Peter Barton talks the start of customer loyalty and the absence of market data with DHL's UAE marketing manager
For ambitious marketers new to the Gulf region there are three traditional career trajectories. The first is to accept the status quo, lower your expectations and plod along without making too much fuss. The second is to bombard your colleagues with a raft of new ideas, fail to get them on board, hit the wall and slink away demoralised.
The third, and increasingly most popular, is to blend international best practice with local sensitivities while keeping a close eye on the bottom line. Eighteen months into his role as UAE marketing manager, it is in this category DHL's Scott Dunn falls.
Admittedly Dunn's arrival comes at a fortuitous time for the group's marketers and a pivotal moment for the business. Last year's acquisition by Deutsche Post, and the 'merging' with freight specialist Danzas, has meant fresh impetus for the group. In addition, the DHL yellow-and-red rebranding has delivered promotional funds to the coffers. That said, while there is opportunity there is also greater attention on producing results. Dunn's trick has been to bring sense and direction to all this activity while keeping track of spending.
There have been three main strands to Dunn's impact over the past year and a half: the creation of a rolling series of performance checks, the commissioning of a major piece of market share research by AT Kearney, and the launch of an all-new customer loyalty programme, Altitudes. To this he has added a more measured approach to the traditional above- and below-the-line marcomms tools.
"One of my goals here has been to justify the marketing role in an operations-based company," says Dunn. "Everything I do is measured on a monthly basis and, where possible, given a return on investment. Okay, some things are virtually impossible to show ROI, but there is always a measurable in everything we do."
Dunn describes the DHL business in simple terms: "We send and receive documents, we send and receive parcels and we ship freight."
In terms of turnover, documents account for 26.2% of business, outbound packages 35%, inbound packages 23.3%, and intra-GCC trucking 12.1%.
For the year to date he says all categories have grown "between 18% and 32% apart from heavyweight freight which has grown by 387% in terms of number of shipments". The final figure somewhat skews the overall performance but reflects the potential scope of the Danzas deal. Leaving freight aside, Dunn says the Middle East business has grown "22-25% year on year for the last three years".
Lessons from Sony
"My previous history has been very market research focused," says Dunn, formerly a senior product manager at Sony UK. "Everything was about market share, monitoring on a weekly basis, pricing analysis, competitor data. From what I can see it's been more difficult to access that kind of data here.
"I've been uncertain as to how accurate some of the results have been based on the quality of research done. It was inexpensive, the methodology poor."
One of Dunn's missions is to increase DHL's awareness of the size, shape and characteristics of the regional market. The Australian consultancy AT Kearney has been commissioned to carry out a regional market-sizing project, having conducted a similar survey in Asia Pacific. The deal was inked in September, began in October and will produce results by February.
"The whole sector is a little in the dark, and I'm not frightened to say it. When I see competitors talking market share they're quoting figures I don't feel comfortable with.
To understand how big our share is we need to know the size of the market."
To this comprehensive study has been wedded a rolling series of ad hoc research projects, ranging from mystery shoppers to internal courier research programmes. Dunn says the difference here is that projects are ongoing and country specific. DHL's regional structure allows for marketing managers in the UAE and Saudi Arabia with a regional marketing director based in Bahrain. The UAE is the region's lead territory.
Dunn says that while marketing spend is in line with previous years - "The spend as a percentage of revenue is the same as last year. As revenue increased so has marketing budget. We've just been smarter with spend." - fresh money has come in to back the rebranding. "Also, the whole marketing team has been rehashed across the region. And they're all guys with marketing backgrounds, pushing hard for an operations company to get behind marketing."
If there is one thing Dunn has gotten behind in his time here, and it will be one thing he flags up on his CV and lets his bosses in Bonn know about, it is the roll-out of the Altitudes customer loyalty programme. Launched in April 2003 following extensive work with ICLP, the scheme currently has 2,700 members (with 100+ joining each month) and, claims Dunn, has delivered across key performance indicators.
