Friday, September 09, 2011

The Magic Of Nespresso:Loyalty Does Not Come With Cards

Nespresso is also known as one of the master of customer relationship management. The close attention it paid to customer experience is driving ultimately to customer loyalty.

Of course, some customer relationship management techniques have been used by Nespresso in order to generate customers loyalty:
  • The high exit barriers: Once you bought a Nespresso machine, you can not use any other kind of capsules with it but Nespresso's. If you paid for about 200 € your machine, you may think twice before willing to change your machines. Also, in a traditional household you may have one coffee machine. Once its a Nespresso, it is less likely you will use others.
  • You have a lot of channels to get in contact with the brand: The stores, the phone, the Internet. It creates bonds with customers which can get in contact easilly with Nespresso.
  • Nespresso uses customers metrics in order to create direct marketing campaigns. They also pay a close attention to conversion rate, in order to reach better customers.
But what is very interesting is that they have focused on an emotional kind of loyalty instead of a traditional transaction based one. Most of customer loyalty reward programs are based on a "card", which materializes the relationship between one company and its customers. These cards offer rewards, either discounts, free products, or extra services.

As a luxury brand, Nespresso prohibits himself to give any kind of discounts on its capsules. Therefore, none of the direct marketing campaign edited by Nespresso can rely on an attractive discount in order to generate higher volumes of orders.

Rather than that, the metrics are only used for quality purpose. And guess what, that works!