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>cases

Campbell-Ewald, the Detroit-based marketing communications company, part ofthe global Interpublic Group of Companies, is an award-winning consultancy. Thiscase describes the research behind its effort to measure and improve customerloyalty and the development of its five respect principles that lead to enhancedcustomer commitment. www.campbell-ewald.com

>Abstract

>The Scenario

Much has been written about satisfaction research in the last 20 years. But only recentlyhas the seeming disconnection between customer satisfaction and customer loyalty beengetting increasing attention. For two years, Campbell-Ewald1, the Detroit-based marketingcommunications company and part of the global Interpublic Group of Companies, studied oneaspect of the disconnection: respect. As a result of its findings, the agency is passionate abouthelping firms reforge respect bonds with their customers as a primary business strategy.

Campbell-Ewald is no stranger to this concept, which the Queen of Soul, Aretha Franklin,elevated to the measurable standard for relationships. Twice in this millennium, the agency hasbeen selected by AdWeek’s Midwest edition as its Agency of the Year. In lauding Campbell-Ewald, AdWeek noted that it has an average client relationship exceeding 20 years, while theaverage in the industry is a relationship that lasts only 5.3 years.2

David Lockwood, senior vice president and director of account planning, says what startedas an attempt to understand the disconnect grew into a major research initiative. It ultimatelyresulted in the identification of five “People Principles” for maintaining long-term relationshipsthat are helping Campbell-Ewald clients transform their business practices and their sales:3

• Appreciate me. Customers are the reason a firm is in business; they should be madeto feel appreciated.

• Intentions don’t matter; actions do. What a firm does is important, not what it thinksor what it says it will do.

• Listen, then you’ll know what I said. Companies that listen to customers have theability to adjust plans. Companies shouldn’t just collect information but should actuallytake direction from what customers say.

• It’s about me, not about you. What the customer needs is more important thanwhat the firm needs.

• Admit it, you goofed! The customer deserves an apology when the firm fails, evenif the failure isn’t the firm’s fault.

Customer relationship management (CRM) has been a mantra for the last decade, andunderstanding the status of CRM was where Campbell-Ewald started its quest of discovery.“Research from Gartner Group and Accenture told us that traditional CRM solutions—thelarge-scale hardware and software investments that track, then model customer contact points(‘touch points’)—weren’t working,” revealed Lockwood. “Published research indicates 60percent of CRM initiatives are not meeting user expectations. In addition, more than half (55

Campbell-Ewald:R-E-S-P-E-C-T Spells Loyalty

Used with permissionof Pamela S. Schindler© 2006.

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Campbell-Ewald: R-E-S-P-E-C-T Spells Loyalty

percent) of these programs are not delivering any demonstrable ROI. This may be due to thefact that often such initiatives are assigned to the IT group in a firm, the group that has the leastcontact with the customer.”

So when the purported solution seemed to sometimes exacerbate the problem, Lockwood’steam decided to look elsewhere. “Basically, loyalty is about personal relationships, nottechnology. So, we started by reading anything we could find on relationships—not businessrelationships, but people ones. We read everything: Dr. Phil (Phil McGraw—relationship guruand talk show host), Steven Covey (author of The Seven Habits of Highly Effective People),even the ancient philosophers, to identify the tenets of strong personal relationships.” In thisearly stage, Campbell-Ewald turned to two waves of Synovate’s TeleNation,4 an omnibus,nationally representative telephone survey, to see if “respect” was an issue people wereconcerned about regarding the way they are treated by companies.

Campbell-Ewald then set out to validate that customers were not being treated with respectand to prove that respect truly matters. “Repeated anecdotes—no matter how persuasivelytold—weren’t going to sway our clients as much as empirical evidence.” And as a business,the agency needed to know there would be a payout for the investment of time and money(estimated in six figures) in the research it planned.

Campbell-Ewald’s client list is impressive and draws from automotive, financial, insurance,travel, home furnishings, government, and retail sectors.5 “We wanted the research to reflectour clients’ needs, their situations, and we believed that respect translated differently in thedifferent sectors.” To understand the various dimensions of respect and how the five principlestranslated in each industry, the agency again partnered with research company Synovate toconduct 12 focus groups, 4 each in three sectors: insurance, airlines, and retail (home furnishings).Focus groups were conducted with adult men and women in both Chicago and Detroit.

“One of the reasons Synovate was chosen as a partner was because it has significantexperience with sophisticated multivariate analytic techniques, as well as large-scale mailsurveys,” shared Lockwood. From the focus groups, measurement questions were developedthat would clarify the core motivational drivers in each category. Also, attitudinal statementswere developed that would clearly define the parameters of respect in that sector and ultimatelyindicate the translation of each of the five People Principles. Clients were actively involved atthis stage as three different surveys were developed. Each four-page survey contained basicpurchase and usage questions, a full set of demographic questions, and 27 to 29 attitudestatements offering a 5-point strongly agree to strongly disagree scale. (See Exhibit C-E-1 forsamples of these statements.)

