With the growth of the online marketplace, sellers are gaining dramatic new ways to get products before a wide, and changing, audience as well as a powerful suite of new tools to understand what is happening in the cyberspace of commerce. Big data and analytics have shown us a new horizon of information about how, and what, e-commerce and its participants are doing or not doing.
But combine the growing reliance on statistical approaches to the marketplace with our penchant to turn everything into an abstract variable that can be managed by more data and more expensive software, and we risk losing touch with the only thing that, in the end, makes any of this worth doing -- the customer.
Customers are not data points on a distribution curve, but individuals who make decisions based on a variety of sometimes complex, even illogical but nonetheless real, factors. Historically, sellers have known this and have tried to attract and keep customers by understanding them and giving them a shopping and buying experience that encouraged them to return. Planning, testing and creativity all went into the mix to deliver these experiences.
Different Era, Same Challenges
From your local grocer, store clerk and barkeep of yesteryear, who knew you, knew your family, never failed to ask how things were going, and where you would always return when you needed groceries, sundries or a shoulder to cry on, we have turned customer relationships into “customer relationship management,” “customer experience,” “customer success” and “customer analytics.” Most of these come with their own acronyms and all sport experts who tell us how to manage them. But few of them include much actual interaction with or thought about real customers.
Things have changed -- a lot -- as the Internet has become the store and clicks or screen touches have replaced first name greetings and handshakes across the counter. Relationships between customers and sellers have also changed, as they must. Carmaker Saturn could only afford to hold a yearly owners’ picnic at the factory for a few years before the sheer size of their owner community overwhelmed it, and Appleby’s restaurant chain probably held on to its “eatin’ good in the neighborhood” slogan, as did Olive Garden its “when you’re here, your family” longer than it made sense for national franchise chain eateries located mostly in mega shopping centers. And of course Diner’s Club was never really a club, something its acquisition by Citibank probably attests.
But the reality behind this history hasn’t changed: people still return to sellers where they feel something beyond product pictures and prices. If you want repeat business -- long recognized as the least costly and most predictable revenue you can get -- you must give the customer something to come back for.
If you can always offer the most merchandise at the lowest cost with the fastest shipping, you will keep some people coming back for no other reason than that. But only a few huge firms like Amazon can hope to approach that level of market hegemony, leaving the remainder of the marketplace contesting for the crumbs. Even Amazon, hedging its bets, has developed an additional way of bringing people back: Amazon Prime for which you pay a yearly fee in return for mostly free shipping all year long.
Other firms have tried other methods to make customers feel special. A major e-commerce clothing vendor, for example, sends repeat clients -- my wife included -- frequent special deals for repeat customers and “Best Customer” awards to make them feel appreciated. Other firms have repeat customer appreciation days -- and exhortations -- to make frequent customers feel they are in some way special. And there are the membership cards you get from sellers to make you feel like an insider even though the cards were unsolicited and have no real meaning. The personalized “welcome back Jim” messages on vendor websites after you log in are another way of letting you know that you are not just anyone happening by.
Plan and Test, Then Analyze the Results
The move to big data analytics has a great deal to offer in this world -- telling us how we are doing at what we are currently doing. But it also threatens to upstage the realization that customers, while part of a mass of transactions, are also people who act according to their individual desires, intentions and preferences. You might say that when statisticians take over from relationship planners and marketers, something important is in danger of being lost.
The movement toward turning customer relationships into abstractions to be measured instead of planned has already had its way with many firms, with mixed results. There is a growing sameness to the e-commerce market, driven to a great extent by analysis of how customers behave in individual transactions but without much sensitivity to why they behave that way or how best to encourage them to keep coming back. Big data and its analytics can learn something from more traditional marketing, by learning to focus on prospective customers’ reasons for choosing certain products and vendors over others. While statistical analysis can tell us how a particular approach is working, it is less likely to shed much light on the reasons why consumers made those choices.
In earlier days, these functions were performed by focus groups, questionnaire/surveys and other more direct ways of measuring individual customer preferences and buying triggers. While today's online marketplace doesn't lend itself to such tools, it still needs means to discern how customers and prospects are likely to react to our marketing and engagement efforts, before we spend the resources and time developing and implementing them. Barring that pre-knowledge and planning, even if it is only moderately specific, we are chasing customers on a near trial and error basis, with severe penalties for being wrong.
You won’t hear much about this need from the big data, CRM and analytics folks, probably because this kind of pre-planning will involve more people than machines and software, but without effective planning ahead of implementation, everyone including the consumer is likely to suffer as the digital marketplace becomes increasingly stale.
Keep the Balance Between Creativity and Measurement
The bright future all vendors want will be built on a balance of careful and creative planning for customer relationships, backed up by sophisticated management and analytics to tell us how our plans are working and to help us decide when and what kinds of course corrections make the most sense.
It won’t be easy, but it’s worth doing if the digital marketplace is to take its rightful place in our culture and lives. In any case, we need remember that all of this starts with people pushing the “on” button and ends with people clicking the “buy” or "elsewhere" buttons. It is those people who will decide our future.