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| Capturing (and Keeping) Your Customers, Part 2 |
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Capturing (and Keeping) Your Customer: The Goal of One-to-One Marketing
This is the second in the two-part series describing how this effective business concept is put into practice. In this article, Helen Chantos, director, International Services, National Housewares Manufacturers Association, looks at identifying your customer.
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| Identifying Your Customer |
This new type of customized marketing is based on first identifying the customer. "Customer data is the most valuable asset a company can have. The one-to-one enterprises starts with a customer and finds products for that customer," Rogers says. This is quite unlike the traditional "product-driven" marketing, which starts with a product and tried to find as many customers for that product as possible by flooding the mass media with information.
Today, customer databases permit couples to single out a customer or type of customer and to do something special in return — to customize the product or service in a way that will gain customer loyalty, to offer the customer something available nowhere else. "People are starved for time today," Rogers says. "Imagine how well a retailer would do if it anticipated regular purchases of housewares products and giftware."
Housewares retailers need to focus their relationship with the consumer, Rogers says. The most successful housewares retailers of the future will see the "store" as where the customers are — not just physically but mentally as well. "Customer expertise provides the true long-term competitive advantage," Rogers maintains. "Which is better?" she asks. "Selling another can opener, or selling a customer all the can openers she ever buys — and the spatulas, glasses, spoons, knives?"
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| Differentiating Your Most Valuable Customers |
 Because mass marketing has become so fragmented and costs so much today, one-to-one marketing can be done both more efficiently and cost-effectively — especially if the retailer is able to differentiate its customers and target its message to the most valuable ones. "In a nutshell, you treat different customers differently," Rogers says.
Just as customers have different needs from a retailers, they also present different values to the retailer. Rogers cites the long-recognized principle that 20% of your customers give you 80% of your business. Thus it becomes essential for a retailer first to identify its most valuable customers and keep them, and second to grow those customers that have the potential to be valuable. "Give these customers what they need, not necessarily what you sell," says Rogers. "Be prepared to reward your best customers."
Ira Kalish, director of global retail intelligence at PricewaterhouseCoopers, points to the growth in customer loyalty and reward strategies. "Sears department stores have found that 90% of their profits come from 10% of their shoppers, so of course it makes sense to satisfy the needs of those customers." At such firms as Tesco, a food retailer in the United Kingdom, "a large share of sales come from loyalty programs. You market directly to those loyal customers and keep them from shopping with your competitors," Kalish says. "Catalog and Internet retailers do a lot to directly go after their frequent customers, now other retailers are following suit."
Responding to input is essential, says Rogers, when it comes to keeping customers. "Find out what your best customers want and give it to them," she urges. A housewares retailer can customize its products, its services, or its terms for the customer. The important thing is to meet the customer's needs and to tailor offerings one-to-one.
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