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Article
Publication date: 30 January 2007

Kelly Hlavinka and Leopoldo Gomez

The purpose of this paper is to examine how consumer packaged goods (CPG) companies are harnessing the power of loyalty marketing to improve their sales and branding effectiveness.

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Abstract

Purpose

The purpose of this paper is to examine how consumer packaged goods (CPG) companies are harnessing the power of loyalty marketing to improve their sales and branding effectiveness.

Design/methodology/approach

The paper cites examples of CPG loyalty efforts from Procter & Gamble, Tazo Tea, Huggies diapers, Moet Hennessey, Maker's Mark, Purina dog food and others, it outlines two primary models that CPG marketers are pursuing, each with their own approaches, levels of investment and possible outcomes.

Findings

The paper explores the many obstacles CPG marketers must overcome if they desire to shift from mass advertising to a more customer‐centric marketing model and cites examples of successes and failures from a variety of organizations.

Research limitations/implications

“The CPG industry has often been the odd man out even as brands in nearly all industries around the globe have pursued loyalty marketing as a primary tactic of their overall enterprise customer strategy”, note Hlavinka and Gomez. “Is it because the CPG industry views the retailers who sell their goods as their primary market, rather than the consumers who actually use them? Is it lack of concern for the consumer? Lack of focus? Lack of expertise? All of the above? These are the questions that our research set out to answer.”.

Practical implications

The reader will come away with some specific ideas for improving the effectiveness of their private label credit card program. Armed with the knowledge of the scope and size of the private label credit card market, readers should gain insight that will improve their decision‐making about their own program.

Originality/value

The paper takes a look at the emergence of loyalty programs in the consumer packaged goods industry and what is ahead for this burgeoning trends.

Details

Journal of Consumer Marketing, vol. 24 no. 1
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 7 August 2007

Rick Ferguson and Kelly Hlavinka

This article aims to examine US loyalty marketing industry size and analyzes growth trends.

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Abstract

Purpose

This article aims to examine US loyalty marketing industry size and analyzes growth trends.

Design/methodology/approach

The article provides a discussion on COLLOQUY's benchmark‐setting measurement.

Findings

US loyalty rewards program membership has reached 1.3 billion, according to COLLOQUY research that provides the first comprehensive census‐taking of loyalty marketing since the modern loyalty era began with frequent flyer incentives in 1981. COLLOQUY's benchmark‐setting measurement, based on a fourth‐quarter 2006 analysis of a dozen business sectors, reveals that the average US household belongs to 12 loyalty programs. In a key finding, the COLLOQUY census shows that “active participation” in loyalty programs is a blended average of 39.5 percent across all sectors analyzed, a number that COLLOQUY experts characterized as “dismal.” Of the 12 programs per average household, 4.7 yield active participation. The census results raise a major question. Does the participation data mean the loyalty empire has reached a saturation point? The response from COLLOQUY experts: “Loyalty memberships are flying dangerously high. Fat membership roles may look good in a press release, but active loyalty program members are the only members who count.”

Practical implications

The loyalty marketing industry has experienced significant growth. Low active participation rates signal that millions of customer files in a database do not signify a successful loyalty strategy. Smart enrollment strategies should suggest a finite population of best or highest potential spenders.

Originality/value

The article provides proprietary business‐to‐business research on the size and scope of the US loyalty marketing industry.

Details

Journal of Consumer Marketing, vol. 24 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 1 October 2006

Rick Ferguson and Kelly Hlavinka

This paper is aimed at describing how companies can find new opportunities for customer retention and lifetime value by applying the concepts of dialogue marketing…

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Abstract

Purpose

This paper is aimed at describing how companies can find new opportunities for customer retention and lifetime value by applying the concepts of dialogue marketing, network‐building and relevant rewards.

Design/methodology/approach

The paper cites the work of Chris Anderson, Editor‐in‐Chief of Wired Magazine, and the work of Italian economist Vilfredo Pareto. The paper explains how the works of these two men, and how programs put into place at two companies (Hewlett‐Packard and Rain Bird), have opened new vistas in customer retention.

Findings

The study found that by applying specific marketing principles, companies can do a better job of retaining all customers, specifically those customers who are not in the top 20 percent of revenue‐producers.

Practical implications

Most companies believe that 80 percent of their business comes from 20 percent of their customers. However, by applying specific marketing principles, companies can do a better job of retaining all customers, specifically those customers who are not in the top 20 percent of revenue‐producers.

Originality/value

The paper takes a new look at an old principle (the 80‐20 Pareto Principle).

