Trust is the ultimate driver of customer loyalty. As long as the trust is enabled with the proper tools, and properly maintained, customers will return again and again. The moment it is broken, they will disappear and will likely never return again.
As we can imagine such a lack of trust can have extremely negative consequences for business. Companies that chose to embrace consumer demand for trust in the marketplace will have a clear competitive advantage over those that don’t. Knowing that importance of possessing customer’s trust, Adidas have been doing their utmost to satisfy their existing loyal customers while not forgetting to approach to new potential customers segments.
The basic principles of the loyal customer marketing of Adidas
Dialogue marketing
Adidas make available their products to the customers. In fact, recently people may see Adidas store or Adidas’s products more often than in the past few years. The Adidas official store chain is now globally and there are other hundreds retailers together.
Furthermore, because the satisfied customers are not always loyal and possibly lured by other competitor’s product, that’s why Adidas endeavour to listen to the customers, catch up with their mood and appreciate their recommendations. The more you can understand your customer, the better you can serve them.
Customer rewards and benefit programs
Besides using the dialogue marketing strategies to enhance and maintain the relationship with the loyal customers, Adidas also have implemented some other benefit programs or special rewards campaigns. Adidas have different kinds of membership cards with 5, 10% discount for any Adidas products. At different business market, Adidas Company has carry out different sales strategies and customer bonds. As Adidas have several advertising deals with famous persons, they also give lucky customer chance to have a short talk with their advertising representatives.
As far as I know, the loyalty marketing Adidas has been using mainly based on relations and sometimes discounts but very limited.
During a whole year, there are some discount-times for the special or ubiquitous occasions like Christmas, Winter break, Spring break, and Summer time. Though the price-off scale is usually around 10 to 20% but with some kinds of product the discount can be up to 40%.
Here is the Adidas gift card for customers to save up their own money when purchasing product at any Adidas store including online shops.
Gift card can be issued for any amount beginning at 15 USD up to 1000 USD.
Besides that, Adidas members and whoever purchases Adidas many times would sometimes receive extraordinary offers, gifts and latest catalogue of Adidas products.
Nowadays, many companies are increasingly using databases to manage customer relationships to boost both sales and customer satisfaction. A well designed, secured and effective database can help the managers identify key trends and important information such as most profitable customers. A customer database plays a significant role in how companies/sellers keep controlling relationships with customers. Customer relationship management (CRM) is a core part of many small business' overall sales and marketing strategies.
In reality, even the smallest or largest companies spend lots of money annually on advertising to increase the amount of business they have and often they don't always target new customers, but the existing ones they have listed in their database. Keeping contact with customers is a good way to get repeat business and promote new products to the right people.
Obviously, the cheapest way to create the customer database is to make your own. However, it is not highly reliable and inapplicable with large companies.
Currently, Adidas is using the Oracle database software which ensures high quality, availability and performance. The software is: Oracle 13-Terabyte Data Warehouse. Here below are some other Oracle products and services Adidas applies to their customer database system.
Oracle Products & Services:
• Oracle Database
• Oracle Data Warehouse
• Oracle Partitioning
• Oracle Data Guard
Challenges
•• Enable global use of the company’s data warehouse system, which is built on SAP Business
Information Warehouse (BW) and Oracle relational database management system
(RDBMS) technology and contains information related to sales, marketing, and finance
•• Accommodate users at all management levels—from operative reporting to business performance management at the brand level
•• Ensure high availability of the data warehouse system for more than 1,500 users around the globe
•• Achieve worldwide integration of diverse source systems based on disparate technologies
•• Scale solution to manage more than 10 terabytes of data in a single database
Solutions
Ensured high availability and high performance of the data warehouse system as well as a standardized reporting view
•• Enabled global access to the data warehouse system for all lines of business in all geographical regions
•• Created an upstream Oracle Database to consolidate more than 30 non-SAP source systems in advance to ensure data quality and streamline data loading processes
•• Significantly reduced down time by implementing a disaster recovery architecture—with no unplanned downtime to date
•• Ensured high availability of the data warehouse system through replication enabled by
Oracle Data Guard
•• Enabled replication using the back-up system at a distance of 40 kilometres
••Used Oracle tools to improve performance by a factor of 100 for specialized queries
••Utilized Oracle
Some detailed information about customer stored in database:
Personal information
Name: arranged in alphabetical order from A-Z
Address; Nationality: USA, UK, VN, SUOMI, etc
Gender: Male/Female
Email address: easily to contact
Age: different segments such as children group: under 10, teenager group: 11-19, young adult group, and adult group.
