New book explains the customer intimacy challenge

If there is one hard lesson in business today, it is that knowing the customer doesn't guarantee you will win the customer. Today, we are fortunate enough to have access to the most advanced technological resources for identifying the purchasing patterns and lifestyles of our consumers. Yet for many marketers, customer intimacy continues to be an elusive goal, according to Bryan Pearson, president and CEO of LoyaltyOne and author of the forthcoming book 'The Loyalty Leap'.

Part of the reason for this may be the common misconception that "repeat business equals customer intimacy". In reality, repeat business may be the result of a variety of functions: location, price, service or product. Intimacy, however, is when a customer chooses to stay with your brand even when an equal or potentially better alternative is available.

The solution lies in your management, strategies, employees and vision. But the tool that puts these elements to work is data. But the advanced data processes that provide such rich customer insights also contribute to privacy concerns, as well as competition from other companies that also are looking for new ways to use customer information to stand apart.

No doubt, achieving customer intimacy is a big subject but, by highlighting some of the key principles, it is possible to get a good overview of what's actually needed:

1. Build emotional loyalty
   If customer intimacy is proof of commitment even in the face of competition, then loyalty, particularly emotional loyalty, is the result of knowing what your best customers love about you and building on that.

   For example, a shopper may say she is loyal to one supermarket because she stops there every week. But in reality, she may only shop there because it is on her way home from work. What if a new superstore opened nearby? Chances are she would try it, and if she preferred the prices, selection and services, she would switch brands. So long, loyalty.

   But let's say that shopper has established a relationship with her supermarket's pharmacist, who greets her by name. And she is impressed by the supermarket's mailers, which recognise her shopping habits and create added value through relevant product offers. When the bigger store opens nearby, she chooses to stay with her market. This is emotional loyalty, and to retain customer intimacy, you need to nurture this elevated level of brand commitment.
    

2. Ensure you are relevant to your customers
   Relevance represents the most powerful opportunity for companies to build long-term, profitable relationships. It occurs when a company is able to understand its best customers' core interests, assign value to them, and then connect with its customers in a way that says, "I know who you are, and I understand your needs."

   This takes knowing where the consumer is at a point in time, since location and immediate needs affect how marketing messages resonate. But it also means understanding life stages and the customer's personal interests and culture. You wouldn't send the same message to a vegetarian theatre buff as you would to a retired executive who just booked an African safari.
    

3. Use data responsibly
   Having such ground-level knowledge of your best customers requires advanced data processes, and great responsibility. When consumers share personal information with you, they are entering into a value exchange, and they rightly expect something of worth in return for the data they give you. Also, be clear with your customers about what information you are collecting, why you are collecting it and how you plan to use it. It's basic relationship building: For consumers to trust you, you need to be honest with them. Use the data you collect only as directed and as is permissible, retain it only as long as needed, and be clear about which other parties you might be sharing the information.
    
4. Make the loyalty leap
   The 'Loyalty Leap' occurs when a company redirects its focus from the product to the customer. It entails the release and sharing of customer data beyond the marketing department, to help influence everything from product development to store locations - what we call Enterprise Loyalty.

   It takes the skilful collection, analysis and segmentation of customer data, always in the context of the consumers' lifestyles, and then incorporating these insights throughout the organisation. With such comprehensive understanding of the consumer, we can develop not only the best services or products, but also the most effective ways to communicate and present them.

   Achieving customer intimacy is really just a matter of shifting one's perspective from building your business from the products out to building your business from the customer. After all, if you foster customer intimacy and emotional loyalty, your best customers will help to build your empires for you.

Pearson's book on customer intimacy, entitled 'The Loyalty Leap: Turning customer information into customer intimacy', will be published on 10th May 2012 (Penguin Portfolio, US$26.00), and can be pre-ordered online at Pearson4Loyalty.com. The book draws on Pearson's 20+ years of first-hand experience in building emotional loyalty in an information age, with insightful stories from the trenches of the data-gathering and marketing communications fields. Among the evolving trends and concepts covered:

• The four major economic forces that are converging and redefining the role of loyalty, through relevant communications that engage consumers when they want, wherever they are;
   
• The common myths behind the privacy debate and a challenge to critics who equate data-usage marketing with for-profit spying;
   
• The powerful strength of Enterprise Loyalty, and the role of front-line employees in building relevancy through the use of customer information;
   
• How to close the customer commitment gap through meaningful communications, through social media;
   
• The difference between customer intimacy and loyalty, and how to use intimacy to drive growth;
   
• Five principles for using customer data responsibly while recognizing the concerns and debate about privacy - thus enabling the loyalty leap.