A major retailer boasted that by the time their customers left the parking lot, the point-of-sales data was ready for analysis in the enterprise data warehouse.
This statement impressed me! It implied that the retailer had transferred the data to their processing center, cleansed and loaded it into the data warehouse, all in a matter of minutes. That requires an extensive infrastructure!
What is the Payoff?
Over the past months, this statement continued to stick in my mind. Yes, it is impressive from a technical perspective. However, is it impressive from a business perspective? What is the payoff to the retailer for having this capability?
Let's brainstorm a bit. We can immediately detect sales trends at the store level. For example, if there is a flu outbreak in the community, we will know about the trend before the local medical centers do. Using this analysis, we can stock popular flu items immediately and run specials on these items. We can place orders with suppliers earlier than our competitors, thus replenishing stock sooner and avoiding unhappy customers. We can stock a greater variety of flu items, thus giving our customers a greater selection. There are probably other actions that a sharp store manager would do to take advantage of the increased consumption of flu medicine. Further, we can capitalize on opportunities at the regional and national levels from the early detection and dissemination of significant sales trends. For instance, we could notify store managers within the region about the flu outbreak, allowing those stores to be better prepared.
Despite these benefits, the major retailer is missing the boat in realizing business benefits. For those specific customers, we only know about them after they leave the parking lot. We have not enhanced their current shopping experience. If their experience was disappointing, we have probably lost them as a long-term customer. If we are concerned about improving the customer experience, we need to know about our customers earlier, as they enter our store or even before.
In the November 2002 issue of DM Review, my column entitled "Forward to the Past" discussed how businesses of one hundred years ago normally exhibited a surprisingly high degree of intelligence about customer relationships. How would a typical proprietor of that time (e.g., Mr. Franks) influence our shopping experiences? He would immediately greet us and exchange sincere pleasantries as he asked what we needed. He would consider it a slight insult if we wandered around the store without his assistance. In contrast, when I go into a major department store today, it may be an hour before I interact with an intelligent life form.
Improved Customer Experience
What if the next time I shop at Home Depot, I am met with a friendly kiosk where I swipe my Home Depot Frequent Customer card. Instantly, my past purchasing history is used to present a customized menu of items that I am likely to need (e.g., halogen light bulbs; they keep burning out). The kiosk would print a sheet showing the location of the halogen bulbs, a table listing all the bulbs in stock with prices and a custom coupon for a 20-percent discount on one of the items (which happens to be overstocked). As I walk back to the electrical department, the manager of that department greets me by name and asks if there are problems with my halogen light. After informing me that the manufacturer has recalled that light fixture, he suggests replacing the entire fixture with a non-halogen version.
Now, that was a quality visit. I spent more money for the up-sell and felt better for it. Instead of buying a Band-Aid, my underlying problem was diagnosed and resolved.
The early touch principle is: When a customer touches your company, the earlier that intelligence about the full context of this customer is applied, the greater the quality of the transaction, thus increasing revenue potential and customer loyalty.
A touch experience is any time a customer interacts with your company, such as visiting a store, calling a service center or surfing the Web site. Full context means to leverage any business dimension (time, product, store, segment, etc.) that lends insight into the customer's situation and needs.
Mature Web sites taught us this lesson several years ago. When I visit Amazon.com, they know me immediately and cater to my (predicted) needs. While it is a bit scary, there is a convenience factor that draws me back again and again.
It is unfortunate that the typical grocery store knows nothing about me until I am ready to leave the store. Let's apply the early-touch principle. What if by swiping my frequent customer card as I enter the store, I am shown my typical purchasing profile, along with a suggested routing through the store so that I collect the items quickly. In addition, special bargains on related items are listed. After fine-tuning, I hit the print button, and I am on my way.
Let's extend the early-touch principle to my pre-shopping experience. What if my grocery store sends me a weekly e-mail that lists relevant specials, based on my past purchasing history and current seasonal variations. This saves me time because I can avoid random scanning of newspaper ads. In addition, the e-mail contains a direct link to "myGroceries" profile so that I can tune that profile to be more relevant to my current needs. I now have an incentive to return to that store and an opportunity for a productive visit when I do.
Bottom Line: Apply the early-touch principle to your company. How early can you know about your customer and apply proper intelligence about their needs to enhance the quality of their experience? What is the incentive to the customers to disclose their information early in the touch experience? Have you established a trust relationship with your customers so that their information is not misused?
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