OgilvyOne launches Loyalty Index to improve targeting
HONG KONG - OgilvyOne has launched the Ogilvy Loyalty Index, which is designed to help businesses improve targeting and identify where the greatest profit opportunities lie.
The Ogilvy Loyalty Index is an OgilvyOne innovation based on an independent consumer study of half-a-million consumers worldwide conducted by Millward Brown, a sister WPP company.
The index can be applied to 16,000 brands in more than 100 product categories across 30 countries, including eight in Asia, and is updated annually.
For each of the brands covered by the study, the Ogilvy Loyalty Index reveals how they compare against their rivals and how only a very few customers account for the difference in market share.
According to Ogilvy, 5% of category buyers explain 70% or more of the difference between market leadership and being number two. The Ogilvy Loyalty Index reveals that the difference always comes down to high value customers and the degree to which they are emotionally loyal to the brand, often being 20 times more valuable than other customers.
John Goodman, president of OgilvyOne Asia Pacific, said: "In many cases, businesses are spending money on growing the category or their customer base but not on increasing the number of emotionally bonded customers -- those with most value. This is as wasteful as heating a house without a roof. Re-directing part of the spend towards the very few customers that make or break a brand delivers more bang for your marketing buck."
Ogilvy also hopes that the Loyalty Index will help companies improve their communications messages, making them more relevant to customers.
According to KienEng Tan, executive creative director at OgilvyOne: "When you are close to who you're talking to, there's no need to shout."
Some of the brands that have scored very highly on the Ogilvy Loyalty Index include: Yanjing beer in China; Watson's Mineral Water in Hong Kong; Cadbury's Dairy Milk in India; and 7 Eleven in Japan.
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