Phone numbers: easily to contact
Occupation: sports player, coach, business person, student, worker
Satisfaction data: rate of thanks or complaints feedback from the customer
Marketing actions
Regular newsletters: distribute new catalogue or leaflets, press
Campaigns: sponsorship, promotion for new products
Other contacts: via email, online customer store
The main goals of database marketing are to improve customer retention, cross-selling, up-selling and increase the rates of customer acquisition.
Basically, the purchasing information of customer is stored in the customer database of company. The product’s info, product’s purchasing rate, prospects, customer’s info, store’s info are all recorded carefully that would facilitate the process of analyzing the business market for the company.
Based on the figures stored in the database, the company have a general view of the tendency of buying company’s product. For instance, the company will see which product now is most preferable, which product’s amount is downward and since then company will set up some strategies to alter the product’s design, quality and boost the sales and raise the rates of customer acquisition.
For example, these days Tiger Woods, David Beckham or other famous sports players are some ubiquitous names heard many times through media thus customers would have paid their attention much more on them and when they enter the store they would be curious or interested with these sneakers, shirts, caps relevant to those famous players.
Another point is to increase the cross-sell, up-sell: In this matter, when a customer want to buy a basketball sneaker, he/she would also keeps eyes on the basketball headband, basketball kits and a ball so we can arrange these related items together and easy for the customer to buy.
Furthermore, the company notice the sneaker A is bought at high rate so they will design more sneaker A models like A+, A++, etc.
In fact, if the company wants to satisfy customer effectively they would exploit the customer database and make the long-run orientations.
By exploiting the customer’s information and market figures, the company would obtain an obvious overview of the market and catch up with the competitor’s activity then set the product’s price sensitively, develop the product’s quality, renew product’s models and enhance the customer’s care (customer service).
In addition, the company can send a gift or present to their loyal customer on special occasions like birthday, wedding, etc or implement different kinds of giveaways, customer’s benefits. Besides that, the company would set up strategies in effort of developing the customer bonds and maintaining customer relationship.
Principles of Customer Relationship Marketing of Adidas
Adidas has a good relationship with their customers, they have some kinds of insurance for their products, customers can have their shoes, sneakers or other stuff fixed in couple of months. They also have good customers' service. I have bought some Adidas sneakers at Sello or Stockman and they have kept some information about me, they try to understand my needs, receive my feedbacks. Through getting good relationships with customers, Adidas have been successively renew their designs, get models up to date to meet customers' demand and also compete with other competitors. Adidas has sponsorship deals with many of the world's top athletes, clubs, and sporting events.
Key principles of customer relationship marketing of Adidas:
Continuously learn about the existing customers: When we know our customers carefully, we can make sound business decisions. Adidas try to collect and analyze information about the customers, and maintain that knowledge as they create customer profiles for the business. They also apply everything they know to building a customer valuation model. Knowing the value of each customer is essential for managing the relationship wisely
Anticipate customer needs: Knowledge of the current customers presents new opportunities for making the right offer to the right person at the right time. Adidas has made many analysis of their customer profiles, especially using powerful analytics tools to provide insight about who buys what from them when. Contact management systems can detect cross-selling and up-selling opportunities.
Good interaction with customers: Creating desirable relationships is not a one-way street; strong relationships result from interaction. The customers appreciate being recognized, listened to, and understood. Adidas has let their customers know that they care about them in every communication.
Effective marketing communication: One of the ways to create value for our customers is to simplify how they deal with our organization. Building the mass communication channels has brought more customers to Adidas stores.
Retain the right customers: Have you ever fired a customer? One of the truisms associated with CRM is that it is cheaper to keep a customer than to find a new one, but this idea can be taken a step further. Adidas has put more efforts in retaining their loyal customers and widen their attention to other potential customers.
