It’s Not Only Whether You Win or Lose, it’s How You Use, and Protect, Customer Data
It seems like every day I read about another major retailer going out of business. Let’s look at how your retail enterprise can use customer data to avoid crashing and burning like so many others already have.
For retailers to survive and thrive in the digital age, it’s necessary to become customer concierges. This means knowing each individual customer’s tastes, preferences, and needs, sometimes before even they do, and always being there at the moment they’re ready to buy.
To illustrate this, let’s examine Toys R Us and The Entertainer, two large toy retailers. The once-successful Toys R Us chain recently went bankrupt and now faces liquidation after many years of success, whereas The Entertainer continues to grow. The reason is because Toys R Us stuck with an antiquated business model and tried to compete with lower prices. Meanwhile, The Entertainer monetized customer data by using it to provide actionable insights to create a more valuable experience than its competitors.
Likewise, there’s the comparison between Blockbuster and Netflix: Blockbuster relied on stale and somewhat dodgy business practices that ignored customer demands while Netflix built its business around understanding its customers and giving them what they want. Now, the concept of the video rental store itself has gone the way of the phone booth, while Netflix continues to dominate the streaming rental market it created. To add insult to injury, Blockbuster once had a chance to buy Netflix back in the day when it was relatively inexpensive to do so, but it passed on the opportunity. Ouch.
What it means to be a customer concierge in the age of digital retail
Customers buy products to solve their problems. Being the best at solving customers’ problems is how retailers will survive and thrive in the data-driven marketplace. It’s about using customer data in a way that supports deepening relationships between your customers and your brand. This leads to strong customer loyalty where your brand becomes seamlessly integrated with their day-to-day lives.
One example of this is how The Entertainer uses app and social marketing strategies to communicate with customers and to track their consumer behavior. As a result, its customers receive special discounts based on what they’ve bought before and what products and services they’ve recently searched for. For instance, if a customer recently purchased a toy for children ages 4 to 6 at one of their stores, then that customer might receive discounts for similar toys and perhaps peripherally-related products such as pre-reading books to help them prepare their children for kindergarten.
Another example of being a customer concierge is how Amazon allows you to do all your shopping from your home, without needing to get up. It creates shopping lists for you and applies discounts to your items automatically as well, often resulting in better deals than what you could get at local stores. You can also integrate smart home technology with Amazon’s delivery service, so your smart fridge knows you need milk before you do and orders it so that it shows up the day your old milk goes bad.
The importance of protecting customer data
Merely collecting and analyzing customer data aren’t the only things retailers have to do to be successful. They also need to protect that data from various threats. Wealth is power, and information is power. Thus, the wealth of information is exponentially powerful, and with this great power comes, you guessed it, great responsibility. This is true for a few reasons:
- Customer trust – The most important reason to be especially protective about customer data is that it belongs to your customers. It’s who they are and what they are, and you have it because they trust you. Once that trust is gone, whether it was your fault or not, it’s gone forever. Facebook chose not to take protecting data very seriously and now its brand is suffering as a result. Its experience will likely lead to enhanced regulations for how businesses manage and protect customer data as well.
- Legislation like GDPR and others – Governments around the world have placed the responsibility for protecting customer data squarely on the shoulders of the organizations that collect it. Failure to comply with regulatory demands will lead to stiff penalties that will affect your bottom line and ultimately undermine your ability to remain competitive.
- Hackers – Whether they’re competitors, sophisticated trolls, or antisocial nerds, hackers are here to stay, and their techniques are evolving just as quickly as the market itself. They’ll steal your customers’ data so fast you’ll WannaCry, and they’re dangerous.
Monetizing customer data means using it to achieve a complete view of your customers in terms of who they are and what they want and need on an ongoing basis. You can do this by becoming a customer concierge to build customer loyalty to the point where your brand becomes an everyday part of their lives. You must protect your customer’s data, however, or else all your efforts could be wasted.
Want to collect and monetize customer data without exposing your brand to the dangers of doing so? Check out this white paper by Protegrity on how customer-centric retailers win with customer data.
Our guest blogger, Travis Wright, is a top marketing technologist, author, keynote speaker, blockchain advisor, tech journalist, and podcast host. He is the former global digital and social strategist at Symantec for the Norton brand. Wright is the cofounder & CMO of CCP.Digital, a Kansas City & SF-based digital ad & content agency.
Wright is the author of Wiley & Sons, “Digital Sense, The Common Sense Approach to Social Business Strategy, Marketing Technologies, Customer Experience and Emerging Technologies”, which published in January 2017. Wright also cohosts one of the top-ranked blockchain podcasts, The Bad Crypto Podcast, with Joel Comm. And he co-hosts Venture Beat’s podcast, VB Engage, with Stewart Rogers.
*** This is a Security Bloggers Network syndicated blog from Blog – Protegrity authored by Travis Wright. Read the original post at: http://www.protegrity.com/its-not-only-whether-you-win-or-lose-its-how-you-use-and-protect-customer-data/