Keeping High-End Customers With Old-Fashioned Problem Solving

A successful loyalty program is not about points and rewards

Published: Tuesday, July 26, 2016 - 08:20

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s the document and imaging industry evolves, imaging workflows become more sophisticated, and products increase in complexity. But with innovation, the industry has faced a new problem: customer confusion. Workflow management now involves both traditional end users in the office as well as IT departments to establish the connectivity that makes these multifunctional machines most productive.

Maintaining brand loyalty among such a diverse customer base isn’t easy, but Canon USA hit upon a successful strategy early on. This came about in part from the company looking ahead and establishing a successful loyalty program that benefited all its stakeholders.

David Hughes, an experienced database marketer at Canon, headed up the project. He realized that the ideal loyalty program structure wouldn’t be about points and rewards. He felt that rewards programs were expensive, too easy to copy, and difficult to suspend. Even more important, they tend to commoditize the brand and divert customer attention away from the brand value to the program itself.

Hughes also recognized that his challenges would lie in two areas. First, he needed the cooperation of Canon’s distribution channel—the independent resellers who considered themselves the “owners” of the end-user relationship. Second, he had to build a single record of end-user customers from legacy operating systems and miscellaneous data sources on spreadsheets.

Hughes’ solution was to create a program that addressed each customer’s business environment. The program focused on educating customers about the best products for their situations, and identifying any problems or areas of dissatisfaction they might have. A series of newsletters, personal emails, and email blasts were sent out at least quarterly; in cases like large accounts with high-end equipment, communication was as often as once a month. Messages were customized to the needs of individual contacts, based on the contact’s role in the buying process, the industry, and the installed Canon products. Each communication asked for some kind of response, whether to update the customer profile, ask questions, participate in a survey, or identify a problem.

“We were walking a fine line,” says Hughes. “We wanted to identify problem areas, notify the reseller, and get the problems resolved—without appearing to be Big Brother monitoring dealer performance.”

Since establishing the loyalty program, Canon has experienced measurable improvements in both its interactions with end users and its relationship with the dealer channel. “Before this program, there was no system for inviting customers to provide input on their experience with our products,” says Hughes. “Now we’ve observed a significant increase in satisfaction levels, driven by our new ability to identify problems early and send in the reseller for follow-up. There’s been gratifyingly strong increases in customer satisfaction and willingness to refer.”

Canon has also seen dramatic improvements in its ability to partner with its resellers. “Of course, there was a certain amount of panic when we began talking with dealers during the program planning phase,” says Hughes. “They were afraid our intent was to interfere with their control of the customer relationship.” Emphasizing the clear protocols, business rules, and data security measures he’d developed, Hughes was able to persuade a number of progressive dealers to join the program. Since then, participating dealers have been so pleased with the co-branded message streams that many other dealers have signed up.

Canon is measuring the program results in three dimensions:
1. Specific metrics of program performance, such as satisfaction rates and response rates (some have been as high as 8%)
2. Credibility and relevance of the communications, as measured by surveys and focus groups
3. Actionable improvements in data hygiene, such as the growth and accuracy of the information about customers in various segments

This last metric has provided Hughes with some major bragging rights. He tested the value of data hygiene by splitting a file, cleansing only half, and sending the same communication to both halves. The cleaned-up names responded eight times better, and the dirty names resulted in 20 times more undeliverable messages.

“With that experiment, I’ve been able to demonstrate that our program is saving Canon hundreds of thousands of dollars in wasted communications by eliminating bad records,” says Hughes.

When asked what he would do differently, Hughes chuckles. “The only thing I might change is the speed with which I brought in the resellers,” he says. “I should have been out selling the program to them earlier in the process. Canon’s relationship with its resellers has improved by leaps and bounds.”

Hughes cites two elements that were key to the program’s success. “The first was educating our installed base about getting the most from their Canon products,” he says. “The second was creating the ability to ferret out problems and get them fixed. This is what generates loyalty, repeat purchase, and positive word of mouth.”

First published on the Ruth P. Stevens website.

About The Author

Ruth P. Stevens

Ruth P. Stevens consults on customer acquisition and retention, and teaches marketing at business schools in the United States and abroad. She is a guest blogger at Biznology, AdAge, HBR.org, and Target Marketing Magazine. Crain’s BtoB magazine named Stevens one of the 100 Most Influential People in Business Marketing. Stevens is the author of B2B Data-Driven Marketing: Sources, Uses, Results (Racom Communications, 2015) and Maximizing Lead Generation: The Complete Guide for B2B Marketers (Que Publishing, 2011). Stevens has held senior marketing positions at Time Warner, Ziff-Davis, and IBM, and holds an MBA from Columbia University.