A New Blueprint for Customer Management

The grocery industry being in the throes of a movement to reorganize itself around the consumer rather than brands and categories may not be news to retailers, but whether the industry has truly learned how to do that remains a topic of considerable debate.

A new book publishing this week just might help.

Jim Dippold and Jean-Marc Sallenave, two industry thought leaders who met as colleagues at IRI, have co-authored
"Customer Management: How Retailers Must Change to Survive and Succeed."

In an exclusive interview with WGB, Sallenave described the effort as the industry’s first how-to book on customer management, or the overarching business process for managing customers as a strategic business asset. Pioneered in the early 2000s by retailers such as Tesco and Kroger that interpreted customer loyalty data to fundamentally change the way they conduct business, the authors argue that while many others have followed those companies toward customer centricity, very few have exhibited the organizational discipline to execute it.

“Retailers understand intellectually that they need to be more customer focused, but either they do not know where to start, or they’ve taken a much too narrow approach to the problem,” Sallenave said. “There is a lot of talk lately about this idea that with personalization and technology you can make offers that are more relevant to customers. What’s missing from that discussion is what’s your customer strategy? Do you really understand that customer segments you are addressing, and do you know which of these segments are critical for your business? Do you have a strategy to allocate resources and focus investments on certain segments more than others?

“We argue that without that thinking upstream, you won’t be able to fully leverage that power of personalization,” he said. “So what the book really brings is a process of thinking about your customers and making better decisions as a result.”

A paradigm shift from the category management discipline that prevailed in the 1990s to today’s focus on customer management came about when retailers harnessed the power of loyalty data, giving them insights they never had before, Sallenave says. The trend has only accelerated since the digital revolution gave customers new power to shop when, how and where they like, and the ability to compare prices in their phones.

While this combination has given rise to technologies that can deliver any number of customer-management capabilities, “a lot of the solutions we see at trade shows focus on the technology,” Sallenave said. “We felt what was missing was a process to manage customers that is as rigorous as category management managed categories.”

The book offers an overview of these changing paradigms then proceeds into a step-by-step process by which retailers can effectively implement a customer strategy as an extension of its corporate strategy. “We’ve turned it into a repeatable process that goes from customer understanding right down to the individual product decisions on the shelf,” Sallenave said.

The book is published by Customer Management Partners, a consultancy co-founded by Sallenave and Dippold, with offices in Stamford, Conn., and San Francisco. The book is available at Amazon in two versions: a 240-page expanded edition, and a 90-page executive edition.

The authors will share examples of the value of bringing a customer-centric approach and how to implement it during a webinar series hosted by Brick Meets Click. The first webinar is scheduled for Oct. 31.

Customer Management Partners and Brick Meets Click are also launching a “Customer Readiness Assessment” study to identify how retailers are using data to run their businesses and to assist improving their own customer-focused retailing efforts.