Unit 3 Case Montana Mountain Biking Jerry Singleton founded Montana
Mountain Biking ( MMB) 18 years ago. MMB offers one­ week 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 expeditionbooking 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.

Case Summary:
In a narrative format, discuss the key facts and critical issues presented in the case. Montana Mountain Biking (MMB) is a company that focuses mainly on mountain biking. The central business provided by MMB is guided mountain biking expeditions. These expeditions are based in four
Montana locations and last an entire week (Schneider, 2013). Although approximately 80% of owner Jerry Singleton’s customers are repeat customers returning for more, but his new customers are mainly referred by word of mouth.
Advertising choices have not been successful, and they have cost more than they have brought in for MMB which concerns Singleton. MMB

has researched several different marketing strategies, but the most promising choice showed the possibility of positive results after several years. MMB opened a website about 10 years ago which includes basics about the company, but there are no products advertising the company for customers to purchase. The site does not include any type of function that would allow customers to book dates for expeditions. The only form of contact between the customer and the business is through email.
There is one interesting incident that has become a popular part of the business. One of the expedition guides, Robin Davis, has always photographed her tours, and began posting the photographs on the website. The popularity of the images was unexpected. The number of of e­mail inquiries increased dramatically within a month, and although many were regarding expeditions, the majority were requesting permission to use the photographs (Schneider, 2013).
MMB has a business that has the opportunity to flourish with the recognition of healthy, athletic benefits people are experiencing today.
Even with several failed attempts at advertising, the experience with providing photographs has actually opened the door to a new phase into the technological advancements available. The sky is the limit if approached in the proper manner.

Case Analysis:
Review the five stages of customer loyalty shown in Figure 4­4 and prepare a report 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.
MMB has ultimately maintained its business from repeat customers.
Although their new customer base seems to increase at a slow pace, mainly from the advertising strategy pursued, a closer look at the five stages of customer loyalty may give some insight as to where MMB shold focus when it comes to marketing. Companies should strive for a consistent customer experience at each level whether they are online or offline customers (Schneider, 2013). Stage one is awareness. The MMB brand is a recognized name within mountain bike communities. The majority of their business comes from word of mouth and repeat expeditionists. Outside of this world, the brand is not as popular simply because people are not aware of them. The reason for this is the lack of marketing efforts outside the cycling community. I would estimate those who are deeply involved in mountain bike expeditions are 100% aware, and approximately 10% of those who are not would fall into this category. When a customer becomes aware of MMB, it is usually from word of mouth. Those from other areas may run across the website and find an interest as well. The exploration stage is the place where a potential customer explores the company further. MMB offers a website and e­mail correspondence for those who wish to receive more information. I estimate
40% of MMB’s customers are in the exploration stage, and prospective customers would be higher around 80% because they are still looking for information on what they want. Familiarity is estimated at 60% for current customers because although the customer may have thoroughly enjoyed the service, they may not live in the same region and travel may be an obstacle steering them somewhere closer to home.

After experiencing a considerable number of highly satisfactory encounters with a company, some develop a strong loyalty to that company
(Schneifer, 2013). I would venture to say that 95% of MMB’s customers fall into this category. My reasoning is because of the 90% repeat customer statistic provided by MMB. This is where the loyal customers lie, and they will keep coming back as long as the product or service remains satisfactory. Separation stage is where the glory fades, and the service is no longer desired or has fallen below what is expected. MMB appears to have had no problem staying in business, and most of the business seems to be repeat customers. I would estimate 10% fall into the separation stage.
When customers are coming back, they are obviously still in that commitment stage which is right where MMB wants to keep them.

