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"Building Brand Value and Customer Loyalty" Highlights
Posted May 29, 2012, 2:51 pm by Jorge
Last week, ANX hosted a special Executive Insight Panel entitled: Building Brand Value and Customer Loyalty. The guest executive panel consisted of:
Randy Murphy - President and CEO of MamaFu’s Franchise Group & Founder of Murphy Adams Restaurant Group
Jeffrey S. Klein - Senior Partner & Franchise Board President of Capriotti’s Sandwich Shop
J. Joseph Finizio - President & CEO of the Retail Solutions Providers Association (RSPA)
They all shared some incredible insight about the importance of brand value, building and maintaining customer loyalty, and protecting sensitive data. You can watch the full webinar by visiting our webinar page.
Our discussion focused on three important topics that every business owner faces today: the importance of brand value; building and maintaining customer loyalty; and data protection. The panelists shared their insight from real-world experience in these critical business areas.
Brand value, especially in the franchise community, is something that is critical in terms of business growth. “[It] is the thing we hold most dear," stated Randy Murphy in regard to his MamaFu’s brand. When seeking to expand your brand’s footprint, making sure you have favorable perception by the community that will ultimately decide the future of your business is “the top thing." Brand value is something that proliferates throughout the rest of the business and maintaining your brand’s value requires efforts on all fronts. Both other panelists agreed that many of a company’s efforts are focused on increasing the value of their brand.
One of the larger contributors to favorable brand value is customer loyalty, which was our second topic of discussion. “We see [customer loyalty] as one of the most important things going forward," stated Murphy. This is especially true in the heavily saturated Quick Service Restaurant market that is rife with competitors. Jeff Klein agrees that “today there is so much competition that you need to get that extra little idea into a customer’s head so…they wake up in the morning [thinking about you]." The inherent benefits from a loyalty program do have a caveat, however. Having a successful customer loyalty program requires the collection and analysis of certain pieces of data that “could put you at risk with your customer base if you are hacked," advises J. Joseph Finizio.
“Because they’re doing loyalty and rewards programs, it’s not just transactional data that you need to worry about. You’ve got a lot of personal information [that you’re now storing], especially if they’re tied into social media, that...could get hacked." –J. Joseph Finizio
These topics lead directly into our discussion of maintaining network and data security. This topic was agreed to be one of the most important since it ties the other two together. In fact, when asked what the top threats facing the franchise community today were, Murphy replied hastily that “number-one is really data and network security, just from the fallout of [what] can happen." All panelists had great knowledge about this topic and how it relates to their business but Mr. Finizio really brought some incredible insight to the discussion as his engagement with the RSPA exposes him to this daily.
Mr. Finizio immediately pointed out that according to Visa’s latest statistics, “75% of the breaches last year came from restaurateurs; that is small, independent restaurateurs and franchisees." He stated that the reasoning behind this targeting skew is multi-faceted. One of the primary reasons being a simple misunderstanding of the process of achieving and maintaining PCI compliance. “The problem is that maintaining compliance, and the related day-to-day activities is confusing [for merchants]," stated Finizio. “99.9% of merchants are not trying to be negligent or ignorant of what we have to do. The truth is that a lot of us merchants simply don’t know what we need to do," chimed in Murphy.
Another reason contributing to this statistic is the unawareness of restaurant owners and franchisees of where the liability falls in the event of a data breach. “The liability is all on the merchant’s back. When you sign that agreement with your processor, you’re signing that you are responsible for the security of that data” Finizio pointed out. Mr. Klein also noted that merchants needed to “read [their] merchant agreement[s] The print is very small for a reason, because once a breach happens; you are liable for everything…and then some.”
The underlying theme brought itself to light in the wake of this discussion about merchant PCI compliance. Misinformation and lack of knowledge about the complexities and intricacies of maintaining PCI compliance is the main culprit that is allowing hackers and data thieves to penetrate this particular market on such a grand scale.
Data security is truly the “glue” that binds together customer loyalty and brand value on a company-wide level. As Mr. Murphy explained, “No matter how much time and energy you spend on an upfront marketing program to build loyalty; I don’t know if there is anything more detrimental, [like] pulling the plug on the whole thing, than to let all your loyal customers know that someone halfway across the world took all their data."
The below video displays a real-life example of what can happen when your business is victimized from a data breach. It is from Mr. Finizio’s website www.gorspa.org/pci. As he explains, “these folks were breached back in 2006; they had two very successful restaurants. It cost them in total $110,000 and ultimately now they’re out of business."