Building Brands Brand Equity Brand Equity is defined

Building Brands

Brand Equity • Brand Equity is defined as: – Financial “asset value” of a brand – Derived from goodwill and loyalty it has built among customers – Has high awareness and perceived quality – Better imagery and personality associations

Brand Equity • High Brand Equity brands • Can extract higher prices • Customers repurchase the brands more often than they should • Have loyal customer bases • Preference and loyalty higher • Not because the product is functionally superior • But consumer perceptions of the brand is better

Brand Equity • The associations of the brand in the consumers mind create – An intimacy and loyalty towards the brand. • The associations do not vary much across segments • The role of marketing is to • Build awareness to communicate high quality • Create or modify product associations • Build higher loyalty • Direct marketing useful for building brand equity when target segment is • Narrower, and • Difficult to reach

Building Quality Reputation through Direct Marketing • Communicating Quality – Detailed claims about product features and benefits – Stronger communications about why a product is superior – Can provide customized messages to different customers – Maximize the perceived degree or value and quality communicated

Building Quality Reputation through Direct Marketing • Achieving Credibility – Understand refute customer objections – Cite testimonials from satisfied customers – Offer guarantee for satisfaction • Frequency of post sale contact – Lower follow up costs to monitor and improve customer satisfaction

Building Associations • Communications should be designed to – Convey product information – Overcome consumer inertia to buy – Build the linkage between the brand, and its symbols that possess “cultural meaning” • Loyalty – Two types: behavioral and attitudinal – Attitudinal better for building brand loyalty

Customer Service and Database Marketing

Customer Service Department • Historically functioned as complaint center. • Today technology has allowed order processing and next day shipment. • Companies who do not meet baseline service standards cannot survive. • Service focus has shifted from product focused to customer focused.

Customer Service Department • Customer service is the primary channel of contact between both prospects and customers • Responses given by Customer Service Representatives are critical for maintaining and building relationships. • Proper service provides opportunities for cross-selling, affinity selling, and upselling. • Most overlooked aspect- easy data collection.

Information Needed by Customer Service • Basic Name, address information about the customer • Company to customer communications • Bills, shipments, and promotions • Customer to company transactions • Payments, returns, and complaints • Details about products, services, policies, and procedures. • The information needs to be timely, accurate and complete.

Marketing Information • Two types of information collected: • Static and Dynamic • Static Information – Basically Name, address information – Primary use is for mass mailings – Customer service can be used to fill in any missing customer details

Dynamic Marketing Information • Information regarding expected and unexpected event. • Expected event – Initiator could be company or customer. – Example: response from a customer regarding a promotion, or bill – Historical information regarding customer events needs to considered when contacting a customer

Dynamic Marketing Information • Unexpected events – Example: customer complaints, returns or inquiries. • Current systems provide only summary information as to whether the contact was an order or complaint. • Systems need to capture information at a better detail. • Information requirements: • initial mode of contact, • whether the problem was resolved or not, and • how it was resolved • Integration between all modes of communication required.

Survey Data • Survey data normally collected by market research firms. • Only summary data maintained. • The detailed data regarding specific responses is also useful for database marketing. • Customer service can: • Obtain survey data when customer initiates contact • Use historic survey data to initiate contact with customers in a timely fashion

Issues with survey data • Surveys sent to only a sample of customers. • Only a percentage of the original sample respond. • Detailed information available only for a small percentage of the total customer base. • Initial database design required to integrate survey data with marketing data already existing.

Information Required for Customer Service • Service representatives require information about individual customers when initiating dialogs. • Information provided by the marketing database includes • Whether the customer is a gold/platinum member. • Product/services customer should be made aware of. • Information the representative can collect from a particular customer. • The representative is in closest contact with the customer. • Canned or broadcast oriented messages do not work here

Customer Service on the Internet • Historically web sites gave out only 800 numbers. • Currently web sites are more dynamic and provide: • Product support and FAQs • Provisions for complaint e-mails • Separate corporate intranet access for dedicated customer service

Customer Service on the Internet • Pros: – Cost effective – Better reach – Faster service • Cons: – Restricted currently to Gen. X – Internet has a Pull strategy Vs. Push strategy of traditional direct marketing – Capabilities restricted by customers’ computers

Customer Service on the Internet • Future: – Common web sites serving both customers and service representatives – Access to information for customers restricted through intranets – Customer service representatives can have updated information in real time.

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