Customer Satisfaction is Key to DM Growth in Austria

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VIENNA - Direct marketing has a long way to go in Austria to catch upwith the US even though the industry is growing at a healthy 5 percentper year with an annual turnover of more than 20 billion Schillings((about $1.8 billion).

One problem we have here in Austria is persuading companies that customer satisfaction is the key to successful marketing. After 50 years of relentless mass marketing consumers today want to know what's in it for them.

Companies who don't respond face the business equivalent of the storming of the Bastille. It's a point marketing guru Philip Kotler made in a lecture he gave to a marketing congress here not long ago. Unfortunately, many Austrian companies have not yet risen to thatchallenge.

A major Austrian insurance company, to cite one example,recently postponed a customer satisfaction survey for a whole yearbecause it first wanted to upgrade its electronic data system.

Do such companies really believe that customers care about the stateof their electronic development or about other organizational problemsthat need to be resolved?

Those who do are likely to find that customer satisfaction surveys aremoot because customers will have taken their business elsewhere - mostlikely to a rival company interested in their needs and desires andready to meet them through enhanced value - cards, clubs, rewards andother aspects of customer loyalty programs.

Personalization and enhanced value are important in Austria andthroughout Middle Europe because average customers are less and lessinterested in run of-the-mill print campaigns or conventional TVspots, a point the German Allensbach Institute's extensive marketresearch makes clear.

The study found that 70-80 percent of all commercial TV viewers start channel surfing as soon as the ads come or take advantage of the break to get on with something else. By way of contrast, most customers are interested in dialog, benefit, service and notice.

Our own experience on the Austrian market is no different. DM works here as it does everywhere else. Mailings from the Nivea Club or the Hertie Card are read by 96 percent of the recipients.

When the nice lady from the TUI Travel Club phones - from a call center, of course - to tell you about an attractive last minute travel offer, most are delighted to talk to her and feel comfortable doing so.

Global players have long known that mass communications can no longerreach today's customers. Instead they focus their efforts onstrengthening the loyalty of preferred and steady customers. HeinzWiezorek, President of Coca-Cola Germany, told last year's DIMAconference in Wiesbaden that Coke plans to spend $1.3 billion onrelationship marketing in 1998.

"Client care is just as important for traditional advertising agencies as it is for the DM business," Wiezork said. They will have to spend heavily on new technology and on specially trained employees in order to succeed in the ad agency world of the 21st century, he added.

Traditional mass market agencies that dominate advertising today and absorb 80 percent of all advertising spending will not exist in their current form in another five years because of the demands customer care is making, Wiezorek explained.

He is not alone. Niall Fitzgerald, Chairman of Unilever, recently told a meeting in Brussels that Unilever plans to give up its traditional agency relationships because they are no longer able to serve changing Unilever demands.

Walther M. Hosse is the owner of Hosse & Partner, the leading Austrian agency specializing in relationship marketing.
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