Book Description
World renowned marketer Tom Osenton introduces new marketing principles that are applicable to companies of all sizes and in all industries. He shows how to maximise the power of mass and direct marketing in today's economy, and uses case studies - including Coca-Cola, Frito Lady and Johnson & Johnson.
Drawing on the best ideas from direct selling, permission marketing, and one-to-one marketing, Osenton presents today's best solutions for acquiring customers, retaining them, unlocking the power of customer loyalty and growing your share of their purchases.
From the Back Cover
A one-percent increase in customer share is equal to a five-percent increase in market share.
Hitting the market share wall
Increasing market share can be a very expensive proposition. Instead, leading-edge marketers are turning to customer share growth as a powerful, effective, and inexpensive way to increase sales as well as profits.
Unlock the power of customer loyalty
Your best customers may be exceedingly loyal, but loyalty alone won't make them better customers. One-to-one, permission-granted marketing can help you cross that bridge.
Retain customers and grow customer share
Properly deployed, a customer share marketing strategy creates a mutually rewarding relationship between you and your customers. Discover the best ways to deepen your relationship with customers you've already invested to acquire.
Marketing in the next economy
With market share reservoirs largely drained, a customer share marketing focus is the next logical step in the evolution of marketing. Through real-world examples, apply the experiences of the world's great marketers to your company, large or small.
More sales, greater loyalty from your best customers!
Over the last half-century, the leading marketers, advertisers, and business schools in the United States and around the world have focused on the art of growing market share as the primary means of growth for a business. Today, attempts to expand market share are often prohibitively expensive and only marginally effective at best. Author Tom Osenton, the world's leading authority on customer share marketing, offers a compelling alternative for today's marketers who are compelled to generate growth.
Customer Share Marketing:
- Shows how large and small companies can systematically mine current customers and benefit from customer loyalty
- Demonstrates how the world's leading marketers-including American Express, BMW, Coca-Cola, Frito-Lay, and Johnson & Johnson-are applying customer share marketing strategies to grow revenues
- Contains over 30 real-world best practice acquisition examples and over 30 best-practice retention examples
www.customershare.com
"Careful! This is powerful stuff. Hands on, practical, honest, and rational-exactly what you need to push your marketing program forward. Tom Osenton just bulldozed the profession (if you can call it that!) several years forward."
—Seth Godin,
author of Survival is Not Enough
and Permission Marketing
"Here at last, a practical guide for tapping into the marketing power and intimacy of the Web. Osenton shows us how to create highly profitable, enduring online customer relationships....today, not five years from now!"
—Chuck Fruit,
Vice President & Marketing Chief of Staff,
The Coca-Cola Company
"Invaluable insight into utilizing the Web to grow profitability. Osenton's book is one of the few that mixes theory, with a strong does of reality, to give an outcome of real world practical applications. An innovative, thought-provoking read for any industry."
—Jeff Rotsch,
President, Sales,
General Mills
About the Author
TOM OSENTON has more than 25 years of senior-level management experience at world-class companies such as the CapCities/ABC, The Sporting News, and Billboard Publications. He worked on three Olympic Games as an executive with the ABC Television Network, serving as network spokesman in 1984. As President and CEO of The Sporting News, he spearheaded a major turnaround that helped save the nation's oldest sports weekly, while pioneering an early move to the Web.
Tom is currently CEO of the Customer Share Group LLC—a leading management and marketing consultancy that advises some of the world's major companies and brands on developing customer share strategies. As a leading expert on strategic marketing and planning, he is a popular industry speaker and a frequent participant at industry seminars, conferences, and webinars.
Excerpt. © Reprinted by permission. All rights reserved.
Introduction
Every Saturday morning, I fill up the family car with gas at the local Mobil station. The routine is generally the same, week in and week out, and usually costs anywhere from $23 to $27, depending on the price of gas and exactly how much of it we've consumed over the past week. Lift the handle, select the grade, reset to $00.00, fill the tank, and pay the attendant. A week later, I'm back at the pump: lifting the handle, selecting the grade, resetting to $00.00, filling the tank, and paying the attendant. At this point, I could perform the task in my sleep, consistently contributing, on average, about $25 per week to the station's business.
