platinum card, and the creation of Esprit club member lounges throughout Asia.

Targeting existing permanent members, along with members with annual spend of over HK$10,000, the platinum card was initiated to focus on rewarding and retaining high value Esprit Club members with "aspirational services and benefits." This, said Phua, was in an effort to create a value proposition for this exclusive target group that was too good to refuse.

The mechanics of the rewards program involved a permanent discount, free sewing, alterations, and dry-cleaning services, priority Esprit pre-sale invitations, as well as Asia miles and bonus point programs.

To support these services, and to increase the quality of its customer service in general, the Esprit club member lounges functioned as a key contact point for customers, acting as both a reward redemption and information centre, where staff could provide a range comprehensive support to customers in order to enhance their shopping experience. Phua explained these regional initiatives helped him achieve Esprit's goal of consistent branding and service throughout Asia, while increasing retention levels of some of their most loyal customers.

Within this regional approach, Esprit continued to customise local market initiatives, in order to "stay relevant and engaged" at the ground level. Drawing on case studies of local market specific campaigns within Hong Kong, Phua demonstrated the system's capacity to segment at any level.

The first example he used was the promotion of Esprit's Central store Opening, which targeted Esprit Club and business partners alike. While its theme revolved around a personalised DM campaign, designed in order to show recognition of top members, it also offered different benefit schemes to its different member categories.

For instance, within this campaign, first timers where offered photo frames with certain purchase amounts, while members who lived on Hong Kong island were offered a 10% discount for coming in to shop .

The other example of a market specific campaign was the company's Esprit Club private party invitations, a personalised email program geared towards Esprit's top spending members. Using strategies designed to increase excitement towards the Esprit brand, the program aimed to provide special VIP treatment while simultaneously promoting special previews of new content. The result: an increase of the amount per transaction for each member, and the generation of new sales during the VIP party.

Of course no CRM system is perfect, Phua warned. Emailing your members promotional offers every two weeks, for example, might cause them to unsubscribe, while sending only two a year will result in a reduction of their average monthly spend. "You have to find the sweet spot," Phua said, adding that timing his campaigns was an art.

He also said another important aspect of CRM is responding to customer response of one's various campaigns. Using the Esprit birthday card program - a direct mail campaign which encouraged members to shop in order to enjoy a 20% discount - as an example, Phua pointed out that in its initial stages, the program created more CRM issues than it solved.

Members who came in without their card were not able to redeem their promised discounts, thus creating an un-memorable experience. Once this issue was addressed (by allowing member's to simply provide some personal information as proof of their membership), the campaign added tremendous retention value.

Ultimately, Phua concluded, Esprit benefited by adopting a regional approach to provide the overall strategic direction for the brand, while giving the local markets enough autonomy to further engage and grow their customer base.

Summary of Q&A Panel Discussion

Phua and Bordelon then sat down next to Marketing's editor Matthew Eaton and Cannon's senior marketing manager Daniel Chung, to take questions from members of the audience, including Pieter Schats, chief executive officer of Toys `R' Us and Lorraine Little-Bigelow, regional director of marketing with California Fitness.

The debate covered issues such as integrating other departments, such as sales and operations, into any new marketing campaign, how call centers should be used to support the CRM system, and how to identify technology that matches your data analytics requirements.

As the first Marketing Insights event came to a close, the audience left with both new insights and new questions, but also, with the message of Phua's presentation fresh in the minds, the certainty that, as far as the challenge of building a regional data strategy is concerned, they are certainly not alone.