2007/01/03

Grocery Store e-CRM Philosophy (Part 1)

The alley where I live has a longstanding grocery store selling simple items such as food, drinks, and cigarettes. I visit the store about twice a week, buying a pack of cigarettes or beverages, but I encounter the owner infrequently and rarely make small talk.

After awhile, the owner grew accustomed to the brand of cigarettes I smoke. Every time I want to purchase a pack, he hands it to me before I even open my mouth. He also knows I'm married with two sons and where I live. Every time my wife or kids need to buy rice or fruits, the owner delivers them to our house without a word from us.

A similar situation developed with the owner of the bar 'n grill that my college buddies and I used to visit. The brewery next to the office is the same experience. The owner must not only know frequent customers, but also satisfy their needs to build trust and familiarity. This can increase return visits and actual revenue. Every e-business has wrestled with how to simulate real-life situations in the virtual online world in understanding customers, offering different services and information, and increasing revenue.

In a hypercompetitive environment, many small-scale stores running under an eBay-like operating method must utilize distinct services to please customers, fulfilling new or yet to be satisfied needs. To promote their financial products, numerous banks, insurance agencies, and credit card companies on the market spend tremendous efforts in producing web pages that can effectively draw customers closer to the website. These websites undergo constant upgrade and redesign. Recently, the Korean government has devoted itself to website design and higher efficiency, providing the public with multi-faceted services and information.

Offline business has a long history with and a deep understanding of customers. It involves segmenting customers based on operating targets, maintaining long-term customer relationships, and creating various strategies and tools for highly efficient business campaigns. We usually refer to this process as CRM (Customer Relationship Management). The strategic analysis for enhancing operating performance is called BI (Business Intelligence).

In reality, applying this process on the Internet Network is difficult. Past e-businesses believed website product placement, information transfer, and service provision are the most important factors. Now, they must continuously search for advantageous strategies to remain competitive against e-businesses within the same industry or mergers. Now, a good product or idea can help launch a website, attracting many enterprising individuals.

Actually, there have been countless examples of websites that fail due to unsound planning. We can see that it is imperative to create individual style to enhance competitiveness. Like offline marketing, online marketing requires a comprehensive knowledge of customers. The difference is that in online business, where visitors are anonymous, a complete marketing plan must be established.

In online business operations, to provide the best services and marketing campaign information, the key is member data and customer transaction records. Although transaction data is based on actual events, grasping customer behavior solely on purchasing information is insufficient. The reliability of member data is not significant. The main goal is to grasp the behavior of all anonymous visitors. This difficult task requires a deep understanding of customer behavior, tracking website visitors to learn their tendencies and needs. Tracking analysis of customer behavior can be presented in static reports for easy comprehension. To know whether or not the current task is meeting the standards for operating efficiency, constant testing is necessary.

In the online environment, initial web log analysis of online business merely focused on the improvement of the operating system. Now, web analytics has expanded to include customer needs and web business goals. Comprising of various reputable, visionary American companies, Web Analytics Association (WAA,
www.webanalyticsassociation.org) defines web analytics as such:

"The measurement, collection, analysis, and reporting of Internet data for the purpose of understanding and optimizing Web usage"

Although it also provides a detailed definition of the reasons and contents for web log analysis, we believe they are ever-changing. The definition of web analytics should constantly evolve. Visitors of an Internet business environment are not facing other people but rather a set system. However, based on customer interaction on website infrastructure such as café, blog, community site, or online bookseller, Internet business receives periodic visits and browsing for information and purchasing actions.

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