Frequency and Club marketing
Frequency marketing is the term applied to any program designed to generate brand loyalty and cultivate a long- lasting relationship with customers. Specifically, it encourages and rewards the ongoing purchase of products and services. Frequency marketing has existed in one form or another for a long, long time... One of the early programs began in an A&P grocery store in New York City with trading stamps. Stamps were collected as rewards for purchases and redeemed for fun merchandise or gifts. It was a guilt-free way for families to shop for discretionary goods. People enjoyed the process of pasting the stamps in books, setting their goals, then attaining their rewards. And, of course, they kept going back (thus the frequency) again and again to the store that provided the stamps. After the idea became successful, everybody put the program in place. Shortly after this all the grocery and gas station chains had trading stamps, and they became meaningless. Today, something similar is happening with frequent flier programs. Now that all the airlines have them, the competitive advantage is lost, and many airlines would like to drop them. There are also emerging "club" systems, s
G "Five Mistakes of frequency marketing" Direst marketing, March 1995SynopsisClub and Frequency marketing programs are two devices used to generate customer loyalty. They are a great idea, but they have to be well strategised and constantly rethought and reapplied. In the case of customer clubs, costs can be mitigated by setting enrolment fees so that the company breaks even or even makes a modest profit. Costs of frequency marketing programs compared to club marketing programs Frequency marketing campaigns can cost anywhere from a few hundred dollars to a million or more. Loyal investors are like partners. L, "Courting customer loyalty with a feel good bond", New York Times ,1997, p 10Barlow, Richard. Free or pay-to-join club programs are formal membership programs geared to generate significant incremental purchases of sponsored products. Every time you use a credit card to make a purchase or use your automatic-teller card, you're automatically entered in a sweepstakes. It has been found that a companies best customers are worth up to six times more then new customers. BibliographyMcDowell Edwin, "Rize Carlton's keys to to good survive", New York Times 1993Dwyer, F. The more products purchased, the greater the rebate. H, "Developing buyer seller relations", Journal of marketing, 51, April 1987 , p, 11- 27Stern, Aimee. It has been found that a companies best customers are worth up to six times more then new customers. Well set up and executed frequency and club marketing programs are able to produce great results. They are able to retain customers through the use of incentives and the feeling of being apart of the organisation because of these two schemes.
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