Building the Loyalty Agency: Why communications need a new force for planning

…because I believe brands should only invest in marketing
communications through existing users of their brand

Lead_image_8_loyalty_agency

Fragmented thinking: fragmented implementation

Planning for Transactions requires the alignment of three
distinct disciplines – CRM (including where appropriate DM channels), word of
mouth marketing and broadcast media – into one holistic channel plan.  And that requires a whole new force of
agency.

The last decade has seen the emergence of a whole new ball
game.  Media fragmentation; consumers
with less time, little attention and no patience; an infinite amount of
broadcast and on-demand content; digitisation rendering channels irrelevant
(see note 1); technology to control and filter demanded content (see note 2)…

The collective response of the communications industry has
been to diversify into a multitude of different and varied operations (see note
3).  It is this diversification that is
partly behind the lack of cohesion between word of mouth marketing and mass (or
broadcast) advertising (see note 4).

Agency silos generate silos of implementation.  In an interview for this essay a data planner
(see note 5) highlighted the current difficulty he was having aligning CRM and
broadcast timings (let alone the strategic development) for a campaign on which
he was working.  The planning of retention
(loyalty) and mass media are in concept as well as in implementation operating
in different worlds.

This division isn’t however limited to agencies.  Marketing departments within clients operate
in the vast majority of instances separately from their CRM counterparts.  The opinion of Andrew Wythes at Eurostar is
that “in theory, a lot of companies are bringing the two together, with CRM
becoming more aligned with marketing”. 
But he also observed that – for Eurostar – this is predominantly around
specific projects, for example Eurostar’s transfer in 2007 of international
rail operations from Waterloo to St Pancras. 
In that instance “marketing and CRM worked really well together … it is
the day to day where it’s less aligned; CRM needs to break out and do its own
thing over and above the loyalty scheme, and in doing so focus on what our
customers really want” (see note 6).

The Loyalty Agency

Transaction planning – as a solution to our new paradigm –
requires alignment of the three distinct disciplines of CRM, word of mouth and
broadcast media into one holistic channel plan. 
Developing such a plan necessitates the creation of a single agency
offering; an agency whose positioning isn’t articulated around
solution-orientated concepts such as Different, Pioneering, Ideas, or ROI – but
that is instead positioned around a business-orientated concept; the concept of
customer loyalty.  To do so, such an
agency would integrate three key functions.

The Loyalty Agency - structure

Figure 4: the three core roles within the Loyalty Agency

  • Function one: CRM and data strategists, working with brand
    CRM teams to mine customer databases for information on who customers are, as
    well as the identification of who’s leaving and who’s hanging around.  They’d develop customer retention (loyalty)
    strategies.
  • Function two: word of mouth planners, identifying relevant
    consumer touch points and developing, as a result, appropriate collateral with
    which to deploy with the aim of mitigating defections ie, engendering loyalty.
  • Function three: Channel neutral planning.  Working closely with the former two
    functions, their role is to develop strategies that use channels and
    specifically mass communication to convey the existence of collateral to
    existing consumers in such a way that it’s overheard by potential customers.

An important point to make on our proposed Loyalty agency is
that their output is first and foremost the creation and deployment of relevant
and equity-generating collateral for a business.  In doing
so it creates an extension of that business’ product or service.  For clients, working with such an agency
would mean working with an agency partner that encouraged marketing effort to be
a part of the business; rather than a signpost to it (see note 7).

Integration with other agencies

Despite the assertion that “Integrated Communications are
like weapons of mass destruction; everyone knows they exist but no one has ever
seen it done” (see note 8), coordination with other agencies will be key.  In particular the role of creative agencies
(see note 9) is fundamental to planning Transactions in two key ways (see
figure 5).  Firstly, along with PR and
other agencies, they’d work with word of mouth planners to help shape the
collateral that is developed.

