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When Choosing Customer VIPs, Is It Time To Ignore Purchase History And Focus On Social-Media Clout?

August 17th, 2011

An awful lot of data exists in those bullets that is simply not easily accessed today by retailers. But even if all of those data points were suddenly made available tonight, there is a shameful lack of mechanisms to make them useful to associates.

For this to work, associates need to have a way to identify these influencers as they approach and to be able to understand the type of influencer each is. (Arguably, the simple directive “This person is really important. Go into full boot-lick mode” would probably do a lot of good on its own, but as long as we’re dreaming up a retail nirvana, let’s do better.)

As for the identification of these influencers, that could be done directly or indirectly. A few years ago, Home Depot experimented with a special RFID-equipped loyalty card that was only given to the very top customers of the stores involved in the trial. The customers knew they were given a special card for discounts and other goodies, but they were not told about the RFID chip—a chip that was identified every time they entered the store. Once they were inside, a bulletin was blasted to all associates that this particular customer had just entered Door #2 and was then near Aisle 7. A short summary of the highlights of his/her purchase history was then displayed.

The ultimate in sneaky, though, would be to use security cameras leveraging facial recognition. (A Carnegie-Mellon University study this month proved that it could work and work quite well.)

There’s also the Las Vegas approach, in the “What Happens Online Stays Online” sense. Should this influencer ranking entitle the visitor to special E-Commerce treatment? Differentiated pricing? Higher level instant-chat help? Real-time page tracking and assistance?

What about call centers? Can caller-ID make the backend of this system the easiest yet? No hold for high-influencers? Automatic authorization for refunds, free shipping or anything else, without supervisor permission?

John Bastone, a customer intelligence global product marketing manager for SAS, has been arguing for this type of an influence index for some time and suggests that it’s little more than a programmable equivalent of what retailers have been doing for decades.

“We’ve all long known that word-of-mouth recommendations have a lot more clout in influencing purchase decisions than any kind of marketing message,” Bastone said. “All we’re trying to [do is add to] what we already intuitively know as marketers.”

There’s a very cold-hearted—but realistic—way to look at this. It’s a fact that all major retailers are going to screw up customer interactions from time to time. One key benefit of an influencer VIP system is to increase the chances that the screwed customers are not the ones with two million Twitter consumer followers.

The very idea in retail—and other verticals—of VIP customers has been tweaked in recent years as more sophisticated analytical systems quickly replaced the highest revenue customers with the most-profitable customers. Wal-Mart, for example, is the highest revenue distributor for a huge number of consumer good manufacturers. But with Bentonville’s legendary and well-earned reputation as a ruthless negotiator, the Wal-Mart-related profits are not nearly as glorious.

Banks have discovered that the customers who have the largest deposit amounts demand the most service, attention and perks, whereas much lower income customers expect little, accept long waiting times and pay tons of check charges, interest, penalties and ATM fees.


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