1 Customer Relationship Marketing 15-Feb-24 & Philips Brand Equity Board 3 Why Relationship Marketing A consumer perspective CRM as sustainable competitive advantage Media effect and media efficiency 4 CRM: A consumer perspective The consumer (in Europe) is changing: Feel unconfident about their future * Need a feel of trust to buy * Trust from a brand will grow when the brand is more open and ‘on level’ with the consumer * If customers trust you, it will be easier to sell and they will come back for more... * = source: The Henley Centre 5 CRM: Competitive advantage Where products become more and more similar, communication becomes the differentiating factor In every category, very few households make or break a brand (the high spending minority) The most successful brands are those with the most loyal heavy users (Garth Hallberg) CRM aims to build better bonds with this segment The advertiser who finds a direct way to the hearts and minds of these people wins 6 fromcounting the people you reachtoreaching the people who count CRM: Competitive advantage 7 CRM: Media perspective The number of brands is still increasing in almost every market (e.g. Korean brands) Mass communication gets less efficient due to media-fragmentation Mass communication gets less effective due to increasing mass media and outdoor information-pressure; outspending the competition is not the solution Consumers ‘zap’ in TV and print more than ever 8 CRM: Media efficiencyFelix TV commercial Split run test on users database: 50% no mailing (control), 50% received a mailing that announced a new TV commercial. Announcement mailing was sent 1 week before broadcasting. 9 Results Felix: (after broadcasting 15 spots) EFFECT: just TV DM+TV Reach 26 % 56 % Spont. awareness 44 % 77 % 10 frommass mediatointegrated media CRM: Media Perspective 11 What is CRM about? Reaching the people who count Profiting from multimedia synergies Growing the right relationships More bang for the buck Requires building your own media 12 Growing the right relationships A dialogue - a concrete result of a relationship - will only be fruitful if the timing and the message is right and relevant. We call this commitment - and the underlying process - to build profitable relationships: Customer Ownership. Because, in the end it is about creating a sense of ownership in the customers’ mind: My shop, My BMW, My Philips.