Several years ago I learned the inside world of retail customer intelligence and some of the many methods stores use to gather information from shoppers, how they use the data and, even more interesting, how they would like to use it. What started as a salesperson’s good practice of knowing the customers, what they like, their kids’ names and surprising anecdotes has turned into a marketing industry fueled by massive data warehouses and growing attempts to harvest as much information as possible. Marketers call this, almost euphemistically, customer relationship management, or CRM, and it has a huge impact on the design and user experience of many services and brands.
From a consumer standpoint, the visceral response to this attempt to have a “relationship” has been defensive: Don’t track me, respect my privacy, I have my rights, etc. But similar to family, friends, coworkers and enemies, we do form relationships with our brands. A great relationship affords all kinds of returns. Some brands we just love and they get the spoils of that relationship: our loyalty. Many, however, especially in retail, maintain a dull business-like association. And some of them we don’t really want to be friends with at all—but have felt forced to, proving that we have a price. If you have handed over a loyalty card at the grocery store, you’ve agreed to sell your shopping history, combined with some personal information, in exchange for a “member price.” How does that make you feel?
The days of these business-like relationships are approaching a big change. Consumers are starting to understand how smart software can be—and with that are developing a savvy set of expectations. They want real value for their data. They want to be known once again.
Unfortunately, most marketers can’t seem to use the knowledge and equipment they’ve been given to deliver the value that you would expect. In this case, the equipment is almost unlimited computing power, open channels of direct communication with consumers combined with masses of knowledge about consumer behavior. It should lead to a more bountiful relationship for all.
To leverage the abundance of data, here is a set of principles that is very achievable using contemporary computing power, data mining and communication tools. These should not be considered magical. In fact if you find them obvious, you are already expecting more of the software that pervades (or invades) our lives:
Adapt to my active behavior: I clicked on an ad or redeemed a coupon. Give me more. Propose other brands that yield that kind of saving profile. But please don't bury me in 10-cent coupons for the house-brand of soup that I have never bought and never will.
Adapt to my passive behavior: Have I ever redeemed one of those point-of-sale coupons that your grocery store dispenses? Do I ever open the emails you send? Figure that out and adapt.
Use the information you have: Don’t fill my inbox just because you have my email address. I took the time to open and consider this correspondence only to see that you are offering me a 20 percent discount to become a member when I already am one—thanks for nothing! Or worse, suggesting I buy a product that I already purchased from you.
Don't try to be smarter than you are: My favorite and frequent online retailer processed a burst of orders for My Little Pony characters in the 2011 holiday season. Despite my other activity throughout the year, my top recommendations for new purchases are still many variations of My Little Ponies! I can only conclude that my friend the e-tailer thinks I’m a part of a band of awkward rainbow-loving men nicknamed “Bronies” who share an infatuation with the pursuits of these inspired little pink creatures.
Use free and widely know information: Like the calendar and the weather. What do I do at this time each year that is unique (like buy little girl gifts at Christmas)? The Pony Castle (which I never bought) at the right time is a very valuable recommendation that I will thank you for.
Be a good listener: Instead of acting like a spy, act like you want a relationship. A good listener asks the right questions at the right time. But be careful, don’t ask me questions that you should already know the answer to. Do ask me about things I never do, like: “Hey, you never use those point-of-sale coupons; should I stop giving them to you? What would you like instead? Maybe a nutritional summary of everything you just bought? A comparison to how other people are shopping?”
The value of understanding consumers may not be measurable in short-term dollars and cents but will be over the life of a relationship filled with great experiences.
I will let you know if I don’t feel like talking.
Published in IDSA's quarterly journal INNOVATION Spring 2013.
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