Guest post by David Norton, author of The High Roller Experience.
A major challenge and missed opportunity for multi-brand companies is an inability to treat customers seamlessly and holistically across brands. Most often customers are communicated with through the lens of organizational structure as opposed to developing a plan that is best for the customer and the enterprise as a whole. The desire to maintain business unit autonomy trumps creating a centralized approach that would provide a more seamless approach for customers.
The Power of Loyalty Programs
In my time at Harrah’s / Caesars, we made it clear that the customer was the company’s as a whole and not an individual brand or market’s. We could prove analytically that customers who visited more properties and markets were dramatically more valuable both in the short and long-terms. Our loyalty program Total Rewards was the powerful conduit to move customers across our resort network and reward them for doing so. While more than half of our revenue was from customers playing at a property other than their most frequently visited Total Rewards property, in 2010 we still saw there was a significant opportunity to drive more x-brand revenue, and to capture it we altered the bonus structure to include a meaningful portion that was tied to driving revenue to sister properties.
In nearly all CPG and retail organizations, the dominant organizational design principle is silos by business unit / brand which enables P&L accountability and authority. Each business unit manages communication to customers that are known to them, and if a consumer shops multiple brands in the portfolio, the amount of marketing materials they get increases linearly. In some situations, customers may not realize that a company’s brands are affiliated, and they are not offended by the volume of contact. In other situations, consumers are aware it is the same company and get frustrated that there is a lack of continuity in messages they get. Especially when the brand portfolio is complementary in its product, incorporating everything that is known about the customer across brands can be a powerful way to engender loyalty.
The Importance of Managing Customers Holistically
From an organizational point of view, money is being left on the table by not managing customers holistically. Like at Harrah’s, with several of our retail clients, analysis shows how much more valuable multi-brand customers are then single brand customers, even when it is not explicitly communicated that the brands are affiliated. One solution is to create a unifying loyalty program across brands like we did for one client, while keeping the power of the individual brands strong operationally and in marketing communication. In another retail organization, we determined analytically several characteristics that were disproportionately seen in multi-brand customers, built models and identified a portion of low value customers who had a strong likelihood to become more profitable multi-brand customers and targeted them through discrete and targeted direct marketing.
The “who owns the customer dilemma” is one of many common business challenges that I address in my new book The High Roller Experience. The book reveals how we used data to identify and quantify brand-building opportunities for Harrah’s/Caesars Entertainment and offers critical insights into analytics, CRM, loyalty programs and the required organizational dynamics for success. Insightful and current case studies from GALE, a next generation agency, demonstrating the applicability of using data science to improve marketing effectiveness and the customer experience to a broad array of industries, are featured throughout the book.
David Norton is the Chairman and Chief Marketing Officer of GALE, which helps clients transform their businesses by bringing together the expertise of a top management consultancy with the creativity of an ad agency, backed by strong digital and data analytics capabilities. Prior to that, Norton spent 12+ years at Harrah’s / Caesars Entertainment as the Chief Marketing Officer, where he was the architect of the company’s marketing capabilities.