Sony store makes a Connection with customers

Your wife complains that you’re not very good at expressing your feelings. What do you do? Naturally, you tell her that you love her and you buy her a nice, romantic gift. Simple enough strategy.

But what if you’re a major corporation and your most loyal customers are complaining that their loyalty isn’t being duly acknowledged? Well, after a series of focus group studies suggested that its most devoted customers were feeling somewhat neglected, the Sony store rolled out its own version of a nice, romantic gift – a relationship marketing program that constantly reminds loyal customers just how much they’re appreciated.

That, according to Blair Severn, national marketing manager for the Sony store, was the genesis of the Sony store Connection, a customer relationship marketing program that kicked off earlier this summer.

Describing the nature of the program, which was developed with the assistance of Toronto-based Lowe RMP Direct, Severn says it is primarily intended to keep the Sony brand top-of-mind with customers who have already exhibited a propensity to buy Sony products directly from the manufacturer – even though they’re priced at a premium.

Information is the key element of the program, says Severn.

‘It’s not a loyalty program in the traditional sense, which would be to develop a database, mine it and give the customers some rewards for repeat purchase,’ he says. ‘The reason we can feel comfortable marketing to them is that they’ve told us specifically that they prefer to have a relationship with the company.’

Secure in the knowledge that its customers are neither bargain hunters nor tire kickers, the retail division of Toronto-based Sony of Canada wanted to ensure that it did not do anything to cheapen the relationship it has with its customers. It also had to ensure that nothing it did to promote its own stores infringed on the territory of the thousands of other retailers across the country that carry Sony products.

‘Historically, this business has not been marketed to the public in such a way,’ says Severn, ‘because there was just such an extensive fear that it might end up challenging Sony’s dealer base.’

However, unlike the vast majority of retailers in the marketplace, the Sony store makes no attempt to compete on price – everything in the store sells at list price. The very existence of the stores is meant to promote the quality of the Sony brand and to give consumers a complete picture of everything Sony has to offer, from portable Walkman stereos to complete home entertainment centres.

Launched in Canada in the early 1980s, the Sony store is the only national chain of retail stores in Sony’s worldwide organization, although there are some franchise operations in the U.S., U.K. and South America.

‘It’s really the only place where a customer can go in and completely experience the Sony brand and interact with it on all sorts of dimensions,’ says Severn, pointing out that the key factor in ensuring Sony doesn’t cannibalize sales within its dealer network is to stick to a strategy of building the brand. By doing so, he says, everyone in the Sony supply chain ultimately benefits.

With that in mind, the first mailing in the Connection program, which was sent to 50,000 Sony store customers in June, comprised a self-mailer promoting the new Sony Digital8 Handycam video camera. Although the mailing offered recipients an opportunity to enter a contest to win a $5,000 shopping spree, there was no additional incentive offered to persuade customers to buy the product.

According to Severn, the company has not yet begun to segment its database according to any kind of RFM (recency, frequency, monetary value) criteria, but that it plans to once it gets more of its estimated 750,000 customers enrolled in the program.

‘We will certainly be mining the database for patterns,’ he says, adding that the company may eventually target its communications to match customer interests. ‘We want to make sure we develop our relationship with the customer on their terms, and that will take some learning.’