The Business of People
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 with whom you choose to use them.
My Own Customer Experience
I use this example often when I talk about observing customer-centric initiatives (maybe it should be people-centric?) with retailers. A number of years ago, a nearby grocery store spent a lot of money re-inventing itself as a high end food competitor. One big problem was that 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, since 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 have 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 hear, and frankly am 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 aisles to locate products I could not find. Often the touch screen was out of order, or when usable was difficult and frustrating to navigate. To cut to the chase of this experience, when I finally reached 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 goal was improving service or just cutting employee costs, but in either case I dreaded going to this store, even though they did a reasonably good job of 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. The moral of this story is to understand what real value means to the people you want to serve!
Understanding How Technology Fits With Customer Engagement
Technology is a wonderful thing and provides many improvements to our lives, even in 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. If you are a typical chain retailer, you cannot depend on (for the most part) long established personal relationships to drive value. 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 (statistics show) provide 80% of your profit. So your first mission is to understand who these people are and give them plenty of special treatment.
How do I know how to treat them specially? Part of that “special treatment” is what makes you unique and is required for you to be in business. The other part relies on predictive analytic tools that can help you sort and model out signal indicators helping to pinpoint those human behaviors you wish to influence.
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 (customer relationship management). 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.
Let me use this example. You have a Facebook page with many people following you. You know certain affinities about these self-selected fans on your Facebook page.
You could, for example, make an offer on Facebook to one of these special people, sending a coupon to their phone for redemption at their favorite store. When the customer arrives, the sales associate—using their clientelling application—connects the current visit with the phone offer, pulling up all the data on this customer along with the coupon, to really create a “I know you” experience.
This customer engagement should be a well thought out sales process and executed consistently throughout your organization. If this is executed well, friends of this person will see on Facebook (if the customer elects) that they bought this item and had a great experience with you. Make sense?
There are many business processes and technology tools including emails, events and texting that also are part of this comprehensive system, but one fact needs to happen. You need to increase the frequency of visitation and dollars spent per visitation by that twenty percent or all of this is money for technology is down the proverbial toilet. If done well, making sure you have metrics and a feedback loop to your process, you can then expand to a new frontier, the 70-30 rule.
About the author:
Will Roche, the Senior Vice President at Raymark, is a passionate, creative leader who has been heavily-involved for the past three years in the conceptualization of Raymark’s customer centric CRM solution built on the Microsoft Dynamics platform. Having attended Clayton State University and Harvard Business School, Roche brings with him 33 years of IT experience garnered at both IBM and Microsoft.