Too many companies, David Gee says, focus on everything but customer loyalty. Constantly offering deals to attract new business, they pay little attention to the fact that customers are leaving through the back door. “Traditional marketing has always been about gaining new market share,” said Gee, chief executive officer of Bungee Loyalty Programs, a Lake Geneva area firm that creates customer loyalty programs.
What some companies are realizing, Gee says, is that it costs five times as much to get a new customer as it does to keep one.That said, Bungee Loyalty tries to stop the flow of customers leaving a business - whether it’s a car dealership in Dubai or a plastic surgeon’s office in Toledo, Ohio. Gee’s firm designs and manages loyalty programs so that business owners can concentrate on bringing in new customers and developing new products. His firm does the back-office work that includes managing rewards websites, keeping track of program points and watching what people are spending their money on.
“We develop the marketing to get people into the program, and we can integrate the software into a company’s website,” Gee said.The goal is to reduce customer churn and increase customer spending.”It all comes down to return on investment,” Gee said.
Bungee Loyalty spun off from Sales Sherpas, a marketing business that Gee started four years ago with a $200 investment in business cards, pens and sticky notes. Gee is a former marketing executive from the telecom and health insurance industries. While at TDS Telecom in Madison, he developed a customer loyalty program.
After he was laid off from Humana insurance company, he launched Sales Sherpas from his home in Elkhorn. “It was always my passion to have my own business. But, until then, I never had the guts to pull the trigger and do it,” Gee said. Bungee Loyalty now has a core group of five people who develop and manage customer loyalty programs. Gee’s business partner is Troy Wise, chief technology officer.
The company secured $500,000 in financing and this year aims to have $1 million in sales. It has a project manager in Atlanta and is seeking a salesperson in San Francisco.”We are going after the best talent we can find. There’s no reason they have to live here,” Gee said.
Bungee recently signed a deal with Salesforce.com to sell loyalty programs. Salesforce helps businesses manage sales and claims to have more than 100,000 customers. “This is going to change our world,” Gee said.
Businesses that sell discretionary-income products, or are in highly competitive markets, benefit from customer loyalty programs.The standout companies include Starbucks and Hilton Hotels, according to Gee, who teaches marketing at University of Wisconsin-Madison and has a master’s degree in business from Marquette University.
“Those are the gold standard. They do a good job of understanding what the customer wants, their interests and how their behaviors change,” Gee said. The airlines and cable-television industries don’t do as well, according to Gee. “They tend to be at the bottom,” he said.
If you would like learn more about Bungee call 800-287-7198.