Speech Summaries

Mark Dixon Bünger Principal Analyst Forrester Research, Inc.

Selling Track: Forrester Analyst Panel: On Demand Analysis From Our Experts

Moderator: Christopher M. Kelley, Senior Analyst, Forrester Research, Consumer Markets

Mark Dixon Bünger, Senior Analyst, Forrester Research, Automotive

Henry H. Harteveldt, Principal Analyst, Forrester Research, Travel

Carrie A. Johnson, Senior Analyst, Forrester Research, Retail

Christine Spivey Overby, Senior Analyst, Forrester Research, Consumer Packaged Goods

Questions and Answers

CMK: What is a loyalty best practice in your industry?

CO: CPG has low-involvement products. One of the best practices that I've seen on the part of manufacturers is to move away from brand management and move toward a consumer focus -- loyalty is beginning to understand who your consumers are. P&G has great cohort marketing around beauty consumers, and Nestlé is targeting the baking community through verybestbaking.com.

CJ: Toys"R"Us actually has a loyalty program -- it segments customers to find the most valuable ones. Toys"R"Us can't compete on price and must compete on authority and selection. It says "Please don't go to Wal-Mart" without making customers sign up; Toys"R"Us proactively markets to its VIP consumers. This is working best in a retail situation where point programs aren't applicable.

CMK: JetBlue is hesitant to start a loyalty program. We say that airlines are commoditized -- what could make them unique?

HH: I'd kill loyalty programs. Measure customers not in terms of frequency but of profitability -- are customers coming through the right channels? Don't just look at revenue, but at how much you are netting from your customer. Many of us find incentives to pay as little as possible, but also we don't see improvement for paying more. In retail, you can buy a white shirt at many places, but you have to fly on a plane. In travel, you must create some kind of value in your product; otherwise you are based on price.

CMK: What old-school brands will we hear stand out next?

MB: There is a conflict between brands and products. Ford has the sub-brands -- people will be loyal within Ford. We've seen some experiment with retro designs, but they have not been tremendously successful: The VW Beetle was already discounted. Look at new brands like Scion from Toyota, and look for a real shift in the way people think about and use vehicles. They are not a source of pride and personal definition like they were for the earlier generation. Hybrid vehicles are a prime example of what cars today might mean to a consumer.