Knowing Your Customers as Individuals--Again

The current school of marketing maintains that "the battle for customers in the future will be won by marketers who understand how and why their customers individually buy their products, and learn to win them over, one customer at a time."

Selling Used To Be Personal

In the days preceding mass communications, customers were handled one-on-one by sales personnel. This still remains the model in most retail buying: knowledgeable salespeople assist customers in identifying the goods they need at any given instant, and over time, a good salesman will get to "know" his customers.

As companies grew, data became aggregated, and the marketing people at headquarters often lost sight of the customer as an individual, and this was to their detriment, as customers show a distinct preference for retailers who know them, know their needs, and provide personal attention and assistance.

And so, the recent attention paid to one-to-one marketing is not a new fad, but a return to an older way of business, before things went astray.

Bringing Back The Intimacy

From an industry perspective, the trend has been to aggregation: customer information is fragmented and compiled in databases for statistical analysis. This enabled companies to perform a broad analysis of all customers to make broad-sweeping decisions.

The drawback is that fragmented data paints an imperfect picture, and there are many instances in which a marketing plan based "on the numbers" fails to produce the desired results in the market place. In other words, a broad-based decision can produce broad-based results - and broad-based mistakes.

In the retail sector, successful companies recognize the power of selling in each store - empowering management on the store level to make decisions specific to his demographic area.

EDI Is Growing Up

The advent of the Internet has facilitated mass data collection - the ability to monitor customer actions on a very granular level, from the time they enter the door to the time they leave. However, the same facilities enable a company to track each of its customers as individuals, identifying their personal behavior, and identifying patterns that can be used to customize the Web site experience accordingly.

With increasing power at decreasing price, it's now much more feasible to capture and track more data. Previous database marketing was limited by the storage capacity and processing power of database technologies, and could often only produce aggregate statistics. Now, it's possible to narrow your focus to the individual within the herd.

The Customer Service Bar Is Raised

The "bar" in competitive markets is set by the industry leaders - and leadership in the market is granted by customers to the firms that best serve their needs. In the modern market, the industry leaders are the firms that provide the best customer service.

Much attention on the Web is paid to gimmickry and design, but the leading firms are more than just a pretty face: they provide access to information customers need. The author digs into a bit more detail, but he covered this same information in earlier chapters (information before the buying decision, information before the sale, information after the sale, ongoing support, anticipation of future needs, etc.).

There's also some discussion of how the information customers need is spread out over disparate systems across the organization, including many legacy systems, that must be cracked open to serve their data up through a central (Web site) interface.

What Do Your Customers Want?

Driving his stake even further into the ground, the author reiterates that success depends of providing what the customers want, not in deciding what you want to share with them. And customer wants are categorized into four buckets: product information, problem resolution, access to people, and access to process.

Product information was the first phase of the internet: companies posted brochure sites with information about their product lines, and nothing more. Later, product ordering capabilities were added, but the primary purpose of the sites remained communicating stock information about product offerings.

Problem resolution is the next step: giving the customer the ability to communicate back to you when they encounter a problem or have an issue that the information on the Web site does not address. Such issues may arise anywhere along the line - before the sale (a problem selecting a product or understanding product information), during the sale (questions about ordering process, payments, etc.), and after the same (returns, customer support, etc.). This was initially provided with static pages (answers to common problems), but later, a more interactive approach was taken to accomplish fundamentally the same goals.

Access to people gives the customer the ability to communicate with individuals within the company for a variety of reasons. It's a little unclear how this is differentiated from problem resolution, but my sense is that it is more immediate, interactive, and personal than a message exchange between a customer and the company.

Access to process enables the customer to access your systems to track ancillary data: information about their past orders, their accounts, the status of a current order, etc. the example used is package tracking through the FedEx site, and how that became a competitive advantage.

Customer Integration

Customer integration is the inclusion of the customer in the business - not just as the recipient of the order, but as an active participant in the current process as well as the evolution of the company's practices.

One example is product customization: giving the customer greater power in tailoring the product to his needs rather than providing a standard product. Customer participation helps companies to identify what customers really want via the options they choose (rather than a bundle of standard features). Allowing feedback and suggestions also enables customers to help the company define new products and new methods of serving the needs of the customer.

Other examples includes the analysis of zero-result searches to identify things customers are seeking that you do not provide, or analyzing the buying patterns of customers to identify product associations (customers who buy X also buy Y) that you may not have been aware of otherwise.

This is more immediate, and far more valid, than indirect market research, which takes a small sampling of customers out of the "real" ordering process and places them in a laboratory situation - and produces, as a result, skewed results.

Pace of Progress

In the present age, a five-year plan becomes invalid after six months, as both technology and customer expectations change very rapidly. This requires rapid response and development, and transitioning to a back-end architecture that is more flexible and adaptable than traditional IT systems.