Big Bet On Customer Loyalty

Companies use real-time information to identify and keep their best customers

Tony Kontzer, Contributor

February 6, 2004

4 Min Read

Harrah's recent $100 million-plus investment in printers plays a big role in the effort. The printers will be placed at gaming machines and will replace coin distributions with printed tickets bearing the total amount owed to winning customers. Stanley also plans to use the printers to automate the distribution of rewards vouchers for food buffets or shows to its card-carrying loyal customers. What all these efforts amount to, Stanley says, is the transition from analytical customer-relationship management, where customer data is analyzed and acted upon at a later time, to operational CRM, where action is taken on data as it's being collected.

Even traditional retail systems such as inventory management can be tweaked to be instantly responsive to customers. The Beer Store, a 437-store cooperative that sells more than 80% of the beer consumed in the alcohol-regulated province of Ontario, Canada, has only one competitor: The Liquor Control Board of Ontario. The Beer Store's revenue is based solely on distribution fees it collects from brewers, who set the prices and collect the sales revenue. Despite the lack of competition, the Beer Store invested in technologies that are helping to satisfy customers.

The co-op is getting ready to go live with a five-store test of point-of-sale systems from Triversity Inc. that work with inventory-management software from Yantra Corp. This will let the company constantly update its inventory with each sale, while also being able to tap the latest inventory data even as customers are checking out at store registers. While the system is intended to make the flow of inventory more efficient, its features also will result in improved real-time customer service, says Glenn Wood, director of information services.

The system includes business rules that in some instances give customers the best deal at the cash register. A customer may come to a store for a 24-can case of a certain brand of beer, for example, and find that the store is out of cases. So the customer grabs two 12 packs of the same beer, which together cost a bit more than a case. The point-of-sale system would know that inventory was depleted on cases of that brand of beer and automatically reprice the two 12 packs to the lower cost of the case. Wood also plans to invest in mobile devices that roving checkers will use to check out customers waiting in long lines.

Even for the smallest businesses, real-time technologies are helping provide market differentiation. Distant Replays, a single-store retailer that specializes in retro sports paraphernalia such as classic New England Patriots garb or old Dr. J shirts, uses real-time customer service on its Web site to set it apart in the vintage apparel market.

The site has been using Web-analysis software from Proficient Systems Inc. for the past two years to come to the aid of browsing customers who appear in need of assistance. Based on business rules written by VP and co-founder Tanya Hyman that evaluate things such as how long a customer has been on the site, the software alerts staff in Distant Replays' fulfillment center to initiate a real-time chat and address any questions or problems a customer may have. Not only do customers appreciate such personal attention--"If someone comes into our store, you'd never ignore them," Hyman says--but the software also allows the company to reallocate customer-service reps from the phone to the Web site. "If the phones aren't ringing in our fulfillment center, it's a way to put those resources to work," she says.

In November, Hyman upgraded the site to better integrate with the store's point-of-sale system to provide real-time inventory information. Now, in addition to sharing its product expertise, the fulfillment staff can steer customers away from out-of-stock items.

In trying to survive in the highly competitive online retail industry, Hyman's theory is that a superior customer experience will win out. And if you can communicate in real time with a customer, as an in-store salesperson can, that's all the better. "When you're talking about a $350 to $400 jersey, people usually don't drop their money right there," she says. "They have to be romanced a bit. It's an emotional decision."

The potential to tap into customers' emotions could be where real-time technologies can make the most difference, because when it comes to turning emotion into a purchasing decision, there's no time like the present.

Photo by Charlotte Observer/AP

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