Loyalty Point… for everyone?
Somedays ago, a consumer good distribution company have called me for a discussion for a new project. They would bond retailers which currently in high demand for their products with incentive beyond financial scheme such as quantity bonus. They already had a sophisticated information system, which enable person in head office could monitor the delivery and order of a previous day. In this B2B situation whereas retailers naturally behave driven my profit and customers’ demand, they argue that the retailer could be more loyal by providing them loyalty point which extend immediate reward (usually monthly) to yearly in a form not limited to financial rewards.
After discussion I still think that this logical. B2B customer certainly can be lock-in, at least by establishing Key Account Management. As I start to think about the industry, that is consumer good, where end-customer can easyly go to other retailer if they not found the product they demand (because the product is convenience good), I think this logic is againts the market.
Obviously loyalty point is not applicable for everyone. CRM naturally establish in the situation where customer and supplier are in continuous relation, and the transaction is not discrete. But more important is relationship can be nourish if the product involvement exist, thus it is in shopping or specialty product. Research of CRM failure also stated that most failure in CRM implementation usually tracked down because they establish relationship/ loyalty to some “abstract” entity. Customer can be loyal to a very concrete brand, which important to them. If the most important is the maker, such in an automotive market thus Toyota brand is the one that customer can loyal to. But if in automotive market, which is product driven we establish loyalty to dealer…. it is a challenge if we would not say againts the market….
Last but not least, in strategic management perspective, as stated by Moore, focus on Relationship Management is very important if the industry is margin industry, not volume industry. In volume industry the key is product quality, differentiation, price and availability – the traditional 4P of marketing.
