You Want Loyalty? Get a Brand! INFOPRESSE Conference Centre Mont-Royal, Montreal 10 September 2008 Fidélisation

You Want Loyalty?You Want Loyalty?Get a Brand!Get a Brand!

INFOPRESSE ConferenceCentre Mont-Royal, Montreal

10 September 2008

Fidélisation

http://www2.infopresse.com/conference/conference-ip-2008-FidelisationRelationClient.aspx

Awareness is NOT Awareness is NOT Loyalty!Loyalty!

© Brand Keys, Inc. 20082



Satisfaction is Satisfaction is NOT Loyalty!NOT Loyalty!


© Brand Keys, Inc. 2008 6


Source: General Motors THE ASSOCIATED PRESS

Record loss for GMGeneral Motors posted a record

loss of $38.7 billion for 2007

DETROIT (AP) – General Motors Corp. said Friday its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.

The loss of $27.33 per share is the third-worst quarterly loss in the automaker’s history. In the same period a year earlier, GM recorded a net profit of $891 million, or $1.56 per share.

Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.




These are These are price-of-entry price-of-entry

items.items.







Why?Why?

Because there is Because there is a big difference a big difference

between between Loyalty and Loyalty and Continuity.Continuity.




All Airlines GAll Airlines Giive ve Points!Points!




Delight turns to Delight turns to Expectation…Expectation…


and Expectation and Expectation turns to Irritationturns to Irritation



Customers are Customers are on on

to that!to that!


So much so that So much so that the product isn’t the product isn’t

enough any enough any more!more!




Loyalty accrues if Loyalty accrues if you are perceived you are perceived

as a brand. . . as a brand. . .


and if you are able and if you are able to meet or exceed to meet or exceed

expectations expectations consumers hold for consumers hold for

the category.the category.


To do that To do that you need to be a you need to be a

brand! brand!


NOT a Category NOT a Category Placeholder. Placeholder.


Brand Keys Commodity-to-Brand Keys Commodity-to-Human Brand Continuum (U.S.)Human Brand Continuum (U.S.)

Degree To Which Products & Services Are Imbued With Real (Or Perceived) Emotional Values

None High

21st Century “Brand”

Human Brand

Martha Stewart

Donald Trump

Tiger Woods

CategoryPlaceholder

INC International

Label

Commodity(aka Stuff)



=

35


YOU NEED TO BE YOU NEED TO BE A BRAND!A BRAND!


How Do We Know?How Do We Know?


We’re Brand KeysWe’re Brand Keys

• The leader in predictive brand equity, loyalty, and engagement research metrics since 1984; an independent global boutique.

• Brand Keys specializes in brand equity and engagement metrics that accurately predict future in-market behavior and therefore correlate highly with sales and profitability.

• Our predictive brand metrics are grounded in clinical psychology. This distinction allows us to understand both the emotional and rational factors bonding consumers to brands.

• We can accurately measure the impact media/marketing initiatives will have on future in-market behavior.

New York Albuquerque

Los Angeles Philadelphia

London, England Sydney, Australia

Tokyo, Japan


Some of Brand Keys ClientsSome of Brand Keys Clients


Dr. Robert PassikoffNamed a

“2007 ARF Research Innovator”

Amy Shea, EVP,Recipient of 2008 ARF“Great Mind” Award in

Innovation

Read The ARF’s First OpinionResearch Review On

Brand Keys’ Engagement Method at www.brandkeys.com


Published and Recognized Published and Recognized Loyalty Engagement ExpertsLoyalty Engagement Experts

41

How Will We Do That?How Will We Do That?