“Our clients provided names of customers, mostly from their top customers.”6 Fivethousand surveys were mailed to each sector. “Synovate maintains panels that offersignificantly higher response rates, but we wanted to use actual customers. And we wantedthe actual client disguised. So the surveys went out over Synovate’s letterhead, not theclient’s.” Participants returned between 5 and 9 percent of the surveys; thus each sector hada sample size between 200 to 500 cases.

Data were studied in the aggregate and by sector to answer the fundamental question:“Does respect matter?” Additionally, responses to individual attitude statements wereevaluated using a proprietary brand propensity model from Synovate, called The MomentumEngine, a methodology designed through multiple regression and correlation analyses toidentify consumers with the greatest potential to drive sales growth. These customers,labeled “Dynamic,” fall in a high-potential/high-relationship quadrant and can be comparedto other groups that offer lower sales potential or less established relationships.7

Data revealed that respect is a significant driver in each of the three sectors.While it was lowest among retail customers compared to those of insurance or airlines, itwas still significant. Clients, when presented with the findings, reacted with new initiativesto develop and cement loyalty among their customers. Several initiated loyalty audits andassessed whether their cultures supported or diminished respect for customers. Otherscreated task forces assigned to develop respect initiatives. The agency’s ContinentalAirlines client is a pioneer in respect marketing. One of Campbell-Ewald’s five respect

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Campbell-Ewald: R-E-S-P-E-C-T Spells Loyalty

principles, Admit it, you goofed, is clearly demonstrated in the airline’s Customer RecoveryProgram. If a plane is delayed, a connection missed, luggage lost—regardless of the cause—select Continental passengers receive a personalized apology within 24 hours.

And the change can be felt at Campbell-Ewald, too. Internal documents are changing.Ad campaigns are now more respectful in their creative development.But what most notice about the agency is its passion for the implementation of the fivePeople Principles. As Lockwood concludes, “Every customer touch point is critical to keepthose high-value customers. With respect, you can not only reinforce positive feelingsabout a company or brand, you can even—at times—turn a negative experience into apositive, brand-building interaction.”

1 How would you operationally define the construct of respect? Take theperspective of each of the three client sectors: insurance, air travel, and retail.

2 Map the overall design of the research described here.a What types of studies were involved in Campbell-Ewald’s respect initiative?b What are the strengths and weaknesses of the various methodologies?c How do the methodologies complement each other?

3 Analyze the use of the 5-point scale for measurement of respect dimensions.What other statements would you add to the sample provided in Exhibit C-E 1-1.

4 Discuss the advantages and disadvantages of the sampling plan for the mailsurvey.

1 Campbell-Ewald, with billings in excess of $155.8 million, is ranked 13th among U.S.

>>>>>Discussion

Strongly Agree Neither Disagree StronglyAgree Agree nor Disagree

Disagree

General Respect Initiatives, across categories

Is interested in listening to what is important to me as a customer

Places their own interests above those of the customer

Notifies me in advance of sales and special promotions

Rewards me for repeat business

Honor commitments/promises they’ve made to me

Specific Respect Initiatives, with category

Accepts returns without a hassle (retail)

Flights take off and land on schedule (airline travel)

Handles claims in a timely manner (insurance)

Exhibit C-E-1 Sample of Attitudinal StatementsResearchers asked particpants their degree of agreement with several respect validation statements.A sample of these statements, developed from focus group discussions, appears below.

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Campbell-Ewald: R-E-S-P-E-C-T Spells Loyalty

agencies. “Top 25 U.S. Agency Brands by Core Advertising Revenue,” 2003 Ad AgeAgency Report, AdAge.com, downloaded February 11, 2004 (http://www.adage.com/page.cms?pageId=975).

2 Tanya Irwin, “First Class: Campbell-Ewald charms the USPS and Plenty More Chevydealers,” AdWeek, 44, no. 3 (January 20, 2003). (Reprint downloaded from Campbell-EwaldWeb site, February 10, 2004.)

3 David Lockwood and Laurie Laurant Smith, principals with Campbell-Ewald, interviewedby phone, February 9, 2004.

4 “TeleNation is a twice-weekly national omnibus survey surveying three waves of 1,000American adults each week. Each wave of 1,000 American adults is balanced to benationally representative. The sample consists of 50% men and 50% women, 18 years ofage and older. Each survey is conducted using random digit dialing. “TeleNation,”Synovate.com, downloaded February 12, 2004 (http://www.synovate.com/en/solutions/branded_solutions/omnibus_telenation/).

5 Among Campbell-Ewald clients are ACDelco, BISSELL, Chevrolet, Continental Airlines,General Motors, Farmers Insurance, Michelin, National City, Pier 1 Imports, U.S. Navy andU.S. Postal Service. Irwin, “First Class.”

6 For example, Continental Airlines drew customer names from its One-Pass frequent flyerlist.

7 “Branded Solutions: The Momentum Engine,” Synovate.com, downloaded February 12,2004, (http//www.synovate.com/en/solutions/branded_solutions/the_momentum_engine/).

This case was developed for Business Research Methods 9/e from interviews withand material provided by principals of Campbell-Ewald. Used with permission ofPamela S. Schindler, © 2006.

>>>>>Notes

>>>>>Source