Company segments: Men: Shoes, clothing and sport accessories Women: Shoes, clothing and sport accessories Children: Shoes, clothing and sport accessories
Customer relationship creation: Let’s take men segment as an example to analyze about the procedure to create and maintain customer relationships.
Adidas has men sneakers for all ages from a little boy to an adult with various nice models, designs. The target men customer group that Adidas has been focusing on are athletes and boy teenagers. These two groups have the strong desire for buying Adidas sneakers or other sports accessories and clothing.
Recently, there are over 100 different sneakers designed for soccer player to select and around 120 models for basketball, tennis, running, volleyball. Not only does Adidas manufacture the sneakers for sports athletes, Adidas also sells outdoor shoes models and flip flops for customers. For the outdoor sneakers product line, customers have a chance to select their wish-one within over hundreds of different shoes models and collections such as: Nizza, Superstar, Samba, Stan Smith, Forum, Vespa, etc. Knowing that the teenagers usually consider the self-esteem rather than price, Adidas has been trying to extend the shoes models and apply some more new designs. However, while the economic crisis still hasn’t shown any bright perspective, customers are very thorough in buying any product.
Based on which potential customer’s group is targeted and careful market researches, Adidas set up the balanced price scale so that their products seem to be most affordable compared with other giant sports brands name like Nike or Puma. Along with the appropriate perception of the competition market, Adidas has made some consumer promotions such as premiums, price-off or bonus packs.
Nowadays, no matter wherever you are and any shopping mall you come to, the Adidas products exist in front of your eyes. The Adidas Company has been trying to extend their delivery networks and retailers across all their business markets. The vital brand development and triumphant success of Adidas in efforts of bringing their products closely and easily to customers is now obviously seen which is evidenced by the fact that there are over 400 Adidas officially stores worldwide and hundreds of both big and small retailers.
Besides that, every year Adidas spend a huge amount of money like millions US dollars on marketing communications and customer services. Due to the harsh competition with Nike and Puma, Adidas has been trying to dominate their competitors’ image through having made more ads, commercials, ad video clips and sponsorships.
In February this year, Adidas held an Adidas 8th Annual Europe Camp in Italy for young adults basketball players. At the same time but different location, Adidas celebrated the 2010 NBA All-Star Game by introducing the brand’s lightest basketball shoe with the Team Signature Supernatural and outfitting the 2010 All-Stars with a Texas-inspired NBA All-Star uniform as the Official Outfitter of the NBA.
Customer relationships maintenance: During several past years of doing business, Adidas has successfully created one of the best well-known sports brands all over the world and is now the largest sportswear manufacturer in Europe. However, while global economic crisis is still being gloomy, Adidas also has to struggle to sustain their business and trying to find brilliant solutions to boost the business’s sales.
According to Forbes statistics, net income for the whole of 2009 fell 62 percent to euro245 million from euro642 million. Revenue in 2009 fell 6 percent to euro10.4 billion from euro10.8 billion. Nevertheless, Adidas expect the better perspective in their business next following years.
Adidas has currently improved their online and offline customer service in order to satisfy even the strictest customer. The customer’s feedback now is highly considered and the time of preparing or exchanging the product is now shortened significantly. During these years, Adidas is non-stop in extending their successful partnerships with many sports players, sports suppliers, etc.
Not only concentrating on maintaining and enhancing the customer’s relationships but Adidas has also advanced their manufacturing technology and product’s quality. The Adidas Innovation Team (AIT) carries on in the pioneering footsteps of Adi Dassler in an effort to be the most innovative sports brand in the world. AIT consists of a diverse team of experts trained in industrial design, mechanical and electronic engineering, product development and Biomechanics. Using the latest research, material advances and athletic input, AIT spends months and even years developing, testing and refining footwear, apparel and hardware technologies until they are perfectly suited for their intended purpose.
Competitive position: During many years, the two largest and well-known sportswear manufacturers worldwide Nike and Adidas have competed to each other intensively to achieve the No.1 brand. Until now, though Adidas is dominant within Europe and has no rival, Nike still remains the No. 1 in the world. However, since Herbert Hainer became a Chairman of Adidas Inc, a change seems only a matter of time.
Not only is the name Adidas well-known but Adidas logo with 3 parallel bars simply has also become the symbol of a famous sports brand with the highest standard. The Adidas products are now sold in over 160 countries across the world.
