Marketing Based on Customer Data Increases Sales and Loyalty

May 24, 2004

By John Hennessy

“What we all hate is when companies we do business with talk to us as if they don’t do business with us.”

That powerful quote, from David Hughes, manager, database marketing for Canon USA Inc’s Imaging Systems Group, doesn’t surface until the end of the May 10, DM News article entitled, “Canon Loyalty Program Yields Clearer Image of Its Customers.” The focus of the piece is on the creation of a customer database compiled from Canon’s dealer network and the targeted marketing campaigns executed based on this new, more cohesive knowledge bank.

The article describes how Canon executes targeted direct mail and e-mail campaigns for its dealers in exchange for those same dealers providing customer purchase information. Dealer names are featured prominently on all marketing pieces, helping drive business to the dealers and sales for Canon.

Marketing pieces are selected based on products currently owned, similar products owned, as well as customer profile and workflow patterns. Results of the program are left to the reader’s imagination.

Moderator’s Comment: What other companies are helping their dealers or retail partners sell their products through
customer-based marketing initiatives? What keeps this model from happening more often?

I got curious about the results of this initiative so I called David. He was gracious enough to expand on what was included in the original article.

David was willing to share that most of the large dealers participate in the program. Customer satisfaction and loyalty, which Canon measures periodically,
are both up. Canon also tracks likelihood to recommend and repurchase. Both are increasing.

Canon has received top honors from the Brand Keys ( Loyalty Marketing award in the Office Copiers category for all years from 1999 through
2003. Most recently, they have moved their position on the Brand Keys Customer Loyalty Leaders Brand Ranking from 12th place in 2002 to 8th place in 2003, placing Canon above
Marriott Hotels, Ritz-Carlton Hotels, L.L. Bean and Budweiser.

Fortunately for Canon, its dealers and their mutual customers, David understands the importance of listening to, taking the time to understand and using
that understanding to respond to customers. He knows Canon’s customers prefer being spoken to intelligently. After all, these customers have voted with their wallets “FOR” Canon.

David also realizes that all this work results in returns. Canon creates customer pull for its dealers. That pull creates demand for the products those
dealers offer, which may include other brands. The demand he creates is demand dealers certainly want to create but are unlikely to have the time or resources to execute. As a
measure of dealer loyalty to the work Canon is doing, that demand is satisfied with Canon products resulting in sales for Canon.

Suppliers and retail marketing partners in other markets could benefit from adopting David’s approach. The volume of customer data in other markets may
be larger. That larger volume is too often viewed as an obstacle. It should be viewed as a unique opportunity to differentiate through customer-based marketing.

I am sure all the new data David collected looked daunting to him when he launched the program. Rather than see a data management problem, David chose to
see a customer marketing opportunity — a way for Canon to differentiate itself, help its dealers and demonstrate to customers that Canon appreciates the business they do with

John Hennessy – Moderator

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