Details

Journal of Consumer Marketing, vol. 23 no. 6
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 3 May 2011

Kelly Hlavinka

The purpose of this paper is to peer into the future of loyalty marketing and to offer marketers clear steps on how to shift focus and adapt to the coming consumer trends.

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Abstract

Purpose

The purpose of this paper is to peer into the future of loyalty marketing and to offer marketers clear steps on how to shift focus and adapt to the coming consumer trends.

Design/methodology/approach

COLLOQUY delved into its years of loyalty marketing research and experience to pull out three top trends believed to take hold by 2030. COLLOQUY's views are supported by statistical background from Goldman Sachs, the US Department of Economic and Social Affairs and demographers.

Findings

Five over‐riding forces are creating a shift in future loyalty trends: an aging population; a burgeoning middle class; increasing extremes of wealth; more boom‐and‐bust cycles; and technology advances towards the seamless, instant and personal. Because of these forces, three new trends have emerged: the next new normal; the new “I‐network”; and the new marketing reality.

Practical implications

This case study offers marketers not only a look into the future of loyalty marketing, but also tips on how to embrace the new trends, including: what you can do now to meet the next new normal – start to test householding options. If households are dealing with multiple generations of parents, grandparents and kids, and the new localism in which the community is vitally important to customers comes to the fore, marketers must figure out how customers can pull their resources across their families, their friends, their networks and their communities to enjoy things relevant to all or most of them. Examples might include redeeming for event resources to host their local high school reunion, or for activities and resources to help a local community center, or simply letting the extended family get away for a ski trip. This needs to be tested now so that it can be determined how people engage, what is relevant, and how to start to prepare.

Originality/value

The paper provides insight on future trends and exclusive tips on how to adapt marketing strategy to thrive in 2030.

Details

Journal of Consumer Marketing, vol. 28 no. 3
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 21 March 2008

Rick Ferguson and Kelly Hlavinka

The purpose of this paper is to use current loyalty market landscape data to examine differences in loyalty‐program participation among key consumer segments.

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Abstract

Purpose

The purpose of this paper is to use current loyalty market landscape data to examine differences in loyalty‐program participation among key consumer segments.

Design/methodology/approach

Using data from the Loyalty Census research study conducted by COLLOQUY (JCM v24i5), this paper applies the information to six demographic segments of high interest to loyalty‐marketing practitioners – affluent, young adult, senior, core women, emerging Hispanic, and general adult – to determine rends related to participation, needs, redemption, and satisfaction.

Findings

The paper identifies the emergence of underserved and important demographic segments looking for attention in the world of loyalty marketing. The paper also establishes the new battlegrounds for loyalty programs in regards to rewards and redemption. Finally, the research reveals fresh strategies for marketers designing loyalty offerings.

Practical implications

Personalization is key to driving participation in contemporary loyalty marketing programs. Companies must identify the individual and tailor rewards, offers and benefits ‐ constructing a “difference engine” to serve all markets, build advocacy, retention and return on investment.

Originality/value

The paper further deconstructs the current loyalty marketing landscape and spotlights budding demographic segments previously overlooked or understudied. The text derives ten concrete suggestions from the data for building successful loyalty programs in today's changing market.

Details

Journal of Consumer Marketing, vol. 25 no. 2
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 27 March 2007

Rick Ferguson and Kelly Hlavinka

This paper aims to examine the banking industry's expanding use of loyalty marketing programs to build profitable relationships with customers. Banks'…

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Abstract

Purpose

This paper aims to examine the banking industry's expanding use of loyalty marketing programs to build profitable relationships with customers. Banks' relationship‐building strategies fall into two categories: full‐blown multi‐product loyalty programs and narrower programs that expand customer rewards in one or two key product areas.

Design/methodology/approach

Innovative loyalty programs launched by various banks are used as examples to show how individual banks are customizing their relationship‐building strategies within the two broad categories. Those categories are broad multi‐product loyalty programs and narrower initiatives focused on key products.

Findings

The authors believe their deeper look into relationship banking reveals that, far from a magic bullet approach, banks are customizing their relationship‐building strategies to create value propositions as unique as the institutions and customers they serve. When banks use loyalty programs to engender trust and build confidence in the brand, the customer relationship will develop organically, and so will profits.

Practical implications

There is no core list of best practices for relationship banking. By examining innovative programs and being willing to customize their strategies, banks can build enduring customer relationships that lead to growth.

