It has been the long cherished dream of businesses to be able to deal with individual customers directly just like the blacksmith of the pre-industrial era. Today, the convergence of telecommunication, Internet and IT technologies allows us to do this.
In order to maintain an one-on-one relationship with the customer, you need to be able to talk to all your customers spread across the country or even the world cost effectively. Today, telecommunication technologies allow you to do so. It is because of this that you find call centers of multinational companies in India providing support services to their customers worldwide. For instance, when I called the 800 number of GE in U.S., the call center was not located in my city. It could have been located in any city in the U.S. Today, if anyone calls the same 800 number, the probability is high that the call may end up in a call center in India.
Second, in order to serve the customer effectively and to retain him, it is necessary to have all the information about the past transactions and communications with the customer available to the customer service representative (CSR) online for quick decision making. Today, technology allows us this luxury.
Now the blacksmith or the local grocer kept all the above information in his hard drive, that is, in his mind. Small businesses like mine can probably do what the blacksmith did but it is not possible for large companies to do so. In order to achieve this, businesses would require to store huge amount of data which has been made cost effective by the fast changing technology. Companies are now able to collect, store, access and analyze huge amounts of data with respect to individual customers cost effectively. They can now store and analyze every transaction and communication with the individual customer irrespective of the channel of communication in real time, that is, as it happens. Today, nobody really worries about the storage costs.
For instance, auto dealers remind you when your car is due for service. Insurance companies remind you for renewal of the insurance policies. Ritz Carlton hotels keeps track of the likes and dislikes of all their guests. American Airlines gate agents get to know who their preferred customer is so as to upgrade him to first class. The salesmen of Nordstorm Stores will call you when fresh stock of your favorite brand of garments arrives in the store. The salesperson who called me after six months had stored our conversation on the computer system and as such could remember every detail of our conversation. Now all this is possible because businesses are able to electronically store, track and easily access data with respect to each of their individual prospective and existing customers with the help of technology. Modern software technology is enabling businesses to target increasingly smaller market niches. The final target - the individual.
Third, in order to effectively deal with the customers one-on-one and build a relationship with them requires businesses to understand:
(a)How each customer is different from each other?
(b)What are their likes and dislikes individually and not as a group or a market segment.
With the help of data mining tools, companies are now able to understand their individual customers better. They are now able to develop marketing strategies directed towards the individual customer keeping his likes and dislikes in mind.
Till recently, businesses targeted market segments, that is, groups of people with similar characteristics. Now they can target the individual customer as they are able to not only keep track of him individually but are also able to communicate with him one-on-one.
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