The Loyalty Agency - integration

Figure 5: Loyalty agency integration with clients and other
agencies

Some of the most forward thinking creative agencies are
already operating in this capacity; I’ve already mentioned Mother’s musical for
Pot Noodle.  Last August Bank Holiday
also saw Eurostar’s Ebbsfleet station host a drive-in movie for existing and
potential Eurostar customers (see note 10). 
The creative concept – as well as much of the infrastructure for the
event – was created by Fallon, working alongside experiential agency Space.

Secondly, creative agencies would continue to work to the
more conventional creative brief, but with a key difference.  Rather than communicate a branded product or
service proposition with the intention of recruiting – through awareness et al
– potential customers to that brand; they would instead work with a brief to
communicate the collateral developed earlier in the process.  Their communications would be developed with
the sole aim of communicating to existing customers (but overheard by potential
customers) the existence, use, or consequence of that loyalty-generating
collateral.

Notes

1. Once content is digitised, not only it can exist in any
digital channel, but move seamlessly across channels.  It is this intrinsic that led William Gibson
to first comment that “The remix is the very nature of digital” – ie
digitisation of data and content facilitates transformation – remixing – of
that content.

2. Example of on demand include RSS (Really Simple
Syndication) which automatically relays content deemed relevant to the
consumer, and IPTV (Internet Protocol Television) – TV via broadband, which is
currently seeing substantial investment by UK TV companies.  To quote Rob Norman in his speech Do
Different “In the final analysis the world has gone on demand.  That puts it beyond our control”.

3. And a lot of specialists there now are; WPP Group has 247
companies globally and 194 offices in the UK alone.  All companies relate to communications
services “Through our companies, WPP offers a comprehensive and, when
appropriate, integrated range of communications services”.  Source: http://www.wpp.com/WPP/About/

4. The many and varied agency operations are also behind
failure to join up the dots across a range of other disciplines – but this lies
beyond the scope of this essay.

5. Interview with Tim Noblett, Data Strategist at ævolve,
part of Aegis Media.

6. Interview with Andrew Wythes, Customer Relationship
Management, Eurostar.

7. In 2006 BBH launched Zag. 
Fully funded by the agency it aims to create and develop new brands,
which it will license or sell to third parties in return for a share of ongoing
sales revenue.  More recently New York
agency Anomaly is to open its doors for business in London.  The agency will be run on a model that
divides the agency’s revenue streams into part fees, part IP share.

8. David Jones writing in Contagious Magazine.  Is Your Work Spongeworthty?

9. It is the deliberate intention that creative agencies sit
outside the proposed Loyalty agency, for a very specific reason.  Given the close proximity in which the
Loyalty and Creative agency would work, it would seem logical to align the
operations into one agency.  This is the
move DraftFCB made when it aligned content creators with data analysis in its
2006 merger.  But uniting the silos into
one operation within the Loyalty agency would be a flawed move.

At the time of writing, Endemol is eyeing up a possible
takeover of ITV (Source: Financial Times. 
John de Mol commenting on ITV: “This one is an example of a combination
that could make sense, depending on the numbers.” Full story at: http://www.ft.com/cms/s/0/02d15dca-5110-11dd-b751-000077b07658.html)

Commenting in MediaWeek (19th August 2008; “Being the best
at what you’re best at is surely the best advice”) Richard Eyre observes that
“it’s a trap. … Successful content owners diversify their routes to
market.  Successful distributors source
the best content wherever it can be found. 
Both need a diversity of relationships to stay at the top of their
game”.

Similarly it would be a trap to align our Loyalty agency and
a Creative function into one operation; the former must be able to work with
any and every creative agency that appreciated the value of existing
customers.  Ultimately brands would be in
a better position to benefit from the diversity those creative agencies would
bring to the loyalty table.

10. For more information about Eurostar’s Ebbsfleet drive in
see: http://www.eurostar.com/UK/us/leisure/about_eurostar/press_release/eurostar_host_drive_in_cinema_at_ebbsfleet_international_station_over_august_bank_holiday_weekend.jsp

Tomorrow: a holistic approach to metrics
Friday: Making it happen… Relentless case study

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