What Does It Mean to be “Relevant” to a Customer?

The British retailer John Lewis is trying to deliver a more relevant in-store customer experience by equipping sales personnel with tablet devices that can mimic the online experience. According to Retail Week, “Store staff will use the tablets to help shoppers decide what to buy, and their data trail will be collected in the same way as it is when shoppers buy online.” And a recent article in Fast Company reviews the even more sophisticated technology that Ebay is now testing for the fashion brand Rebecca Minkoff - again, in an effort to make the physical customer experience nearly as relevant and personalized as the online experience.

These examples illustrate how difficult it will be for brick-and-mortar firms to deliver an in-store customer experience that is truly relevant and individualized. But relevance will be critical for their long-term survival, so they work hard at it.

Other firms don't seem to work at it at all. Here's a copy of an email message that a colleague of mine received recently from Marriott Rewards, with a message that is hilariously irrelevant.

With this email message, Marriott might as well say "We don't have a clue who you are but we really don't give a s**t anyway!"

For most businesses, the very best kind of customer experience is one that is frictionless, which means it has four qualities: reliability, relevance, value and trustability. And in my last post I suggested that we could think of reliability as a kind of “product competence.”

In this post I’m going to consider what makes a customer experience relevant, and I’ll suggest that relevance can be thought of as a kind of “customer competence.” To deliver a relevant customer experience, your company must be competent enough, in terms of processes, data, and systems, to treat different customers differently, and to treat each one appropriately for what you know about them, or what you ought to know.

The first requirement for delivering any kind of relevance, of course, is analytics. No matter what our business is, we all know that our customers are not identical. In my experience, however, business managers often don’t appreciate just how different they are from one another.

At the most basic level of marketing, customers are different in terms of their value to a business. Some customers are clearly worth more than others, aren’t they? And most companies focus the majority of their customer-differentiation efforts simply on understanding different customers’ different values – who are the most valuable customers, the most growable ones, the below-zero ones, and so forth.

A customer’s value profile will be important in setting different financial objectives for different customers. Your objective for some types of customers will be simply to retain them longer, while for others a more important objective might be to grow them into bigger customers by cross-selling or up-selling. For still other customers your primary objective will be to reduce your cost-to-serve, perhaps by increasing the level of automation. But whatever your business objective is with a particular customer, you can only reach that objective by understanding what actually motivates that customer to act.

So value-differentiation is only half the battle, because in order to entice a customer to behave differently in any way (i.e., to buy more, or to stay longer, etc.) you must appeal to that individual customer’s needs. As complex a task as it is to rank your customers by value, at least value can be denominated in dollars and cents, or pounds and pence. But there's no single metric for customer needs. There are as many different categories and dimensions of customer needs as there are analysts trying to catalog them.

The point is that being “customer competent” involves a lot more than simply tracking a customer’s buying volume and frequency. It requires mixing the science of analytics with the art and wisdom of human judgment. So delivering a truly relevant experience to an individual customer is no walk in the park. Moreover, because the online customer experience can often be highly relevant, the contrast with a less relevant brick-and-mortar experience can be stark, which is one reason that forward-thinking retailers like John Lewis and eBay are trying to master the task.

Clearly, being relevant to an individual customer is on the bleeding edge of delivering a more frictionless experience. But you don’t necessarily have to be inventing new technologies. You can also become more relevant to your customers simply by applying existing technologies in a more customer-friendly way.

In just the last few days, for instance, I had two different domestic flights canceled by bad weather, on two different airlines. Both airlines called my mobile phone with an automated message advising me of the cancellation. The first airline advised me of the cancellation and instructed me to call a toll-free number to rebook myself. The second one advised me of the cancellation and told me I had already been rebooked on a slightly later flight, giving me the flight details and record locator number, and advising me that if I wasn’t happy with the new flight I could go online or call to change it.

It should be obvious which cancellation notification was more relevant to me, and created a more frictionless experience.