It is interesting how we use words like customer and
consumer to refer to people who purchase goods and services from our companies.
I recently heard the term “B to P” vs “B to C” which really caught my
attention. The quest to have a closer more relevant relationship with people
who purchase goods and services from us is about understanding human behavior.
I can see how retailers are chasing the hype of social networking, mobility and
such things as clienteling to get ahead of competition not really understanding
the core drivers. At the core people generally behave on fairly predictable
terms so it is important to understand what levers you have as a retailer to
drive these behaviors and to whom you choose to do it with.
I use this example often when I talk about observing
new initiatives driven by technology. I have a grocery store close by which a number of years back spent a
lot of money re-inventing themselves as a high end food competitor. One big
problem was they thought they could automate service and bypass employee costs
via automation. As I walk into this store I am immediately presented with the
option of joining their “loyalty card” program via a nice looking kiosk. I walk
by as I am not interested in spending my time typing on a computer. As I enter
the start of my shopping experience with my shopping cart I am immediately
presented with a wall of “personal shopper” devices that I can use if I had a
“loyalty card” and the desire to figure out what they were for? Entering the
fresh produce area there is a large flat screen with someone talking which I
can’t quite understand and frankly not interested in hearing. As I choose some
fresh produce I see that I have the opportunity to weigh and print out a label
which can be scanned at the checkout. Interesting, why would I want to do that
I ask myself? As I go through the store I see additional attempts to add value
such as touch screen devices on certain isles to locate a product I could not
find. Usually it was out of order or when usable difficult and frustrating to
navigate. To cut to the chase of this experience, when I went to finally
checkout I was forced to go through a self-checkout because there was only one
lane open for full service and it was full? I am not sure whether the thought
was how to improve service or just cut costs for employee’s, but in either case
I dreaded going to this store even though they did a reasonably good job
merchandising their products and providing the products I wanted. I actually
would drive a few miles out of my way not to go there. Consequently I never
really saw any traffic at this store and they are no longer a brand in
business. Morale of this story is to understand what real value means to the
people you want to serve! Read this blog I recently posted about another grocer
Technology is a wonderful thing and provides many
improvements to our lives and even how we purchase things. Understand though
that technology is a tool and as retailers you need to first understand and
know who your customers are and what makes them tick as it pertains to your
offerings. So before running off and buying some expensive new gadget for your
stores, think hard about how it will help drive your core mission and value
proposition. You should never waiver from this; it is easy to get caught up in
the latest “shiny thing”. However as a person that has spent over thirty years
in technology for retailers I do have some insight that I would like to share.
The first is data. You cannot know your customers without
data. Not being a local corner store and with constant turnover of employees
you cannot depend on (for the most part) long established personal
relationships to drive value if you are a typical chain retailer. Data about
your customers and more importantly what you do with this data is critical to
the development of relevant relationships with the people you serve. Most
everything in this world fits into Pareto's Principle - The 80-20 Rule. Twenty
percent of your customers will or should statistically provide 80% of your
profit. So your first mission is to understand who these people are and
manically treat them special. How do I know how to treat them special? Part of
that is what makes you unique and is required for you to be in business, the
other is to have predictive analytic tools that can help you sort and model out
signal indicators helping to pinpoint those human behaviors you wish to
influence with that twenty percent. This is the real “secret sauce” and you
need to really look hard at the many options you have as a retailer in this
area. Many companies want to sell you large complex storage eating monsters,
you don’t need that! What you need is a comprehensive solution that acts as an
engine using this data in many ways and channels to better serve the people you
have chosen to have a relevant relationship with. This engine is typically
called CRM. CRM is the repository and delivery mechanism of customer
information which allows you to operate real time with your customers providing
consistent and relevant experiences.
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