Customer Amnesia: The Danger, the Cause and the Cure

April 07, 2017

In the movie 50 First Dates, Henry encounters Lucy in a restaurant, thinks she’s wonderful, and determines to see her again. But when he returns to the restaurant the next day, Lucy doesn’t recognize him. He learns that Lucy has a form of amnesia that causes her to wake up each morning with no recollection of what happened the day before. Lucy can’t remember new people from one day to the next, not even someone who’s falling in love with her.

I know a few retailers and other B2C sellers — and I bet you do, too — who suffer from a condition similar to Lucy’s. I call it customer amnesia. One symptom is their failure to recognize me from one shopping trip to the next, whether I’m in a store, on my desktop browser or using their smartphone app. Other symptoms include sending me too many irrelevant marketing communications and generally wasting my time. And, oh yes, treating me like an uninvited house guest when, in fact, I’ve spent hundreds of dollars in their stores. It makes me want to walk into a store like Richard Gere in Pretty Woman and announce that I’m going to be spending an obscene amount of money in here, so I’m going to need a lot more sucking up.

The Danger

Back around 1990, customer amnesia wasn’t a serious concern for either sellers or customers. It was just mass marketing. But in 2017, the era of engagement, forget your best customers and you can forget about their loyalty. Customers expect brands to remember and reward them for their loyalty by making their life easier and by offering them new, richer experiences. Retailers who aren’t improving their customer experience are losing ground: just look at the marketplace, examples abound (e.g., Sports Authority, RadioShack).

The Cause

Customer amnesia is a common problem for retailers who have a lot of unidentified shopper interactions across their physical and digital properties — that is, customers who don’t use the loyalty program, login on the website or otherwise identify themselves in-store and online. Without a systematic means of customer identification, the retailer can’t recognize a given customer from one interaction to the next.

The problem of customer amnesia has grown along with the number of customer touchpoints: websites, apps, new addressable advertising channels, chatbots and virtual assistants, along with associates and technology in physical stores and customer service centers.

Certainly, the growth of e-commerce has been a boon, enabling retailers to identify more of their individual customers and gather more information on their online and offline behaviors. Yet too many retailers still can’t answer questions like: What defines our best customers? Who are they and where do we find them? The problem often lies in a series of disconnects in the retailer’s technology stack, between CRM systems that house the customer contact info, separate in-store POS and e-commerce systems that capture purchases, other systems that capture website visits and app usage, advertising technology (DMP, DSP), and so on.

Ultimately, retailers must be able to recognize specific customers across all of these touchpoints, in order to identify and study their best customers.

Without rich insights into their best customers,
a retailer can’t deliver the kinds of individually-relevant experiences
that increase emotional engagement with the brand.

The Cure

Disconnected customer data is like a bunch of bones with no muscles and tendons connecting them. A customer identity solution serves as the connective tissue that binds customer data together into a unified view across time, devices and channels. It starts by assigning each customer a universal ID that acts like a ligament, connecting customer data across a retailer’s various internal systems and externally to the identifiers that their marketing vendors use for digital ad targeting and other activations. When a customer can be consistently and persistently identified across the entire marketing ecosystem, the infrastructure now exists to support many different use cases, from addressable marketing to customer journey insights to attribution analytics.

Five Benefits of the Customer Identity Cure

Once a retailer has the tools in place to recognize customers across time and
touchpoints, the benefits are myriad:

  • Rank customers by level of engagement, using metrics such as purchase frequency and lifetime value, with your best customers at the top of the pyramid.
  • Deliver individually-relevant marketing to each customer based on their level of engagement, to move customers up the value hierarchy.
  • Develop richer insight into the customer journey and the critical moments when marketing is most effective.
  • Conduct customer-level attribution analysis and optimize marketing spending across customer types and touchpoints.
  • Evaluate the effects of customer experience initiatives on your most valuable customers.

Ultimately, the retailers that work smarter to recognize, welcome and reward their best customers will have a significant competitive advantage over those who continue to suffer from customer amnesia. Because … sometimes you wanna go where everybody knows your name, and they’re always glad you came.

Loyalty E-book

Jonathan Petrino

Jonathan is the Director of Enterprise Consulting at Signal. Previously, he held key strategy, sales, and account management roles at Expedia, Responsys and Oracle. Additionally, he has managed marketing technology on the client-side, and is a Marine Corps veteran.

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