Business Boost: Nearly 35 percent of each loyalty program membership redeemed loyalty service rewards. And 100 percent of clients said they would recommend the services to friends and they would redeem their points for the same services again.
Innovation sometimes happens where you least expect it. Most people equate innovation with new tools and apps at high-tech companies or start-ups. Traditional companies in traditional industries are not typically thought of as innovators. No one told that to Syngenta Brasil, an agribusiness firm that provides farmers with seeds and crop protection. The company innovated around its customer experience and loyalty programs to reposition itself as a trusted advisor to customers.
The agriculture industry was traditionally dominated by products and price. Competition in the Brazilian marketplace consisted mostly of generic product companies competing on price and big market players competing on products. Syngenta saw an opportunity to move away from the price wars and product commoditization to differentiate itself with customer centricity and aggregate services directly linked to its customers' business to the company's product line.
The company segmented its clients into groups according to potential use of products, customer profile, and access channel. It identified about 35 percent of customers as having the most potential future value. These clients could be treated in a customized way if Syngenta could create viable and suitable programs to reach them. Those customers were divided further into two groups-one-to-one (OTO) and Focaliza? (Focused).
"It is fundamental for us, without a doubt, to properly segment customers and to customize services according to the specific needs of each customer group," says Aguinaldo Pavan, the director in charge of the program. "When the actions are customized according to the profile and needs of each customer segment, certainly we are more effective in the relationship and create more value to everyone involved."
The OTO segment is made up of approximately 600 large growers with high purchase potential. Syngenta reaches these clients through its own sales force. Another 6,000 clients are classified as Focused, chosen because they were the highest potential growers from each of Syngenta's top distributors. They are reached primarily through distributors.
The new look of loyalty
There are many ways Syngenta interacts with these important customer groups-throughtopical discussion forums, local networking events, product and farming seminars, etc. But the company was awarded the Gold Integrated Marketing award due in large part to how it re-imagined its loyalty program.
Syngenta created loyalty programs to reach each customer group-Aliado OTO (OTO Ally) and Programa Mais Valor (More Value). The company partnered with Peppers & Rogers Group Brazil to align people, processes, and systems across marketing, sales, products, financial, legal, IT, and other Syngenta business units to develop the program. Syngenta also employed tools from Microsoft Dynamics, SAP, Salesforce.com, and IBM.
Clients accrue points when they purchase products, which can be redeemed for rewards. But these rewards are not the typical branded apparel, sporting event tickets, or future purchase discounts found in most point programs. Syngenta'a loyalty rewards catapult beyond the typical vendor relationship to offer real value-added services for customers.
"Our biggest surprise was the possibility to identify, through a closer relationship, that customers sometimes have needs which are completely out of our core business activities, but that are fundamental to our customers' business," Pavan says. "So, we needed to find a way to serve them."
Syngenta's loyalty program rewards include:
- Educational/training programs
- Technical consulting assistance
- Management and governance programs
- Technical, networking and educational trips
- Specialized technical services
For OTO Ally members, Syngenta created face-to-face interaction forums to capture and better understand the needs, business trends, and even personal wishes of business owners, pertaining to their role as entrepreneurs and family business owners. OTO clients are large growers on their way to becoming more professional companies. They need specific guidance and assistance as they expand.
In the More Value program, services are chosen based on their wider geographical availability, since Focused customers are scattered in a larger number of different regions. For instance, local professors and other experts choose information sessions and networking events. These services can be obtained for fewer points because these clients have a lower purchase potential.
"All services are tightly linked to Syngenta's client business needs," Pavan says. "From the start, service offerings were designed with business value in mind, never considering personal gifts or prizes with personal appeal."
Education is a key facet of both programs, but they are approached differently, depending on the customer group. Focused clients receive access to courses in financial management, business management, and technical advancement. OTO clients, meanwhile, can choose courses in family business succession, MBA-level management, and their family members can take classes too.
"We created the 'Academia de L?res' (Leaders Academy), a post-graduate management course for our customers' sons and daughters, to make farmers' succession plans easier for everyone involved," Pavan says. "Unarguably, this has been one of the programs that was most recognized by our customers."
Syngenta's tracks the program's success by measuring individual share-of-customer-the total amount sold to the client, divided by the client's financial potential. An increase in share-of-customer is at the same time a loyalty indicator (repeat and increasing purchases), a satisfaction indicator (the client 'votes' with real purchases). and a financial indicator (sales performed by the distributor and by Syngenta), Pavan explains.
In 2013, 33 percent of OTO loyalty members redeemed $US1.8 million worth of services. And 100 percent of clients said they would recommend the services to friends and they would redeem their points for the same services again. Similarly, 30 percent of Focused members redeemed services.
Syngenta aims to reach a 35 percent share of customer for its Focused member base. It is well on its way, already having reached 28 percent. For OTO customers, the goal is to reach 36 percent share of customer. It has nearly reached goal, with 34 percent.
"I am sure that we are in the right path, but we still have much to develop," Pavan says. "Improving the communication process and enhancing various actions so they bring more value to customers of different segments are the next steps."
Pavan's advice to others is to take customer centricity out of sales and marketing and into the entire company. "A perfect internal alignment is fundamental, even before starting the development of the relationship programs," Pavan says. "Another recommendation is making sure that you can deliver what you have promised to the customers."