While increasing customer loyalty, increasing revenue and upping profits was clearly to the fore, the task, says Dunn, was to develop a "more effective means of communicating with our customers".
"DHL and our competitors are companies that never win," he points out. "No one ever slaps us on the back for sending a shipment within a day from point A to point B. We're an industry that only loses. If it's late, or gets lost or broken, we're the villains. It's not a sexy product but it's an essential service product. It's not always easy to have our customer's attention."
He says the scheme makes sense because the majority of DHL account customers ship every day. Rewards are split across discounts on future DHL business or off shopping and entertainment throughout the UAE (Wild Wadi, Damas, Abu Dhabi Mall and Arabian Adventures are among the partners). While Dunn says the "majority of companies we're dealing with in the Middle East don't want their employees to benefit directly from this", it is hard to imagine individuals passing up $100 shopping vouchers in favour of company benefits. Dunn might not mind as long as he has their attention.
"The most important thing for me is for this to work as a communication tool," he states. "One of the best measurables is being able to switch promotions on or off. For instance, we currently have a programme where customers shipping to North America get extra bonus points. It's just a postcard, pretty simple, but the response is massive. We've had hundreds of calls into the call centres, 80,000 hits per month on our website - and that's coming from 2,000 customers."
While Altitudes is clearly delivering extra customer information, Dunn says that was never the point. "We can crunch the figures but we knew who the customers were before they joined Altitude. That doesn't give us any other information. What gives us information is when they provide feedback to specific questionnaires."
He says the most recent mailer generated an 18% response with no incentive to fill it in and return. In comparison, previous, random mailers had delvered 4-5% response rates.
"The questionnaire followed a promotion we'd just done on heavy weight shipments. We had a lot of sales guys out there talking about it. The only way I can explain it is that, as an Altitude customer, they felt closer to the brand and that they knew we valued their input."
To date Altitude is a UAE initiative but it will be rolled out to Qatar and Oman shortly. ICLP is in discussions with the rest of region as to how to fit the scheme to local requirements.
Now for intangibles
Measurement, accountability, effectiveness: if there are buzzwords to Dunn's schemes these would be three of them. So is he turned off by anything that can't deliver specific results?
"No. At the moment it's very important to show that my team is paying for itself. Is Sheikh Zayed Road the best place to have a unipole sign? We need to be sure.
"We've had extra money from the rebranding to communicate the extra services. We have 21 signs in Jebel Ali Free Zone to communicate the intra-GCC trucking service - 'keyboards to Kuwait', 'dates to Doha', etc. Now, if we do this campaign for two months are we suddenly going to see a massive upturn in truck business? Probably not, but it will put us top of mind. It's important for us to be out there. We do more above-the-line than our competitors in the UAE, and that's why our business is bigger."
The business also puts what Dunn describes as "a fair amount of money", behind sponsorship of certain events, from Formula 1 to Dubai Rugby 7s. "Every brand has a personality and DHL - and its staff - don't want to be seen as boring, stiff or business-like," he says.
Equally, there is a strong Corporate Social Responsibility strand: Gulf For Good, Dubai Centre of Special Needs and the Disaster Resource Network all benefit from DHL time and money. "But we need to make sure we have the right balance of PR," says Dunn. "We could go on and on about the nice things we do and what good corporate citizens we are, but that's not necessarily all we want to be talking about. We are a business and we have business news - the investments we're making, the expansion plans, and the range of the air network."
All of which seems to tick the right marketing boxes. So, having bolstered the CV, gained overseas experience in a growing market and caught the ye of the Bonn HQ, is it time to start looking for new challenges? The question is an obvious one.
Dunn is more open than one might expect. "I love marketing. Sony is a sexy brand, whereas maybe DHL is not so sexy. If I'm with DHL in the future then great but I would like to extend my responsibilities beyond marketing. I've been involved with the senior management team here and I'd like to be involved in more parts of the business.
"As far as other countries are concerned, I'd like to stay in the Gulf. I just wouldn't consider living anywhere not near the sea."
© Gulf Marketing Review 2004
