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LoveFilm boss: Make them loyal, make them pay

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How do you move your business beyond functional marketing to genuine engagement and customer loyalty? LoveFilm’s Simon Calver gives his take.

The movie rental brand today has 1.6 million subscribers across the UK, Germany, Sweden, Denmark and Norway.

LoveFilm boss Simon Calver tells us that the service is built around three core customer values: range; value; and convenience.

“Pretty early on, we decided that we wouldn’t just be about rental,” he says. “So we added things such as cinema listings and an online DVD store. We wanted to provide as many services as possible to make our customers love us.”

Calver says the big marketing challenge is that there’s “no silver bullet”: “We can’t just rely on, say, paid search or direct mail. We have 500 different marketing activities/promotions going on at the same time and managing all of those is tough. We measure absolutely everything.”

The company threw itself into television advertising in 2007: “We went in headfirst, spending £2m out of our £2.5m marketing budget on TV ads. And despite having a slightly fifties, out-of-date look, they were our best form of advertising.

“There’s always talk about how entrepreneurs are big risk takers. But, in fact, when you’re running your own business, you make sure the way you roll the dice is in your favour. Every move is calculated. Entrepreneurs are far actually more analytical and focussed than many big corporates.”

Calver says word-of-mouth recommendations and PR are also incredibly powerful. “We get 200-400 pieces of coverage a month,” he says.

Don’t ignore your quiet customers, adds Calver. “If one of our subscribers isn’t watching any movies, we don’t just ignore him and consider it easy profits. We’ll communicate with him and ask him what more we can offer. And yes, we’ll even tell him he should be on a cheaper package!”

Calver says we’re in a “hybrid” age where digital and physical must work together. “People are still unsure about what tech they actually own so it’s going to be a while before we go fully digital. We don’t know the pace of change so we’re making sure we’re hedged. We still own 7,000 physical titles. But our goal is to reach 20 million connected devices.”

Oh, and according to Calver, women still make the decisions when it comes to the remote control!

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