Until one Saturday, while I was paying the attendant for gas, I also bought a dozen donuts and a cup of coffee. It was the first time that I ever spent more than $30 during one visit to the Mobil and it caused me to realize something about gas—that it was basically like toothpaste or shampoo. I realized that no matter what the folks at Mobil did to entice me to buy more gas, I would only buy more when I ran out.
I also realized something about the business of selling gas—it's all about market share. It's about selling gas to more people as opposed to selling more gas to the same people. In marketing terms, growth for a gas station is all about acquiring new customers.
As for the returning loyal customers—like me—the only way to generate more money from retained customers is to sell them something else along with the gas—like donuts and coffee. Unlike an acquisition strategy that primarily relies on new customers to grow market share, a retention strategy gives marketers the opportunity to grow customer share by selling more to the customers they already have.
Market Share Marketing: The Art of Acquiring Customers
Over the last half-century, the leading marketers, advertisers, and agencies in the United States perfected the art of acquiring customers and growing market share. In fact, it's very unlikely that we will ever witness such a run on
customer acquisition as we did during the decades immediately following World War II, when consumers began to establish brand preference across dozens of products. It's difficult to imagine any group of marketers better at developing and successfully executing wholesale customer acquisition strategies since 1950 than U.S. marketers and their agencies.
But with market share levels largely established, it has become very difficult and very expensive for marketers to grow sales by growing market share.
Ask most nationally branded packaged goods manufacturers today who buys their soap or their beer, and they'll tell you 29- to 49-year-old women or 21- to 49-year old men. On the other hand, ask L.L. Bean who buys its outdoor gear, and the company produces a printout of the names and addresses of individual customers, along with their purchasing histories, that would fill a room. Direct marketers such as L.L. Bean have always known who their customers were—literally and figuratively. For mass marketers that primarily promote to enormous groups of people based largely on demographics, a list of consumers who buy their products once, twice, or two dozen times a year, for the most part, simply doesn't exist.
So why should this be important to mass marketers now?
Hitting the Market Share Wall
After a company has sold to virtually every man, woman, and child on the planet, how does it profitably grow sales? When a company with an established and loyal customer base is unable to grow by adding new customers, that company has "hit the market share wall." Look at Procter & Gamble, for example: an enormously successful company that was launched by two immigrants in 1837 when the population of the United States was less than 16 million.
Now, more than 160 years later, P & G proudly boasts in its 2000 Annual Report that it successfully markets more than 300 products to more than 5 billion consumers in 140 countries. Think of that—five billion consumers. If the world's population is 6 billion and the remaining 1 billion are either too young, or too poor, or have no access to P & G products, how do companies such as P & G proactively impact sales growth? Significant growth for such companies, more often than not, has come from acquiring competitors, launching line extensions to existing brands, or making the case to consumers, through costly advertising and promotion, to switch brands.
But now the Web enables a new and powerful fourth alternative: a three-pronged strategy that (1) uses the power of mass marketing to both sell products and acquire permission to communicate with prospects and customers directly by future email, (2) uses email to create one-to-one permission-granted, relationship-enhancing conversations with existing loyal customers, and (3) uses the Web as a sales facilitator at the center of promotions that encourage and drive repeat sales online or offline.
Customer Share Marketing: Getting More from Existing Customers
Though it is difficult to measure, the value of brand loyalty as a P & G asset across its stable of products worldwide is significant and powerful. Consider the impact on company sales if P & G more aggressively employed cross-selling strategies to leverage the loyalty that a customer has for one P & G product to buy another.
There is a significant amount of stored brand equity associated with the products and services of thousands of companies. That stored brand equity, or brand loyalty, can be leveraged to help sell customers more of the same product or more products within a family of brands. For example, offering combination discounts on compatible P & G household care products, such as Bounty paper towels, Mr. Clean multipurpose cleaner, or Cascade dishwashing detergent, with multiple purchases of Joy dishwashing liquid could move the sales needle for a host of P & G brands.
