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Friday, February 23, 2007

Friday, February 23, 2007

Selling products and services through multiple channels offers a number of "touch-points" where information can be gathered from existing or potential customers. Most marketing professionals understand the importance of using this information to personalize communications with customers, or perhaps even to customize products and offerings for them.

But the challenge marketers and retailers continually face is how to successfully glean valuable information without pestering their customers.

So how can a retailer navigate past the possibility of a negative reaction? As a technique, conversational marketing is a proxy for an actual discussion about what customers want and what you can offer to meet their needs. To get there, retailers must know just enough about their customers to make suggestions about what else they might like while not crossing a personal line where the interaction becomes uncomfortable for the shopper.

Conversational marketing is the ability to take what the customer says, remember that information, and then give it back to the customer in a way that the customer finds meaningful and is then likely to respond. Conversational marketing requires a customer database and the ability to access this database across all communication channels. To monitor the success of conversational marketing programs, marketers must be able to access customer information across sales channels in order to get a complete view of the potential buyer before executing marketing programs.

Conversational marketing can facilitate personalization. Personalization is the ability to use unique customer information to communicate with the customer. Whereas personalization most often occurs in the communications channels, the art of customization has an added twist, as it is a product-based activity. Customization also requires a database of customer information usually collected directly from customers during the sales process. But there is the added step of taking the information at hand and creating an entirely new product. Brooks Brothers tailor makes suits. American Girl does it with dolls. Lands End does it with clothes. These are all examples of retailers listening to customer desires and examining customer data.

But before a retailer can even consider establishing healthy and productive personal communications with customers, several issues must be addressed. Customer analysis is the first step before building personalization and customization programs. A retailer needs to determine if the customer base can be segmented in such a way as to make personalization and customization viable strategies for the company. One-to-one personalization may not be cost-effective for many companies who may choose to use traditional targeting and segmentation techniques to create personalized communications and offers for groups or segments of customers.

The second requirement is adequate customer data. Without data that can be accessed across channels, customers cannot be analyzed and segmented according to recency, frequency and monetary value or other characteristics for future offers. In a 2003 study of 209 firms, Zahay and Griffin found that customization requires sales-oriented and specific customer information while personalization requires specific marketing information such as responses to particular marketing offers and the ability to share information throughout the firm.

In some cases, a little imagination and hustle can fix a lack of adequate customer data. But in many cases, the problem is data segregation. Data obtained from different channels gets stored in different “silos,” or databases, with no ability to integrate or access data across the channels.

These days, that can be fixed through smart software solutions. For example, it is now possible for enterprise software systems to use a common set of data across channels within a single data schema. This type of technology is used to share data across other systems and replicate it throughout the company when changes are made in one place. This type of data porting system makes it possible to acknowledge customer information regardless of the interaction mechanism.

In addition to advanced marketing, shared data collection and integration are also integral to excellent customer service. For instance, the customer buys something online, tries it and finds that it doesn’t quite fit the need. Instead of boxing it for a return, the shopper brings it to the local mall for an exchange. That particular store does not have the replacement item but the clerk can have it shipped directly to the customer from another store.

Conversational marketing can create possibilities for up-selling and cross-selling, maximized revenues and profits and loyal customers. That’s why all aspects of an organization must be involved in personalization and customization as viable business strategy choices.

When done correctly, conversational marketing and personalization make customers feel special. People want to feel appreciated. And by providing these services, they will start having conversations about you.

By Brian Carpizo is the CEO of Junction Solutions. The company offers retailers advanced software based on the latest Microsoft platform technology to effectively operate catalog, point of sale and e-commerce customer channels as an integrated enterprise.


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