Loyalty Doesn't Result In Sales
|Tags:||Strategy, loyalty, sales, Nokia, management|
Nokia, HMV & Game are brand names that were once the giants of retail, offering the best of the best and not looking back.
When a company is at this level of consumer awareness it’s important to keep up with everyone else, the fast pace world technology moves fast and doesn’t stick around. Sticking to a sales strategy that worked 5 years ago is very poor judgment which will no doubt hurt growth and revenue.
Nokia has been in the news today saying that along with a major reshuffle of board members they will also be letting 10,000 more employees go, that’s on top of the already confirmed 10,000.
With the problem getting worse for the mobile phone marker it has resulted in dropping previously confirmed acquisitions and shifting strategy ideas to other areas.
Some strategies have not worked out and they are now selling the luxury arm of the business Vertu for a reported $200million. They have even tried to sell a smart phone for a cut down price working alongside Microsoft.
HMV went into a serious stage of trouble even flirting with administration, however is has been overturned by the banks and allowed for new lending terms. But consider the sales process they had in place, it involved selling a physical media item that is completely undercut with online sales and even illegal downloading.
The likes of Netflix and Love Film should have given HMV the idea to expand and use the already vast number of products for major online streaming, it’s better to be late then to never arrive!
Game is again another company that has gone into administration with too much emphasis on loyalty and brand name. This is more down to the service then sales strategy but nonetheless it shows that companies who like to focus on loyalty as the main reason for returning customers will get hurt over time.
With 277 stores having to be shut and further cuts made it should really highlight that loyalty only works for small shops in a high street, large corporate companies need to focus on a solid sales process that delivers the revenue to keep growth stable.
The good thing is that you can personally learn from these giant companies’ mistakes, it allows you to also realize that in reality loyalty means nothing for expansion.
Customers like deals and they will flock to the company next door if they are offered something more in return for their investment of time and money. It’s vital you and your company don’t go stale and stick with what worked 3 years ago, stay with the growing trends and use your resources.
Adapting your selling technique will benefit you a lot more as customers will appreciate the effort and more importantly the loyalty to the brand name will then stick around.
Update - 29/11/2012: Nokia has launched the Lumia 920 model which is proving to be a very popular item - pre-orders were sold out and now Amazon is reporting that they are fast selling out of the 'Hot Item'.
Effective and aggressive marketing has helped to pivot the mind set of the fans and haters showing a great example of brilliant marketing startegy.
By: John Perrin