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Rebirth of the Corner Store Relationship Better Data = Higher Profits -- by Chip House Up until the last few decades customer relationships were built one by one in the local hardware store, grocery, office or garage. Consumers bought most of their goods from their neighborhood store, and got to know their local merchant. For example, picture yourself as a customer of "Bob's Corner Store" in the 1940's. As you shopped with Bob, he would get to know your preferences. Bob might have learned that you liked jumbo rather than large eggs, wheat rather than white, and that though you thought skim milk tasted like water, you'd buy it if he was out of 2%. Bob's knowledge of your likes and dislikes made it easier for him to please you. It also helped him pick new items that you were likely to enjoy. And, if you were a happy customer you'd purchase more often and more of the new products he recommended. These days very few of us are on a first name, "how are Jeannie and the kids" basis with our local businesses. This same erosion of customer relationships could hurt your business. Fact is, in this competitive landscape a business without well-developed customer relationships is likely to fall by the wayside. Though our booming technology and economic abundance has made us all strangers to one another, it has also provided us with a valuable new way to build customer relationships; database marketing. Database marketing is all about capturing customer demographic, interest, preference and behavioral data and using it to market to customers in a more effective and cost-efficient manner. Great news is new email tools allow businesses of all size to do database marketing, and, as Seth Godin says, "turn strangers into friends, and friends into customers." How did Bob, the local merchant, find out what you liked? First, he observed your behavior (how often you came in, what you bought, how much you spent, etc.). Customer behavioral data is the best data to use to predict how they will act in the future (see last month's article on "Behavior vs. Demographics"). Second, Bob asked you what you like. Though you might not have a face-to-face relationship with your customers, getting customer data directly into a database is now easier than ever. For example, customer surveys can now be delivered right in the body of an email to quickly and efficiently gather customer preferences. Why not just use an offline survey tool? We've found that response rates for surveys delivered in the body of an email are 40 to 60% higher than for other survey mechanisms. What data do you capture? The data that helps you understand your customer's buying habits, preferences, and interests. Email is the best relationship tool ever invented. Due to low cost, ease of response and opportunity for interaction, email can help us all deepen our existing customer relationships and leverage them promotionally. A recent study showed that increasing the number of personalization elements in an email has a direct positive affect on response rates. For example, an ExactTarget client in the travel industry uses email-based surveys to discover the preferred travel destinations and favorite activities of their subscribers. This information enables the travel agency to deliver more personalized content, yielding higher responses. One application used recently was promoting golf vacations, not only to previous golf vacationers, but also to users citing a preference for warm weather and an interest in sports. Providing valuable, targeted content is the best practice for retaining customers. Once you know your customers, it's easy to leverage your relationship to gather even more data, and provide better, more targeted products and information their way. |
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