Gaining a foothold in the Latin American market, agency start-up Loyalty Rules Inc. has formed an alliance with Fabrica Comunicacao Dirigida, the sixth-largest direct marketing shop in Brazil.
The deal calls for an exclusive affiliate relationship between Loyalty Rules and Fabrica, particularly in the transfer of loyalty and customer relationship marketing expertise from the U.S. shop to its Brazilian counterpart.
“I think their direct marketing is probably where direct marketing in the United States was about 10 years ago,” said Dennis L. Duffy, president and managing partner of Loyalty Rules, Asheville, NC. “The opportunity is to take insights that we've learned as direct marketers and help companies in countries like Brazil get a jump-start in the learning process.”
The alliance requires Loyalty Rules to offer training and strategic consulting, meet with Fabrica's clients when necessary and provide access to proprietary case studies on loyalty programs.
Fabrica compensates Loyalty Rules for its services.
Based in Sao Paulo, Fabrica ranks after Rapp Collins, Wunderman, Datamidia, Zest and Sunset. The agency has clients like Hewlett-Packard Co., Itau Bank and Itau Insurance, which are No. 2 and No. 3, respectively, in the banking and insurance businesses in Brazil.
Brazil is increasingly visible on the radar of U.S. direct marketers. Last month, the Direct Marketing Association, New York, agreed to manage the Instituto Brasileiro de Database Marketing. Focused on education and not membership marketing or government affairs, the institute comprises database engineers, data processors, statisticians, customer relationship management professionals and a growing base of direct marketing executives.
This deal gives the DMA a toehold in the second-largest country in the Americas — 180 million people who last year bought $1.56 billion in goods and services through direct marketing. According to the DMA, Brazilian businesses last year spent an estimated $810 million on direct marketing to promote products or services. That spending seems to be on the upswing.
“The degree of interest in direct marketing [in Brazil] is absolutely extraordinary,” Charles Prescott, vice president of international business development and government affairs at the DMA, told this publication last month. “It has a growing and healthy industry, and it has a great future because it is not as widely understood as it is in the United States.”
It is this potential that attracted Loyalty Rules to partner with Fabrica, Duffy said.
“I've found that there's a great demand in other markets for loyalty marketing and CRM, and it made sense for me that one of the best ways to fill that need was by developing structured alliances in local markets,” he said. “The Dominican Republic is another growing market.”