Whirlpool 2004 Annual Report Download - page 12

10
The Value of Customer Loyalty
(A) Winning the loyalty of customers
means more than hoping they're
satisfied enough at the end of the
product life cycle to repurchase the
same brand.
(B) For Whirlpool, it means leveraging
the strength of our brands and
innovative products to create an
emotional link with customers that
leads to cross-purchase of other
products for the home.
(C) The ultimate level of customer
loyalty is achieved when appliance
owners, impressed with their
products, become “evangelists”
recommending the brand to others
who begin cross-purchasing
behavior, thus dramatically
influencing sales growth through
repeat purchases and brand
extensions. Likewise, loyalty delivers
better shareholder value because of
lower costs for customer acquisition
and retention, and higher profitability
from customers who are willing to
pay for relevant innovation and
brand value.
The Evolution of Customer Loyalty
Year 1Year 10
Retention
Cross-Purchase
Recommendation
Whirlpool's customer loyalty strategy is a long-term commitment that builds upon our strengths in
global manufacturing productivity, trade partner management, innovative products and strong brands.
Whirlpool's focus on customer loyalty is recognition that
winning the rational and the emotional loyalty of
consumers differentiates our brands and directly influences
purchasing behavior. Loyalty for our portfolio of products
and brands also will further extend our business into new
areas of the home.
Creating unmatched customer loyalty requires unique
solutions built on a platform of innovation. In 2005, we
will accelerate the rate of new product introduction from
our innovation pipeline, which is featured later in this
report. The current pipeline is robust and growing, fed by
the new ideas and possibilities that continually emerge
from our company-wide innovation process. The ever-
increasing rate of commercial introductions from this
pipeline will help grow our business well into the future.
Perhaps the most compelling part of this strategy is in
the potential return on our investment. What is customer
loyalty worth? We believe every point of increased
customer loyalty will create millions of dollars in
additional revenue. Accordingly, we've set ambitious
business goals to double our customer loyalty
performance in the years ahead.
We also made significant advances instilling the
customer loyalty concept throughout the entire network
of Whirlpool people worldwide, leading to greater
integration of loyalty initiatives within our short- and
long-term strategic planning processes.
Today, our brands are creating memorable purchase
and ownership experiences for our customers based on the
foundation of our industry leading manufacturing
infrastructure, strong trade partner relationships, and our
robust innovation pipeline of products and new business
opportunities.
Customer loyalty is about winning the hearts and
minds of consumers worldwide. Indeed, it's the heart of
our strategy and the daily mission of Whirlpool people
everywhere.
(A)
(B)
(C)
Whirlpool Duet Laundry Success Confirms Strategy
The Whirlpool Duet laundry machine was the first product to provide clear evidence that customer decisions
involve both rational and emotional decision factors, based on a groundswell of consumer demand and preference
unlike any we had seen previously. Today, three years after its introduction, the Duet laundry machine is the #1
selling front-loader in the industry and sales continue to grow along a robust price/volume demand curve. The
results confirm that our strategy is working, and that loyal customers are willing to pay for the value it delivers.
Customer Loyalty is a Behavior