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Why customer loyalty doesn’t come cheap

“If you think you can buy loyalty through coupons, then any other brand will simply outbid you,” Lito German, marketing head of BMW Asia said at the inaugural Customer Loyalty conference.

German and many other senior marketers such as Vipul Chawla, vice president & chief marketing officer of Yum! Brands; Dean Dacko, senior vice president of marketing of Malaysia Airlines, Mohamed Adam Wee Bin Abdullah, chief marketing officer of Maybank as well as several others, during the conference shared strategies that they have deployed for their brands in order to keep their customers loyal.

According to German, coupons do not work in the long term as loyalty is a result of long-standing relationships with consumers based on a solid offering and great customer service. And this is more so if the brand targets high-end/luxury consumers.

“Luxury brand buyers go for exclusivity,” he said.

Raising the point that mass consumers purchase products because it is in style, those in the luxury demographic do so in an attempt to stand out, said German. He also added that what is needed is to create a sense of community amongst consumers and that has proven successful for BMW through its loyalty programme, the BMW 7 Series Privileges Plus.

The membership is exclusive and is made possible through the purchase of the new models of BMW 7 Series motor cars directly from Performance Motors. Members enjoy luxurious yacht experiences, golfing retreats and many other high-end benefits.

“When this bond is then formed amongst members, they reel in each other to stay in the programme,” said German. “This form of “peer pressure” works in BMW’s favour,” he said.

The evolution of loyalty

Loyalty as it is traditionally known is also dead and calls for quick evolution, said many other speakers reflecting on the changes that technology has brought about. With the proliferation of smartphones, tablets and the internet becoming more and more accessible, marketers need to rethink loyalty.

“Technology is the new 30-second spot,” Chawla of Yum! Brands said while highlighting how KFC used conversations happening on social media and weaved it into a TVC. He also pointed out how KFC solely used social media to launch its beverage brand KFC Krushers.

With the rise of social media and increase in adoption of smartphones has led to proliferation of data. Senior marketing decision-makers present at the conference recognised that this has given rise to the need of combining their social audience profile with their overall CRM profile to understand their customers better.

“That will be the future of customer loyalty,” Michel Van Woundenburg of Oracle said.

Highlighting how brands are already headed in that direction, director of sales & marketing Keraton at The Plaza, a Luxury Collection Hotel, Starwood Hotels & Resorts said its hotels study that consumer data before the guests check in.

“Even if the number goes in hundreds, we will make sure we have gone through the records of every guest who is about to check-in.”

Hardman also pointed out the importance of human touch in building brand loyalty. “Some strong ‘complainers’ of our brands in the past are now are biggest advocates,” she added, explaining how senior staff from the hotel personally attended to them to ensure their complaints were resolved.

“Now they are our advocates and jump in any online conversation to champion the brand, even before the brand does so.”

Senior marketers also spoke at length on issues such as driving loyalty through mobile, brand advocacy, e-Commerce and m-Commerce.

The second day and the last day of the conference will see brands such as Prudential, Friesland-Campina, Scoot, Lenovo and many others discuss more topics related to building a loyal customer base.

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