THE MORNING BUZZ: Doing Business In the Information Age15 Jan, 2002 By: Holly J. Wagner
There's a reason they call this the Information Age.
Information is transmittable in myriad forms. We're used to acknowledging billboards, logos, magazines, newspapers, radio and television. But information is also transmitted in other forms -- genes, for example, and digital information packets almost as small that give rise to nanotechnology that might ultimately yield cell-sized artificial life.
But that's too awesome to think about so let's go back to the middle band, small but not miniscule data packets with large implications. Little packets like this can carry most of your life. They can protect you or snitch you off to telemarketers, insurers and worse.
And they are very profitable.
The difference between a dot-com and a dot-bomb is information. Most of the companies that are making any money at all on the Internet are not in the business they appear to be in as much as the information business. They gather customer information and sell their data (albeit usually with personal identifiers blacked out) to marketing agencies and research firms. It's a major privacy issue in the cyberworld.
It goes to the success of chain businesses, from Wal-Mart to Blockbuster.
Part of the edge these companies have is the exposure and resources to gather this customer data.
It seems clear that Blockbuster's recent foray into online rental provided marginal results, or the chain would have continued it. But maybe that's because Blockbuster found out it already had the same information on its customers from its standard membership forms and improvements to easily tabulated form of rental data, via online reservations, were not forthcoming. Perhaps cyberspace didn't give Blockbuster anything it didn't already have.
That's a contrast to many other large retailers and most smaller ones.
Blockbuster has been testing a variety of ideas lately, from VHS selloff stores to online ventures to letting ancillary businesses like Radio Shack and an audio book vendor lease space. Testing new products and services is good business practice.
But also remember this: When any business puts money into a test on the scale of an online reservations system and then backs out, rest assured the test was probably not a financial success. And conversely, as the dot-bombs thin out and dot-coms get more solid, any online business that survives even if it looks like it's not making money is selling something other than the advertised product or service. It's selling information. Yours and mine.
As much as we hate that, there are lots of more palatable ways that businesses -- including small rentailers -- can use customer information. The behemoths have the resources to gather information on various customer strata and use that for what the marketing gurus have tagged with the oxymoron "mass customization." That means tailoring products and services to niches.
But being a mom-and-pop doesn't automatically mean you can't afford Customer Relationship Management (CRM), the high-falutin' name the gurus have for knowing what your customers want and using that to create new services and to keep them coming back. As one of the "one-to-one marketing" mavens is fond of saying, "A shoebox full of index cards can be CRM if you use it right."
All that really means is that small businesses have opportunities they are not using to gather customer data and share it within the business. One example is "loyalty" programs. Do you know who your frequent flyers are? Does your newest employee know?
Hotel chains and airlines know who their frequent customers are and they pass out lots of perks to keep them. More importantly, those businesses color code customer records so when you check in, the agent facing you knows if you travel once a year or once a week, and guess who gets better service? If a traveler has a bad experience, that information is in the records so the next person providing service can make a little extra effort the next time.
This is not to suggest that small companies have to invest in expensive programs to succeed. But I am suggesting that gathering a bit of basic customer data and sharing it with the counter force could improve business.
It's the Service thing, and you don't have to be a huge corporation to deliver it.