Competitive structure of Adidas is obviously perceived as monopolistic competition. Adidas’s ambition is to become the world largest sport shoes and accessories manufacture all over the world. In order to achieve its business strategic goal, Adidas has found the way to defeat their biggest competitor: Nike.
Suspects:Adidas designs and offers to the customer over 600 different models of sport shoes and about 1,500 samples of clothing, uniforms, athletics sports. All products of Adidas are well-known globally.
Prospects: Among the broad variety of Adidas products, sport shoes is still the first priority. Adidas puts their main capture on the athletes, sport players and teenagers.
First-time customers:Adidas have been building the good image and done well branding activities. Their brand name is now well-known over the world from Asia to Europe, America...Not only do they focus on shoes, but they also produce other sport accessories. They use some famous sports players’ image to advertise for their product and widening their brand name. Whenever thinking about the place to buy sneakers, sport shoes or other sport accessories, Adidas store is the first option emerging in the customer’s mind.
Repeat customers:Customers trust the quality and durability of any Adidas shoes or other accessories. In fact, Adidas is an active company and be sensitive with the market. Not only whole-heartedly do they listen to the customer’s feedback and complaints, the Adidas managers also improve the product’s quality non-stop. The Adidas company customer service has an email customerservice@shopadidas.comandthe phone line as well for customers who want to give feedback, question.
Clients: Company has many discount period of time during a year for customers and especially for loyal, member customers. Furthermore, in order to develop the nice relationship with the customers, there is a program allows customers to co-design a custom athletic shoe according to fit (size and width), performance criteria (insole, cushioning, outsole characteristics), and style (color combinations, custom embroidery).
Members: There is a Membership program offering some exclusive benefits for those who join. As the top of the sport equipment producer, Adidas is obviously the best choice of many sports players and most of them are members of Adidas Membership. They get gifts, discounts a lot, and chances to join some company’s parties.
Advocates: Loyal customers or repeated customers are the ones enthusiastically recommend the company’s product to other people.
Adidas designs and offers to the customer over 600 different models of sport shoes and about 1,500 samples of clothing, uniforms, athletics sports. In fact, sports shoes are still the first priority.
Adidas divides their products into two main segmentations: Men and Women.
In each segmentation there is 3 small segments of product: shoes (footwear), clothing and accessories.
Both men and women shoes are classified by the aim of usage of the consumer such as: basketball shoes, soccer shoes, running shoes, cycling shoes, tennis shoes, fashion shoes, etc.
Furthermore, Adidas also has jackets and vests, shirts, shorts, shocks, glasses, watch included in the clothing and accessories product segments.
Besides that, Adidas also offer many specific products to children like warm clothing, shoes, hand gloves, shocks.
Adidas applies the Differentiated Strategy Differentiated Strategy is a strategy which a business directs its marketing efforts towards two or more market segments by developing marketing mix for each.
The primary customers of Adidas are athletes and young teens, adults. However, they also offer products for children, old adults, and coaches. Their products offered to customers are broad and sufficient for all kinds of customers.
Customer Segmentation Variables Consumer Markets: Global; Asia, Europe, America, Australia, African
Demographics:
Age group: Young adults, children
Gender: Male, Female
Occupation: Athletes, coaches, students, and workers, etc
Social class: Working class to High class
Segmenting by Purchase Behaviors
Frequency:
Athletes or sports player are like loyal customer as their buying frequency is very high.
Students or normal customers just come to the Adidas store when they are in need of some sports shoes or equipments so that their buying frequency is low.
With the adults, their buying frequency is relatively very low since they do not highly need these kinds of stuff.
Monetary:
With the loyal customer, they rarely hesitate to possess any new product from the producer. Fashion, self-esteem is more considered than money. There are many sports players and famous persons being as Adidas brand’s representatives.
However, the normal customer who has a restricted money budget would be very thorough whenever buying any needed product so that they would not spend so much money on shopping.
Purchases:
As a first product priority, Adidas sports sneakers are consumed most compared with other lines of product. One another Adidas product segment which customers usually put their eyes on is clothing; Adidas T-shirt, jackets, shorts, shocks, and hats.
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