4 steps to know your customer using data
Today's biggest retailers serve many millions of customers across a wide array of channels. How can they possibly know the wants and needs of each one?
In order to be successful in retail, you need to win your customer's loyalty and trust. In an age of multiple channels, however, this is easier said than done: you need to contend with a growing number of digital and non-digital touchpoints, as well as a corresponding increase in the volume of customer interactions, and this makes it difficult to know much about each individual's expectations, wants and needs, and hopes for the future.
And yet this is information you should know - your business depends on it!
One byproduct of digitalisation is that today's customers are very well-informed about your business, what you sell, and where else they can get the same thing. It's no longer feasible to win loyalty on the back of prices or the features or your products - you need to provide the best possible customer experience, which means knowing enough about your public to keep them coming back.
Until the 20th century, retailers were extremely good at this. A village shop would be the centre of the community, and the local merchant would know all there was to know about his 100 to 200 customers and use this information to drive his business. With the arrival of supermarkets, shopping malls and the internet, however, we've lost this proximity and the relationships that came with it.
Luckily, modern tools like big data give us the ability to win it back. Here's how:
1. Identify the single customer
Firstly, you need to learn to identify single customers. You can't build intimate relationships with demographics and market segments, but you can with individuals. In order to get started, you need to collect and merge whatever data you already have - it's no use if your insights are scattered across different sources and can't be consolidated into a single 360-degree view of the customer.
2. Differentiate customers
The second step is to learn how every single customer is different from the next in terms of expectations, wants and needs, as well as the value they create for your business. This value may be financial, but it could also mean what you learn from your relationship with each individual.
3. Interact with the customer
Thirdly, you need to use this newfound understanding to optimise the way you communicate and interact with every single customer. This is an opportunity not only to drive them towards channels that are efficient from a sales perspective, but that also allow you to learn more about their attitudes and lifestyles and tailor your communication accordingly.
4. Customise the dialogue
The final payoff comes when you start to capitalise on the richness of your knowledge. Once you've acted on the three steps above, you can personalise your dialogue with each.
Digital customer experience management in retail
Download our white paper and read how to create a digital customer experience in retail sector. We concluded over 200 Nordic retail sector decision-makers in Finland, Sweden and Norway to gain insights into their firms’ digital CEM challenges, pain points.