Jerry Singleton founded Montana Mountain Biking (MMB) 18 years ago. MMB offers o

Question

Jerry Singleton founded Montana Mountain Biking (MMB) 18 years ago. MMB offers oneweek
guided mountain biking expeditions based in four Montana locations. Most of MMB’s
new customers hear about the company and its tours from existing customers. Many of MMB’s
customers come back every year for a mountain biking expedition; about 80 percent of the riders
on any given expedition are repeat customers.
Jerry is happy with this high repeat percentage, but he is worried that MMB is missing a
large potential market. He has been reluctant to spend a lot of money on advertising. About
10 years ago, he spent $80,000 on a print advertising campaign that included ads in several
outdoor interest and sports magazines, but the ads did not generate enough additional
customers to cover the cost of the advertising. Five years ago, a marketing consultant advised
Jerry that the ads had not been placed well. The magazines did not reach the serious mountain
bike enthusiast, which is MMB’s true target market. After all, a casual mountain bike rider would
probably not be drawn to a week-long expedition.
Another concern of Jerry’s is that more than 90 percent of MMB’s customers come from
neighboring states. Jerry has always thought that MMB was not reaching the sizable market
of serious mountain bike enthusiasts in California. He talked to the marketing consultant about
buying an address list and sending out a promotional mailing, but producing and mailing the
letters seemed too expensive. The cost of renting the list was $0.10 per name, but the printing
and mailing were $4 per letter. There were 60,000 addresses on the list, and the consultant told
him to expect a conversion rate of between 1 and 3 percent. At best, the mailing would yield
1800 new customers and MMB’s profit on the one-week expedition was only about $100 per
customer. It looked like the conversion cost would be about $246,000 (60,000 × $4.10) to obtain
a profit of $180,000 (1800 × $100). The consultant explained that it was an investment; because

MMB had such a high customer retention rate, the profit from the new customers in the second
or third years would exceed the one-time cost of the mailing in the first year. Jerry was not
convinced.
Nine years ago, MMB launched its first Web site. It included information about the company
and its tours, but Jerry did not see any need to include an expedition-booking function on the
site. He did think about selling caps and jackets with the MMB logo, but that idea never was
implemented. The MMB logo is well known in the mountain biking community in the upper
Midwest.
The MMB Web site includes an e-mail address so that visitors to the site can send an
e-mail requesting more information about the expeditions. Robin Davis, one of MMB’s expedition
leaders, is an amateur photographer who has taken many photos while on the trails over the
years. Last year, she had those photos digitized and put them on the MMB Web site. The number
of e-mail inquiries increased dramatically within a month. Many of the inquiries were about
MMB’s expeditions, but a surprising number asked for permission to use the photos, or asked if
MMB had more photos like those for sale. Jerry is not quite sure what to make of the popularity
of those photos. He is, after all, in the mountain bike expedition business.
REQUIRED:
1. Review the five stages of customer loyalty shown in Figure 4-5 and prepare a report of
about 200 words in which you classify MMB’s customers. Estimate the percentage of MMB
customers who fall into each of the five categories. Support your classification with logic and
evidence from the case narrative.
2. In a report of about 200 words, recommend an e-mail marketing strategy for MMB. In your
recommendation, consider the results of MMB’s earlier print mail advertising campaign, your
answer to the first requirement, and the potential offered by permission marketing.
3. In about 300 words, explain how MMB could use social media-based viral marketing tactics
to gain new customers and cement its relationships with existing customers.

Explanation / Answer

1. Five phases of client unwaveringness would resemble:

Mindfulness: the name of the organization/or its items are perceived. No connection with the organization has been made - companions of the individuals who attempted MMB outings.

Investigation: in the stage the clients discovers more about the results of the organization. Correspondence might be through a Web webpage, the phone or email. This stage is about data trade - site that MMB propelled 4 years back is a decent approach to enhance this stage (before it wasn't that viable), since the majority of the clients originate from neighboring states.

Recognition: The client has finished a few exchanges with the organization, in spite of the fact that the client is as yet ready to shop with contenders - not very enormous with MMB since by far most of clients are rehash clients.

Duty: The client is happy with the level of administration and is in this way a rehash client. Clients now will inform others regarding the administration - most by far of customers fall in this class.

Thank your clients. Odds are you have rivals in your class, and this implies your clients have alternatives. The way that they picked you, regardless of whether due to your valuing or notoriety or accommodation, is something that you acknowledge, so indicate it. Express gratitude toward them. Say thanks to them each time for picking you and let them know in words and deeds how imperative your business is to them, paying little heed to whether they're your littlest client or you're biggest.

2. MMB's first endeavor to promote wasn't fruitful on the grounds that it wasn't effective and didn't contact the correct individuals. While email advertising will unquestionably be less exorbitant to the organization, it will likewise enable the chance to remain associated with current clients while contacting new and imminent clients. While considering email promoting systems, consent showcasing will best profit MMB. With authorization promoting, messages are sent to individuals who have communicated enthusiasm for your products or administrations and MMB could execute this technique utilizing its present workers. This technique for promoting would demonstrate significantly less exorbitant than the $246,000promotional mailing strategy as of now under thought. As have different organizations utilizing this strategy for promoting, MMB could achieve its objective of pulling in new customers.Posta-Solutions.com report that 61.4 percent of organizations utilizing authorization advertising report drawing in new, more gainful clients with 60.6 percent of these organizations trusting that consent showcasing gives them a long haul aggressive edge (2001).

3. Scaling up your viral showcasing effort requires a domain of simple access and coordinated effort. Ross Mayfield, author of Social content, begat the idea of the, "Power Law of Participation." In it, he portrays that web-based social networking gateways should make it simple to access, to peruse, and to share content. The aim is to quicken profitability and inventiveness by drawing in members to utilize their aggregate insight in sharing their insight and knowledge. The intelligence of the tribe will surpass the shrewdness of the person. This should be possible by MMB also.

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