Your Business Is Irrelevant And IT Wants To Help

Written by Todd L. Michaud
March 25th, 2010

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

About 98 percent of all retailers are irrelevant. In my world, it’s about restaurants. And in today’s over-marketed hyper-competitive environment, it all comes down to the “moment of truth”–when the thought “I’m hungry, where should I go to lunch?” enters a consumer’s mind. If your brand is not relevant at that very instant, then you will not get the sale.

The consumer will satisfy her craving someplace else. What boggles my mind is why more retailers aren’t using technology to help them win this battle of mindshare.

Long before the term customer relationship management was bastardized to secretly mean salesforce automation, many companies had the vision of an IT system that would help them manage and maximize the relationship they have with their customers. The idea of being relevant is a complex equation that means a lot of different things to a lot of different people. Because no one really knows the secret formula to being relevant, my goal as an IT leader is to create systems that will help my business partners answer questions they don’t yet know to ask.

There are three major components to building an effective strategy for managing your relevance with your customers: Customer Profiles, Business Intelligence, and Marketing Data. Each of these components is directly supported by technology and, when combined, they can create a system that is much greater than the sum of its parts.

The concept is quite simple:

  1. Figure out what your customers need and/or want.
  2. Figure out what your business needs.
  3. Figure out the best methods that achieve both 1 and 2.

First you have to know a little something about your consumers themselves. It might be something as simple as a gift-card number or as detailed as a full demographic/psychographic breakout. Some brands believe they must have a full customer profile, while others may gather only an e-mail address as their customer profile. Although I think it is safe to say that “more is better,” I still believe that even a single piece of identifying information is useful enough to use.

Next you have to understand your business. You have to know what the important triggers are for your business. For example, is obtaining a new customer more valuable than getting a “light” customer to visit you more often? What market basket represents the most profitable transaction? What is the impact of geography on your business? What are the competitive pressures?

Then you need to be fully aware of your marketing efforts. What promotions have worked well? Which communication vehicles have shown the greatest ROI? What combination of brand marketing and local store marketing produces the greatest results?

The key is to bring this information together in a meaningful way that can help you drive the business. Many companies have a business intelligence system that tells them about their product mix, same-store sales and customer counts. Fewer have a database of consumers that represents a history of their engagement with the brand (both online and in the store). Fewer still have a database repository for tracking all their marketing efforts in a concise way. A very, very small number of chains actually use all three sets of data to deliver value to the brand.


2 Comments | Read Your Business Is Irrelevant And IT Wants To Help

  1. George Eberstadt Says:

    One way to increase the chance that a buyer thinks of your brand in that brief in-market moment is to build a connection in the buyer’s mind between your brand and the buyer’s friends. In other words — any chance you get, point out to a customer which of their friends shop your brand, and when that customer is ready to buy, they’ll think of you first. You’re already trying to associate your brand with other things that motivate the buyer; beauty, health, a good time, efficiency… “Your friends buy this brand” may be the most powerful association you can create of all.

  2. Brian Hayashi Says:

    I am a big fan of social media and have spent a lot of time walking storefronts and brands in an effort to bring them, kicking and screaming, into the 20th century.

    Just kidding.

    Many initiatives you describe seem relatively straightforward, but as always, the devil is in the details.

    For example, how do you define “light” users on Twitter? Do you eliminate people that are “obviously” spammy? Do you include people that have just started? And which Twitter account are you talking about – the corporate account, or the accounts for individual locations? The answers to these questions are significant, echoing hygiene and maintenance issues that have bedeviled smaller organizations for years.

    The challenge isn’t tweeting a deal – the challenge is how to use the technology so it works in a sustainable fashion. Many of us senior managers started working when email was still new. Instead of fulfilling the promise of “less effort than normal correspondence”, instead it has become a drudgery that occupies hours of time on an ongoing basis.

    Do we want to repeat this same type of workload for every social media platform we adopt? For many organizations, the answer is clearly ‘no’. The benefits are clearly there – but it is up to corporate intrapreneurs to do a better job of demonstrating how this unfolds.

    (BTW, so you know I’m not just a dour curmudgeon, I’ve been helping Altimeter strategist Jeremiah Owyang manage a list of corporate social media strategists.)


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