= Profitability


Brand Equity

Loyalty

Factor Analysis +

Regression Analysis+

Causal Path Modeling

FUSING

The Brand Keys MethodologyThe Brand Keys Methodology

Emotional Psychological Jungian-based PersonificationQuestionnaire

Rational Category

Attributes, Benefits & Values

Brand Equity MetricsExpressed as easy-to-read index

numbers and diagnostic bar charts



Aquetong Capital Aquetong Capital Advisors: correlations of Advisors: correlations of

0.83–0.900.83–0.90

Advertising Research Advertising Research Foundation’s Foundation’s First First

Opinion Opinion review.review.44

Real World ValidationThe Starbucks

Story


How Do They Buy in the Category?How Do They Buy in the Category?2007 Ideal Coffee Provider2007 Ideal Coffee Provider

110

120

130

140

Location & Value = 30% Service & Surroundings = 28%

Quality & Taste = 23% Variety & Selection = 19%

119

135

122

113

Ideal

Loyalty Drivers – Order of ImportanceHighest Lowest

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tom

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xpec

tati

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Low =Table Stakes

High =Differentiator

Percent of Contribution


Percent – Contribution of Percent – Contribution of Individual ABVs Driver #1: Individual ABVs Driver #1:

Location & Value (30%)Location & Value (30%)


2007 Customer Loyalty Engagement 2007 Customer Loyalty Engagement Index: Coffee Index: Coffee


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As customers articulate the increasing importance of Service and Surroundings at the start of ‘07, Starbucks loses it strength to Dunkin’ Donuts.

What happened?What happened?


Text of Starbucks MemoFrom: Howard Schultz

Sent: Wednesday, February 14, 2007 10:39 AM Pacific Standard Time

Subject: The Commoditization of the Starbucks Experience

As you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you.

Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.

Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces. For example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines. . . .

March 3, 2007

TALKING BUSINESSGive Me a Double Shot of Starbucks Nostalgia

By JOE NOCERA . . .

Last week, this Mr. Schultz was on vivid display when an internal memo he wrote to his top executives was leaked to Starbucksgossip.com. . . . He pointed, for instance, to the company’s decision some years ago to install automatic espresso machines, which, he wrote, “solved a major problem in terms of speed and service,” but also made buying a cup of Starbucks coffee a more antiseptic experience. . . .

Robert Passikoff, president of the brand consultant Brand Keys, said that Starbucks had taken its eye off the brand. “In trying to migrate from a coffee brand to a lifestyle brand, there has been a certain brand dilution.” He agreed that the “whole European coffeehouse experience” was no longer how people thought about Starbucks, to the company’s detriment .

© Brand Keys, Inc. 2008 50

http://starbucksgossip.com/

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Service and Surroundings are most important to customers at the start of ’08; Starbucks continues to struggle in the category they largely shaped.

2008 Customer Loyalty Engagement 2008 Customer Loyalty Engagement Index: Coffee Index: Coffee



51



Coupons

53


What Do You What Do You Need?Need?

54

This approach provides predictive answers to these questions:

•How do customers buy the category?•What’s important in the category?•What are customer’s expectations in the category?•How well does your brand meet (or even exceed) customer expectations?•What opportunities are available to your brand?

Strategic InsightsStrategic Insights



And a grip on And a grip on ““added-value”added-value”

56


ConvenienceConvenience

57


Year

How Convenience Contributes to How Convenience Contributes to LoyaltyLoyalty

58


The Brand Keys Research Metrics Difference The Brand Keys Research Metrics Difference

A predictive solution that is both innovative and comprehensive.

Easily integrated into current research efforts.

Anticipate the needs, wants and expectations of audience segments. What are the true value propositions that will drive behavior? How well is your brand meeting/exceeding expectations? How are your communications performing against those expectations?

By using our loyalty metrics, you receive leading-indicators of purchase behavior, re-purchase, sales and profitability. Anticipate needs; be predictive.

Leading-indicator loyalty metrics provide pre and post measures to demonstrate Brand Equity ROI, quantifying the impact of marketing initiatives ─ in advance of spend.


Thank you for your attention.

Robert PassikoffPresident, Brand Keys, Inc.

212-532-6028 [email protected]

www.brandkeys.com

Documents

You Want Loyalty? Get a Brand! INFOPRESSE Conference Centre Mont-Royal, Montreal 10 September 2008 Fidélisation