Know Your Customer 2: | İnnova
Know Your Customer 2: 13October

Know Your Customer 2:

In the first part of this blog entry we talked about personalised customer experience and the advantages of offering customised deals. Unfortunately, there are also risks. The main one being the possibility of arousing suspicion that you are violating your customer’s privacy.

 

After years of analysing what products its customers were buying using traditional methods, an American retailer decided to send notifications offering deals on baby products to women that it had determined might have been pregnant. The result was not positive, since many of the customers found the message disturbing, and the retail chain was taken to court accused of collecting unauthorised private data, using it for commercial reasons and violating privacy.

 

To avoid negative outcomes and, in the worst-case scenario, even legal consequences, it is important to convince your customers to share their data voluntarily and authorise its use in person. The easiest way to do this is to ask them to sign an end-user agreement and privacy statement while registering with your system.

 

But sometimes even this isn’t enough, for two reasons. Firstly, some customers may not accept the conditions at the outset. Secondly, you may not be able to obtain all the information you need from the beginning, or customers may decide not to share information about their shopping habits that would help you to become better informed through time. At this point it is necessary to move beyond traditional methods and convince your customers to share the data you need willingly and voluntarily. But how?

  • When a customer is at the checkout, a cashier can suggest, “if you’d like to leave your email address we can make sure you are the first to know about our special offers”.
  • You can send quick surveys to your customer’s mobile phones (For example: Are you planning a beach holiday this summer?) adding that if they reply they will receive ten extra reward points.
  • When your customer is trying on clothes your sales clerk could ask “what is your favourite colour?” and then enter this information on the iPad they are carrying before bringing accessories in that colour.

 

There is also the issue of habits that are learnt over a long period, although this is not as problematic as requesting direct information from customers. Customers already know that you can find information like shopping frequency, average spend, preferred products and so forth, and therefore react less sensitively to these particular privacy implications which, without disappearing entirely, are more manageable.

 

Is any of this rocket science?

 

No. You don’t need a million-dollar investment or technology capable of splitting the atom in order to offer customised deals and a personalised experience. You can start with a simple plastic card and database solution, and progress by finding the optimal point between your needs and investments aimed at a broader range of solutions. Of course the returns you receive will always be directly proportional to your investment and the technology used. Let’s look at a few examples:

  • Identifying customer location with Bluetooth beacon devices, wireless networks and UHF/RFID cards with micro-location technologies with a sensitivity of 30 to 40 cm.
  • Using mobile application interactions to send instant notifications about special deals and offers to your customers’ phones.
  • Creating statistical data of customer habits with business intelligence and data analysis solutions, and planning your next move using predesigned workflows.
  • Using complex event processing solutions and dynamic workflows to respond to changing circumstances, with the ability to produce alternative suggestions to offer to your customers in real time.

 

By using the solutions described above or similar ones in conjunction, it is possible to remain one step ahead of your customers and make proactive offers even before they tell you what they want (and perhaps even before they even realise what they want!)

 

Also you don’t have to decide from day one. You can start with a modest solution, and then build on the technology that you already have and add new elements over time. Here the key point to plan for is to identify how much data you need to use in order to analyse customer behaviour and habits and how soon you will need it. In order to deliver a personalised experience, it is critical that you have sufficient data and the ability to analyse it accurately. The solution for collecting and analysing data is required from day one, whether you are planning to rely on customer sourced data or system based data.

 

Another point to keep in mind is the need to research whether the technology and the customer communication channel you are using is functioning as you would expect. For example, if you are planning to use a mobile application and BLE (Bluetooth Low Energy) beacon device, this would only work if your customers have already downloaded your application, are physically in or near your store and have Bluetooth activated on their phones. Similarly, when using an RFID card solution, it is not possible to offer a personalised experience to someone who has left their card at home unless she can introduce herself using another method.

 

Thus the size of your investment is not the only thing to consider. Cultural tendencies and the habits displayed by users in particular geographical locations, as well as the circumstances in which you want to use your solution should also guide your decisions.

 

Conclusion

 

Personalised customer experience and customised special offers are a quick and simple solution that is immediately available and capable of increasing revenue. It is an investment that should be prioritised particularly by businesses in the retail, food and beverage, and service sectors because of its ability to directly affect revenue, increase customer loyalty and help to gain valuable marketing data. It is also worth considering that these solutions, along with Internet of Things solutions, will provide even greater added value in the future.