Customer loyalty is the holy grail for retailers, consumer product companies (CPG), airlines, credit cards, media, and so on and so on. Companies across the majority of industries are striving to understand why their consumers are willing to hand over their hard earned income for goods and services. Why or will these consumers continue to purchase from the same source? And how can these companies keep these customers coming back and hopefully spending more and more.
Companies have created and leveraged many creative means to gather and nurture information from their customers – whether it be loyalty cards you have at CVS or Shaws
grocery store or Vineyard Vines or Barnes & Nobles or Starbucks. These vendors know that for the most part they need to give you something for you to give over some information – usually they give you discounts, early views of new product lines, reward points etc. Airlines, of course, were one of the first movers to give you what was a highly sought after reward for your business – miles and status. Hotel chains were quick to follow. Anyone who spends time on the road, knows how vital is it to have “status” on an airline. While it still doesn’t beat flying private…so I have been told…having that status can usually make the drag of travel a little more tolerable.
All this information has added fuel to these supply chains – an insight into the most profitable client and demand. A view into a data source that can potentially drive the most profitable and desirable side of the supply chain. But are our supply chains getting a less than complete picture of what is really happening?
Looking at our consumers’ buying patterns for just our products is far from a complete picture. Grocery chains and drug stores are very aware of this. They work with vendors like IRI, Neilson, Orchestro or RSi to get a more complete view of the consumer basket. These software vendors will aggregate data across a category or across an entire store or region. This allows a more complete view of what is truly happening. But is that enough? No. Not if our supply chains want to be even more finely tuned when it comes to servicing our clients.
The reality is that our supply chains are no linear and they do not exist in a vacuum. They are all intertwined. The way to make sure our customers stays loyal to our supply chains is to understand how the interact with all the supply chains that are connected. This type of visibility cannot occur if we are only looking at that data that comes in from the loyalty program specific to my business. I need to understand how that customer interacts with tangential goods, potential substitute goods, services and even items that might not appear to be in the same cohort.
Companies need to step away from the loyalty card table…okay they still need to take in and leverage that information. But the data that needs to be added to the supply chain is information of how consumers behave when they are not giving you their information – meaning when they are doing other things with their time and money. Credit card companies have a leg up on this, they already have all that data. Smart supply chains will find ways to get access to that information. Just think about how much wiser your supply chain could be with true demand.