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Brand management in action: L’Oreal

28th Mar 2007
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With 18 global brands - including Ralph Lauren, Lancôme, and Garnier - L’Oréal is the world’s leading cosmetics, skin care, and luxury products producer.

When the firm wanted to broaden the scope of marketing for its luxury products division, it began by rolling out a company-wide Siebel CRM system in a bid to boost customer loyalty and reduce churn.

As a result of more accurate targeting, the volume of direct mail was cut by around 57 percent for a single promotion, with a 62 percent response rate. L’Oréal also gained a consistent view of customers across all routes to market.

“We wanted a consistent, integrated view of our customers across various marketing channels, including the internet, point of sale and customer call centres,” notes Daniela Giacchetti, head customer strategy officer at L’Oréal. “We were only too aware that, as competition increases, business growth can be stunted by customer churn. We wanted a CRM capability that would provide us with more opportunities for building customer relationships.”

To cross sell effectively, L’Oréal needed to create a single in-house database with all its customer data, which previously had been hosted by several different agencies.

In December 2005, following the success of the pilot in South Korea, L’Oréal extended the solution to support the mass-market domain in France and then began a global rollout due to take three to five years. “Change management in CRM takes time, especially when 99 percent of promotions are targeted on the product rather than the customer,” says Giacchetti.

Brand loyalty has been one of the most significant benefits of the CRM roll-out. “We can now classify ‘value customers’ more easily and aggressively retain them,” adds Giachetti. “There is less risk of customers switching to other brands because of their disappointment at ‘random treatment’.”

For another look at brand management in action click here.

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