The Customer Information

By John J. Sviokla, CIO |  Business

THE CUSTOMER INFORMATION PARTY IS OVER.

Customers are tired of giving up
their personal information only to have it used without their knowledge in ways that
don't offer them any benefit. Smart companies are going to start giving customers their
information back. All of it. In a format that lets customers share their information
not only with you, but with your divisions -- even your competitors.

Heresy? Try survival in the Internet economy. As the thrill and novelty of doing
business on the Web wear off, customers are beginning to chafe at the amount of
information demanded by the Web sites they visit.

The backlash has been a long time coming. The Internet is to a marketer what a CAT
scanner is to a doctor. It enables the pitchmen to examine the brain without opening
the cranium -- observing how customers act in online shopping environments, in real-
time. The dynasties of Amazon.com, Yahoo, Lands' End, Garden.com and many other
Internet companies were built on the bedrock of knowing their customers' search
patterns and desires better than their brick-and-mortar competitors did. Investors are
willing to give these upstarts hundreds or even thousands of dollars per subscriber --
adding up to billions in market capital -- because they know so much about their
customer base.

Marketers use this information to create environments that are driven by customer
demand. W.W. Grainger, for example, the $4.3 billion maintenance, repair and operating
supplies distributor based in Lake Forest, Ill., has seen its sales per order double
(from $125 to $250) since customers started buying on the Web site ( href="http://www.grainger.com">www.grainger.com). In return for the information
customers give Grainger, Grainger tailors its search tools to help them find products
easily using their particular industry's jargon. The result is happier customers who
spend more.

But will this giveaway of customer data continue? I doubt it. Customers are
beginning to realize that their information and navigation patterns and buying
preferences are valuable assets. If the capital markets are giving Yahoo $1,000 per
subscriber, customers will ask, "Why can't I take my file of my behavior and
preferences and sell it to the highest bidder?"

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question
randomness