More shopping is the challenge

[This article appeared in a supplement to Strategy sponsored by Loyalty Management Group.]Loyalty Management Group Canada focussed its marketing efforts in year one on awareness and enrollment.In year two, as the collector base grew, the company started to concentrate on ways...

[This article appeared in a supplement to Strategy sponsored by Loyalty Management Group.]

Loyalty Management Group Canada focussed its marketing efforts in year one on awareness and enrollment.

In year two, as the collector base grew, the company started to concentrate on ways of cross-activating the collectors, that is, getting to shop with more of the air miles sponsoring companies.

In 1994, with an enrollment of 3.5 million households across the country, that will continue to be the primary objective of the air miles marketing strategy.

Right now, the company is working on defining the target groups of collectors that it wants to concentrate on.

Jo-Ann Blondin, Loyalty Management Group marketing manager, Direct Mail, says:

‘We now have a database, and what we’re getting back from the database is information on what enrollment vehicles are best, what types of collectors are best, what are the psychographics/demographics and purchasing profiles of those collectors that are most active,’ Blondin says.

‘In 1994, we’re going to do a lot of research – do a little bit of testing against the hypotheses that come out of our research and refine what our segments should look like,’ she says.

Claudio Rodrigues, Marketing Manager, Advertising & Promotions says lmgc uses a large stable of marketing suppliers, and adds one of the challenges is to make sure the message that is going out is consistent across the board.

The company meets periodically with its marketing suppliers to lay out its plan and get their input.

air miles refines its research and presents it to the agencies to keep them focussed on three or four key air miles messages that need to be reinforced across all efforts.

Suppliers used by lmg are: DDB Needham Worldwide, Toronto handles English creative and media; Publicite Martin of Montreal, French-language creative; Strategem of Montreal has responsibility for the Quebec media buy; Promo Marketing handles national promotions; Hill & Knowlton of Toronto is the English-language public relations firm, and National, public relations for the French-language market.

‘We have a talented team of agencies that is working closely together to create one of the most exciting new brands in the country,’ Rodrigues says.

Communicaide produces the air miles newsletter that goes out to collectors, and Hughes Rapp Collins takes care of the rest of the direct marketing needs.

QRI International of Toronto handles national qualitative research for lmg; national quantitative research comes from Tandemar of Montreal.

Rodrigues says the air miles marketing program is showing strong results.

A tracking study conducted last November against competitive programs such as loyalty credit cards and merchandise programs indicated that air miles’ unaided awareness numbers were far and away larger than competing programs.

‘In first mention to the question, `Tell me what loyalty programs you know about,’ air miles came out No. 1 with a first mention 35% of the time,’ Rodrigues says.

‘Unaided mention was 51%,’ he says. ‘The next closest competition was 16% first mention and 32% unaided.’

air miles awareness cross-country continues to be high, according to lmg research. ‘Our aided awareness is 92%’ says Rodrigues.

Last November, air miles launched its first mega miles promotion. Twenty-one sponsors participated in a bonus offer book, which promoted traffic back and forth between sponsors.

The campaign was a success, promoting a second mega miles effort which launches this month. Six million bonus offer books will be distributed.

‘Our primary objective is to get our collector base going to as many different sponsors as possible,’ he says.

‘The secret to earning a free flight is to go to Shell and Safeway and Goodyear, and use as many sponsors as you can.

Coalition Database MarketingTM

Jo-Ann Blondin, LMG Canada manager, direct mail, says there are three key marketing reasons for sponsors to join the air miles program.

‘The first is for its database marketing capability because many of the companies do not have their own databases.

‘Next is coalition advertising, which gives sponsoring companies the ability to pool their resources to make their advertising dollar go farther.

‘Beyond that is the third reason, Coalition Database acquisition marketing.’

Database marketing has, historically, meant companies have demographic and behavioral information about their customers on a computer system and are able to segment that base to target specific customers with offers.

Coalition Database Marketing adds an acquisition component to that.

Because the air miles database has information about the customers of all of their more than 85 sponsoring companies, they can tell sponsors exactly who their customers are not.

That database can then be turned into a program for targeting potential customers.

Only air miles sponsors have access to the database, and the company does not sell the database to anyone outside of the program.

The database allows lmg to demonstrate results of all marketing activities.

Coalition advertising campaign

Shell Canada’s launch as an air miles sponsor in February 1993, is a textbook case of the use and benefits of coalition advertising.

Shell signed its contract with lmg in October 1992 and wanted to get into the marketplace quickly for competitive reasons.

lmg had equity in the air miles ‘Talking Heads’ campaign, which aired in the fall of 1992.

There was also equity in the air miles logo, which was now appearing in thousands of retail locations, in flyers, in print and tv advertising.

But Shell had its own brand identity it had been developing over the years.

Shell wanted to resuscitate its barrier break advertising, in which a car breaks through a barrier to illustrate how far a car can go with Shell gasoline.

Its research had shown the campaign had good recall, even though it had not run for several years.

‘We looked for a common ground, and introduced them to the idea of coalition advertising,’ Rodrigues says.

Since both companies were planning to create advertising and buy media to launch Shell as an air miles sponsor, efforts were co-ordinated to build a much larger campaign.

By having a consistent theme across the campaigns of air miles, Shell and other sponsors at that point, it looked like one large umbrella campaign.

Although Shell’s agency is Ogilvy & Mather West, and DDB Needham is the air miles agency, everyone worked together to co-ordinate the advertising.

The tv commercials used the same music and same format and each used both logos.

Production costs were shared by shooting the Shell spot and air miles spots, the second round of ‘Talking Heads,’ in the same studio on the same day.

air miles also made another spot, an introduction donut, which it now uses to launch new sponsors such as Boston Pizza, a Western Canada chain, which joined later in 1993.

‘We use the donut, change the logo and supers, and we have a launch ad ready to go that fits the ongoing campaign,’ Rodrigues says.

‘We can buy tv, the sponsor can buy tv, and if we’re running at the same time, it makes the campaign much larger,’ he says.

‘For example, most of Shell’s buy was cbc, and most of air miles’ buy was ctv. We really jacked up our reach because people watching it would see it as one campaign.

‘We leveraged that even further with our newsletter by using the same look of the Shell spot.

‘The other sponsors followed suit with in-store posters and counter cards that told everyone about Shell, in effect, creating a point-of-sale awareness campaign at several thousand locations across the country.

When Provigo, the Quebec supermarket chain, launched last fall, sponsor companies, again, worked together, following the template established for Shell.

‘That’s the Coalition Advertising advantage,’ Rodrigues says. ‘You’re already benefitting from millions of dollars of air miles brand equity.

‘Then, we triple or quadruple your reach by co-ordinating media buys and leveraging other sponsors’ communication and distribution channels,’ he says.

‘You can’t match that kind of return on investment with any other stand-alone advertising initiative.’