Virtues of loyalty: Marketer rewarded with big growth
St. Petersburg-based Kobie Marketing has seen its growth skyrocket since 1990, when it was founded as a family-owned direct marketing company.
The success didn’t come overnight, however. It required a change of direction and big investments in technology, specifically data analytics. In 2006, the company built a new proprietary software platform called Alchemy, in addition to increasing its advisory and consulting capabilities. That completed the pivot, begun in 1995, from direct marketing to customer loyalty and strategy.
"While we brought along a couple of existing clients through the transition," Hechtkopf says, "we essentially overhauled our existing business model, and we had to focus on new markets and new prospects to build our business around this new model."
Kobie's focus on customer loyalty marketing programs has won the business of major nationwide brands like AMC Theaters and Best Buy. The move away from direct marketing — think infomercials and other direct-response TV ads — has been nothing less than transformational. Kobie has made the Inc. 5000 list for fast-growth companies the past seven years, and revenue have grown 181% since 2014, from $25 million to $70.3 million last year. The success has prompted a hiring frenzy in which Kobie has grown to nearly 500 employees and opened a second office in Dallas.
Clients include retailers, banks, restaurants, media, active lifestyle and subscription-based businesses. Says Hechtkopf: "Anyone who's interested in identifying, attracting and retaining their best customers comes to us.”
“Anyone who's interested in identifying, attracting and retaining their best customers comes to us.” — Kobie Marketing CEO Bram Hechtkopf
Hechtkopf offers AMC’s Stubs program as an example of a Kobie product that helps companies engage customers in relationships that drive incremental buying behavior and generate loyalty. People who enroll in the program can accumulate points when they buy movie tickets, and then use those points to save money on popcorn, skip the line or get free passes for future visits.
The gold standard of customer loyalty programs, of course, is Amazon Prime. Many other companies have since followed the web giant with similar programs.
“We're seeing a rising tide in subscription-based models, or fee-based loyalty programs,” Hechtkopf says. “More and more companies are interested in building relationships and having personalized communications and dialogues with customers, and getting to their customers better. Loyalty is a great mechanism for doing that.”
Kobie has an in-house design agency, staffed by 20 full-time employees, that can create a full-blown loyalty- or rewards-based marketing program from scratch in two to four months. That work breeds customer longevity. “Most of our client relationships are five, 10 years plus,” Hechtkopf says. “So once you work with us, we tend to work with you for a long time.”
That consistency has been great for Kobie’s bottom line. Hechtkopf says topline growth for 2018 is forecast to be “north of 30%” and net revenue growth should be around 26%. He also expects the company to “hire quite a few more teammates this year.”
The company has also made news recently with some splashy new additions to its leadership team. In January, former Walt Disney Co. and Bloomin’ Brands Inc. executive Larry Roos was named chief information officer. In July, Mark Chronister, an 18-year banking industry veteran, left MBNA America to become Kobie’s chief growth officer, while former Xerox Corp. executive Jean-Louis “J.L.” Casabonne was named CFO. “Being able to attract and retain amazing talent has really helped propel our growth,” Hechtkopf says.
The outlook for Kobie, both present and future, isn’t all rosy, however. Hechtkopf worries a lot about hackers and data breaches. “There’s just so much data out there,” he says. “We have an obligation to our clients to protect their data, to protect their customers’ data. But it’s not only about how you protect people's data, but how you communicate how you're going to use their data.”