Case Analysis:
Recommend an e­mail 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. Considering the cost that would be incurred by BBM with the print mail, and the possible return of 1 to 3 percent, an e­mail strategy would fit

the business better in relation to customer base and cost. Purchasing an e­mail address list can range from a few cents to a dollar, and the conversion rates are from 10 to 30 percent. E­mail is a primary form of communication these days, and is much less time consuming which means the customers receive information much quicker.
The main drawback to email marketing is that many consumers can consider the emails as spam and hold it against a brand's reputation. If customers feel they are being bombarded by unwanted emails from a business, they will be less likely to become a new or repeat customer (Email Marketing).
Obtaining an e­mail list would be a start for MMB. If the opportunity were there to obtain lists from nature and exercise enthusiasts, this would be a huge plus. Creating the first e­mail would need to include several things including a welcoming layout, beautiful image(s), an eye catching subject, and an inviting description of the services provided by MMB. The email should also include a link for those who are interested in receiving future e­mails to make that choice. If they refuse, it narrows the potential target that must be interacted with. Using permission marketing would allow MMB to be more intimate and focused on what they do best, expeditions. Once the initial e­mail group is established, future emails can focus on gaining more interest through special pricing, different packages, products, etc.
Good email content deepens your relationship with your audience through effective subject line writing (getting your messages opened), your distinctive voice (getting those messages read), and delivering quality, niche specific content your prospect needs and shares with others (inspiring referrals and word­of­mouth) (
Email Marketing
Essentials).
A personal touch communicated through requested e­mails along with great visual imagery and special offers and tips are all ingredients for a successful e­mail strategy for MMB.

Application:
Prepare a report in which you outline an affiliate marketing strategy for MMB. Include a description of the types of Web sites that MMB should attempt to recruit as affiliates, and present at least five examples of specific sites that would be good referral sources. Affiliate Marketing requires a company to have their own website in which they can be referred to by the affiliate.
Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model (Affiliate Marketing­Marketing
Terms).
MMB is a company that offers mountain biking expeditions. The customer base is a more select group of consumers who are avid mountain bikers because the expeditions are a week in length. When considering prospective affiliates, MMB should approach other athletic type sites that are focused on outdoor excursions, cycling gear, health conscious active individuals, and even travel sites. Choosing sites to affiliate with is a matter of direction and who is targeted. I would recommend the following sites:

1. This is an adventure travel site that specializes in active outings. www.Backroads.com 2 .
Butterfield & Robinson has been providing adventure trips since 1966.

www.butterfield.com 3. Bike Magazine has everything from bikes to equipment www.bikemag.com 4. Enduro Mountain Biking is another popular biking site www.enduro­mtb.com/en/ 5. Bike Country focuses on clothing and gear used in mountain biking www.backcountry.com/rc/mountain­bike­clothing

As stated earlier, there are many choices to be made, but with a little bit of time and research, MMB could easily identify the sites they decised would best suit their needs to affiliate with.

References 25 Email Marketing Ideas The Pros Use. (2014, July 16). Retrieved July 27,
2015, from http://fitsmallbusiness.com/email­marketing­ideas/ Affiliate Marketing ­ Marketing Terms. (n.d.). Retrieved July 27, 2015, from http://www.marketingterms.com/dictionary/affiliate_marketing/ Backroads. (n.d.). Retrieved July 27, 2015, from http://www.backroads.com/ Bike Magazine ­ Mountain Bike Photos, Reviews, Videos, Trails. (n.d.).
Retrieved July 27, 2015, from http://www.bikemag.com/ Butterfield & Robinson | Biking and Walking Since 1966. (n.d.). Retrieved
July 27, 2015, from http://www.butterfield.com/

Email Marketing: A Small Business Guide. (n.d.). Retrieved July 27, 2015, from http://www.businessnewsdaily.com/4488­email­marketing­guide.html Email Marketing Essentials: The Keys to Email Marketing that Works.
(n.d.). Retrieved July 27, 2015, from http://www.copyblogger.com/email­marketing/ Home. (n.d.). Retrieved July 27, 2015, from http://enduro­mtb.com/en/ “Mountain Bike Clothing”. (n.d.). Retrieved July 27, 2015, from http://www.backcountry.com/rc/mountain­bike­clothing Schneider, G. (2013). Electronic Commerce (10th ed.). Cengage Learning