The First Commandment of Selling - Know Thy Customer

Anyone who operates in the food chain is regularly told that we need to understand the consumer. Now, propelled by low growth markets, and the rise of technologies which allow personalised consumer contact, the race to lead the way in consumer understanding is becoming increasingly intense.

The consumer as ever holds the key to business success or failure. When, as now, markets are flat, the only way to grow sales is by stealing market share, and the only way to steal market share is to satisfy customers better than the competition.

It is easy to drift away from understanding what it is about a business that makes it appealing. ASDA forgot that its customers went to them because of lower prices, sprang into action by promising that they would be 10% cheaper than anyone else, and have started to recover market share. More controversially, Morrisons who are facing some growth difficulties have been lambasted by its founder Sir Ken Morrison for going too upmarket and forgetting the needs of core customers.
Whilst those two examples are about broad strategy, it is clear that “know thy customer” marketing activity is getting much more precise, and technology allows this to happen.

No longer is it enough to track an individual’s web viewing through “cookies” and flash up a message on the computer screen, or to send a general email to customers announcing events like a sale or special promotion. Now retailers are striving to send tailored communications which closely reflect the interests and previous spending patterns of their customers.

Thus we see Tesco’s Philip Clarke in a speech entitled “Follow the customer or die” a couple of days ago saying they would be using Clubcard, held by some 18million people, to categorise their shoppers into age, number of children, and  wealth categories based on recent purchases. The information is then tailored to suggest to online shoppers what they should buy. The action follows from Tesco’s recent decision to categorise their stores according to neighbourhood, changing the range of goods stocked to match the spending power of the people who shop there.

It is this pursuit of ways to tailor messages to consumers which led to Facebook commanding what some might call a ludicrously high price when it floated on the stock market. Enthusiasts reckoned  that with 100’s of millions of members most of whom used their Face book page every day there had to be a way of translating this vast consumer contact into hard dollars. Of course the practicalities are leading to some having second thoughts now.

So as we are bombarded with messages at every turn, on our computer screens, smartphones, or even in the post, the key issue for any seller is how to balance giving consumers genuine and welcome information versus an unsolicited and irritating intrusion into their everyday lives and personal affairs. There is already some evidence of a backlash and it is likely to grow.