In many ways, P & G is like the local gas station. It markets and sells fixed consumption products such as laundry detergent—products that are typically purchased only when the consumer runs out. Selling more Tide to consumers who already have a box is difficult at best. But create a customer loyalty program that rewards loyal Tide users with the opportunity to receive electronically delivered coupons with discounts on Downy Fabric Softener or a package of Pringles—both P & G brands—and you have the makings of a customer share marketing program that proactively markets more of what a company has to sell on a one-to-one basis.
Mass Marketing and Direct Marketing
This book is not about mass marketing or direct marketing. It's about mass marketing and direct marketing working together to sell more to existing customers. It is also about how the Web makes it possible, practical, and profitable to do both. Historically, we have treated these important and disparate marketing initiatives as mutually exclusive activities, with mass marketing ad man David Ogilvy on one end of Madison Avenue and direct marketing guru Lester Wunderman on the other.
But the Web is beginning to change that as more and more established brands are realizing that the interactive nature of the Web can be an effective and affordable means of enhancing customer relationships as well as growing customer share.
Best Practices from the World's Leading Marketers
The marketing principles discussed in this book can be applied to the marketing initiatives at companies of all shapes and sizes—both B2C and B2B. It doesn't matter what you're selling or to whom or how many customers you have. Whether you're a company with 50 customers or 5,000,000, the objectives are the same—to generate increased sales and profits.
You'll be able to learn how the world's leading marketers, such as Frito-Lay, Coca-Cola, and Johnson & Johnson are applying customer share marketing strategies to generate more sales from loyal customers. Best practice examples are presented in two separate chapters:
Chapter 11, "Acquiring Customers and Permission," is a collection of best practice acquisition examples from leading marketers such as American Express, Frito-Lay, and BMW, which detail how companies such as these are using the Web to acquire both sales and permission for the purpose of building an inhouse permission-granted database of prospects and customers.
Chapter 13, "Retaining Customers and Growing Customer Share," is a collection of best practice retention and customer share growth examples from companies such as Campbell Soup, Kellogg's, and the Coca-Cola Company, which illustrate the effective use of the permission-granted list to convert prospects to customers, customers to repeat customers, and repeat customers to loyal customers for life. You will learn how companies are using customer share marketing strategies to increase the amount of business from the loyal customers they have invested millions to acquire.
Best practice examples are presented as formatted mini-case studies that cover a breadth of marketing disciplines—from online and offline advertising to acquisition email marketing to customer promotions—and make it easy to understand the elements, strategy, and in many cases, the results of the effort.
There are also a few important words and phrases that are used frequently throughout the book and require a clear definition to avoid confusion:
Prospects and Customers: Prospects are defined as potential customers. Until they actually purchase something, they remain prospects. Customers are the folks who have purchased something from you—trading their money for your product. This may seem obvious, but many people categorize prospects that sign up for promotions or enewsletters as customers. For our purposes, they are not.
Opt-in and Permission: There is considerable debate over what is permission and what is not, and whether opt-in is the same as permission. For our purposes, opt-in names represent a list of prospects that are rented from a third-party broker. Even though permission may have been granted to a third-party, the names in your permission-granted database should be names of either prospects or customers who have granted permission directly to you, not through a third party. If permission is not granted directly to the marketer, then the name is neither permission-granted nor owned by the marketer. Third-party opt-in names can be a very valuable source of prequalified leads, but until those leads say yes to you, they are considered opt-in names.
Getting Serious
One hundred years from now, when the book that chronicles 21st century marketing strategies is written, it will no doubt describe the work of marketers who were successful at practicing both market share and customer share strategies as part of a truly integrated marketing strategy. The book will also show how mass marketers made the shift to embracing direct marketing as an important complementary initiative in order to successfully manage 21st century customer relationships.
This shift is rapidly gaining momentum as marketers of all sizes are getting serious about how they can best use the Web and email to more effectively manage their best customers. The innovators have already begun to make use of the Web to more effectively manage and grow their customer relationships. Regardless of whether you are a Web marketing innovator or just starting to integrate the power of the Web into your marketing plans, this book is designed to help you keep moving forward—maximizing the Web as a tool to unlock profits from loyal customers you already have.
