*Originally published by the Aimia Institute - the marketing thought leadership centre for Aimia, a data-driven marketing and loyalty analytics company that provides leading advice to global marketers by combining data analysis, expert opinion, market research, and best practices.
By Marta Lucia Restrepo, Associate Professor, Researcher and Consultant at CESA School of Business.
Welcome to 21st-century marketing, where the challenge for marketers is to build relationships with their customers amidst a world where the consumer is increasingly exposed to, and impacted by, an online world and where they are tuned into global consumption patterns. And this is exactly what is happening in Latin America (LATAM).
The Global Retail Development Index (GRDI), which analyzes the thirty most successful markets in the world, shows how LATAM markets are moving from the "opening" stage to the "growing" stage of development, with Chile, Uruguay, and Brazil in the lead, followed by Peru, Panama, and Colombia. This trend is fueled by both a growing middle-class in these countries and increasing digital consumption.
The digital ecosystem of the region is evolving rapidly. Latin America now accounts for ten percent (10%) of the global Internet audience, made up of over 176 million online users. Individuals who spend over twenty-one hours online per month on average, which exceeds the global average of sixteen hours. According to Comscore, sixty percent (60%) of this audience is younger than 34 years of age and young people are identified as the main consumers of retail offers.
Without a doubt, the job of the marketer in the Latin American retail sector has shifted dramatically over the past five to seven years. Consumers have shifted from a physical to a digital retail environment easily, and now these worlds are gradually blending together.
Latin American marketers are now focused more than ever before on identifying customers and understanding their likes, habits, and preferences. They want to bring this knowledge into business strategies that will win over the customer forever. But is this possible? To meet this goal, companies have turned to data to guide them. Data-driven insights will allow them to approach customers in a friendly, personalized way amidst a ruthlessly competitive environment. The universal example of this practice is Amazon's ability to deliver personal recommendations to customers.
Relationship marketing, when adopted as a philosophical and technical practice, is a key ingredient for marketers to be successful create loyal Latin America customers. It blends an organizational mindset with a "modus operandi" that is based on four pillars: people, processes, technologies, and supporting industries.
The first pillar, People, refers to the ways that you work for, with and through different individuals, consumers and citizens. Making people the essence of relationship marketing.
Marketers need to be aware of how Latin American consumer characteristics are changing. For example, there is a history of stereotypical advertising that embraces the "macho" culture of Latin America. However, consumers are pushing back, both male and female, and companies that only create ads that portray men in this light risk offending much of this audience.
Similarly, stereotypical ads may also showcase a housewife. However, in this region, over the last decade there has been a significant influx of women entering the workforce — with more purchasing power than ever before. Furthermore, there are increasingly more single moms and more single individuals since people are now getting married later. Marketers need to correct their bias and adjust their advertising messages and images to remain relevant and competitive.
The second pillar is Processes, which refers to the way relationship marketing is integrated into the performance of the organization, often in an interdisciplinary way, within a supply-and-demand market. For example, Colombia's bank Colpatria, was faced with a large number of their customers arriving by motorcycle at their retail bank locations. So they adjusted their processes to create a special service that now allows customers to conduct their banking directly from their motorcycles.
The third pillar is Technologies. Customer Relationship Management (CRM) technologies have become critical in relationship marketing because these tools provide knowledge about the customer that was not previously available. With consumer data, companies can personalize their offerings to their customers. For example, Colmédica, a private health provider in Columbia, uses data to customize the content of its communication for each customer according to his or her current medical conditions. To accurately deliver these messages requires infrastructure that can provide insight into each and every one of their customers.
The fourth, and final pillar, is Supporting Partners. To fully enhance your relationship marketing capabilities, there are external partners with expertise that can provide marketers with the necessary support for customer management, delivery platforms, communication models, process automation, and service applications, among others.
By adopting these four pillars, brands in Latin America will be able to measure and set goals for their customer relationships in a variety of different ways. Loyalty can be driven by actions that increase consumption, increase frequency of visits, drive repeat purchases, and drive an increase in brand preference.
Loyalty is an element of the 21st-century marketing revolution, specifically it brings together customer-centric and entrepreneurial thinking within a more formidable context, one that enables brands to be relevant.
And the customer should now be truly at the core of your business' strategy. By example, Nosotras is a brand of the Latin-American company, Familia Sancela. The Nosotras website gives tips about using their products and actively engages website visitors to earn points by entering codes, found on product packages, that they can then accumulate and redeem for rewards online. They have created an ecosystem for their customers to interact with the brand.
Finally, the role of the marketer has shifted to include a responsibility for leading the coordination of other functional areas when related to customer management. And this is often in a technical, structured, but very relevant way to a relationship marketing program. This is enabling marketers to prove that understanding your customers — alongside earning their loyalty to the brand — is an asset of immense economic and strategic value for any company.
Marta Lucia Restrepo Torres is Associate Professor, Researcher and Consultant at CESA School of Business. See her profile to read more of her articles.