Exemplary
Relationship Marketing Sites
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This collection of Web sites illustrates what we consider exemplary Web sites that utilize one of the key opportunities of electronic commerce:  relationship marketing.

Relationship marketing (sometimes called 1 to 1 marketing) consists of several approaches:

  • Differentiate products, service or marketing
  • Differentiate individuals
  • Build relationships over time
  • Anticipate customer wants
  • Direct customer contact

Differentiate Products, Service or Marketing

The ultimate in differentiated products is the product customized to an individual.  Similarly, service may be customized as in special billing plans to suit individual customers.  And each prospect may be approached in a different way.

http://www.dell.com Dell was ideally positioned to take advantage of electronic commerce.   First, being primarily a mail order company, they didn't have to worry about upsetting distribution channels by selling direct over the Net.  Second, Dell sells custom computers.  Ecommerce orders are perfect for selecting choices in about 20 categories (memory, disk, processor, etc.) and instantly recalculating the price based on the choices.

http://www.personalpassions.com/, http://www.yournovel.com/ Personal Passions and YourNovel.com offer customized romance novels in much the same way that Dell offers customized computers.  The would-be romance author fills out a form of about sixty items about himself and his or her love interest and selects how steamy the novel should be.  A few days later the bound novel appears in the mail ready to revitalize a romance!

State of the Art Kids (http://www.sotakids.com/) offers customized books for kids.
http://www.actionfit.com/, http://www.countryroadfashions.com/, http://www.ic3d.com, http://www.toessel.com/ Several Web sites now offer custom clothing.  ActionFit offers swim suits and aerobic wear, Country Road Fashions offers custom Western wear and Interactive Custom Clothes Company offers custom jeans in over a hundred fabrics.  Then there are custom knit hats from Yossel's Toessels who claim to be "saving the world of knitting from weenies with hats that could kick yer butt."

http://www.ti.com TI&ME Texas Instruments, like most huge corporations, offers a wide range of products.  Any individual customer is likely to be interested in only a small subset of these.  We created TI&ME for Texas Instruments to give customers direct access to news about only those TI products that are of interest to each individual.  Users register and indicate their product areas of interest.  Each time they return to TI&ME, they are presented with news items from the last 30 days that pertain to those areas.  Customers may also choose to get weekly customized email messages summarizing TI product news for the previous week in their areas of interest.

The system is built on two major database components:  a database of users and their interests and a database of recent events, the relevant product areas and the news release date.
 Differentiate individuals Individuals first must be identified, then their behavior and preferences can be remembered and used as the basis for differentiated products, service and marketing.  Remembering individual differences then customizing offerings is   the essence of relationship marketing.

http://www.movielink.com One of the simplest ways to start building a personal relationship with visitors and customers is to remember who they are and a little about them.  For example, the MovieLink site stores the visitor's name and zip code in a cookie and uses that to display local theaters.  It's a very simple idea but it is a convenience for the visitors and helps MovieLink deliver the right information quickly.

http://www.amazon.com 1-Click Ordering, http://www.jcpenney.com Gift Registry One step up in complexity from a simple cookie as used by MovieLink is a database of people with information about them...information that makes it easy to buy.   Some obvious information to keep is name, address and credit card information.   Amazon uses that well with their 1-Click ordering buttons:  once a customer is registered he need only click the 1-Click ordering button to have the book currently in view to be charged to his credit card and sent to his address.

Another database notion, particularly appropriate for department stores or malls, is the gift registry, such as the one available at the J.C. Penney site.  An old idea brought to the Web, it uses information about individuals to facilitate purchases.
 http://www.netmarket.com NetMarket aims to provide nearly all the products that consumers are likely to purchase.  As a loyalty incentive for their best customers, they offer netMarket Cash, frequent shopper credits which can be applied to future purchases.   These credits are similar to airline frequent flier miles which started the era of computer-based relationship marketing.  The airlines, however, go much farther:   the best individual customers (Gold and Platinum members) have special ticket lines at the airport, early boarding, free upgrades and other benefits to make them feel special.

 http://www.greetst.com, http://www.1800flowers.com Several florists, gift shops and greeting card companies offer reminder services.  The customer typically enters birthdays, anniversaries and selects from a list of holidays.  He then receives email reminders a few days before the event.

http://www.netgrocer.com My NetGrocer Most online grocery stores facilitate frequent repeated purchases by maintaining a database of shopping lists for each customer.  It's handy for the customer since he need only check off the familiar items he wants to buy.  It's beneficial for the stores because the convenience of this  individual information keeps customers customers coming back.

Build relationships over time When a company identifies individuals and remembers their preferences and behavior, it implies a relationship over time. But it's not always clear how to maintain a relationship over time.  And, in some cases, it may not make much sense, such as for products that are bought infrequently or that are too inexpensive to justify a relationship.  But for those products where a relationship does make sense, how is it maintained effectively?

http://www.motleyfool.com/ Community The Motley Fool site provides information and analysis on investments but the feature that is most active, and that which brings people back, is the community.   The community is a collection of discussion groups to which visitors post about 5,000 messages each day.  Visitors provide the content, the messages, which bring other visitors back for frequent visits.  Motley Fool provides the venue where it can happen and along the way they sell ad space and a few products.  The loyal visitors return for discussions with the rest of the community.

Anticipate customer wants Vendors see a lot of customers with similar needs, tastes and interests.   They can use this experience, which is not available to individual customers, to anticipate what may appeal to an individual customer. 

http://www.amazon.com Bookmatcher BookMatcher is Amazon's collaborative filtering function.   Collaborative filtering works by collecting the likes and dislikes of many people on a collection of items (in this case, books).  It then recommends new books to you by finding other individuals whose tastes match yours on books you've both read.  It then looks for books the other person has read and ranked highly which you haven't read and recommends them to you.

Direct customer contact Companies that sell direct to their end customers have the advantage of learning from the customers and can offer customers products that more exactly fit their needs.

http://www.nike.com/ Product Recommendations Nike revolutionized the athletic shoe business by carefully designing shoes for particular purposes and differences in human anatomy.  But all that design is for naught if the shoe salesperson cannot tell customers which shoe is designed for their needs.  In a recent shoe buying foray, several types of shoes were recommended for me, not one of which was appropriate according to Nike.  Part of the problem is selling indirect:  the salespeople cannot keep up with the variety of shoes and needs.  But a company that deals in the volumes that Nike deals in must rely, at least in part, on an indirect sales force.  The problem is addressed in part by Nike's Product Recommendation system.  The prospective customer answers around a dozen questions about himself and how he'll use the shoes and the Product Recommendation System reveals which shoes are right.  The customer is thus armed to run into his local shoe store and ask for exactly what's right for him.  Of course, it would be nice to just order the shoes through Nike's Web site but their retail partners might not like that.

©1998, Harry Tennant & Associates
 

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