Originality/value

This paper takes a look at relationship banking trends, with suggestions on how banks can incorporate these trends into successful, customized programs.

Details

Journal of Consumer Marketing, vol. 24 no. 2
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 1 August 2006

Rick Ferguson and Kelly Hlavinka

This paper seeks to examine three evolutionary trends that are pushing the boundaries of loyalty marketing in 2006 and beyond. These trends incorporate the power of…

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Abstract

Purpose

This paper seeks to examine three evolutionary trends that are pushing the boundaries of loyalty marketing in 2006 and beyond. These trends incorporate the power of networks, the power of data, and the power of convergence.

Design/methodology/approach

The paper thoroughly describes three new trends in loyalty marketing, which the authors believe have the potential to affect the strategies of all existing loyalty programs. Various programs that represent ongoing experimentation and innovation are used as examples of each of the trends.

Findings

The paper suggests that by incorporating some of the components of the three trends in loyalty marketing, marketers will see their boundaries expand and their strategies and tactics change. The results will power profits and growth.

Practical implications

It may be true that the biggest revolutions in loyalty marketing happened in the past. But micro‐revolutions in loyalty marketing are happening everywhere. By examining those programs that are innovative and willing to experiment, marketers can learn strategies that can grow their own programs.

Originality/value

The paper takes a look at evolutionary trends in loyalty marketing, with suggestions on how to incorporate these trends into existing programs.

Details

Journal of Consumer Marketing, vol. 23 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

Article
Publication date: 21 November 2018

Pedro Torres, Mário Augusto and Elaine Wallace

This study examines the impact of social media activities on consumers’ willingness to pay a premium price (WTPp) in the banking industry, and investigates the role of…

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Abstract

Purpose

This study examines the impact of social media activities on consumers’ willingness to pay a premium price (WTPp) in the banking industry, and investigates the role of consumer-brand identification (CBI) on this relationship. For the first time, the effect of electronic word-of-mouth (eWOM) is considered separately from other social media marketing efforts (SMME).

Design/methodology/approach

Data from a sample of 145 banking customers that follow bank social networks was analysed using structural equation modelling and fuzzy-set qualitative comparative analysis (fsQCA) to test a proposed structural model.

Findings

Findings indicate that the effect of eWOM and SMME on WTPp is fully mediated by CBI. The results uncover a viable path to achieve WTPp in the banking industry, which includes the joint presence of SMME, eWOM and CBI.

Research/limitations implications

The study was conducted on the banking sector of Portugal. It is advocated that further research would investigate the results in other service sectors, across different countries.

Practical implications

Findings highlight the importance of social media marketing in banking. Results reveal opportunities for managers in the banking sector to enhance CBI and ultimately WTPp, through SMME and eWOM.

Originality/value

The study is the first to consider the influence of SMME and eWOM as separate antecedents of WTPp. The findings indicate that the effect of eWOM and SMME on WTPp is fully mediated by CBI. In particular, the results of the fsQCA indicate that the combined presence of SMME, eWOM and CBI, is sufficient to obtain WTPp.

Details

Journal of Services Marketing, vol. 32 no. 7
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 14 March 2008

Melodena Stephens Balakrishnan

Worldwide approximately 200 national economies are competing in the destination market. In 2006, global government and capital expenditure exceeded US$1,480 billion making…

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Abstract

Purpose

Worldwide approximately 200 national economies are competing in the destination market. In 2006, global government and capital expenditure exceeded US$1,480 billion making destination branding an important concept that still remains fragmented and unplanned. Dubai, an emirate of the UAE in the Middle East has been chosen as a case study to explain some elements of successful destination branding. This paper aims to apply a framework developed by Balakrishnan to explain areas of caution when competing in an international market where success is also partially dependent on the macro‐environment.

Design/methodology/approach

The framework was developed by reviewing literature on destination, place, corporate, product portfolio and service branding. The framework was tested using case study methodology. Secondary research was primarily used to develop the case.

Findings

There is a strong fit with the model suggesting that destinations can use this as a basis for continuity in strategy even as governments change. Based on the analysis and review; a checklist for destination branding strategy was recommended.

Research limitations/implications

Since, this study depends on secondary research there is some limitations as data in this region is not easily available.

Originality/value

Destination branding differs in challenges vis‐à‐vis product and service branding. This paper depicts steps essential for creating a successful branding strategy which can be applied in a real world context to maximize returns for the destination.

Details

Journal of Place Management and Development, vol. 1 no. 1
Type: Research Article
ISSN: 1753-8335

Keywords

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