A few decades ago an old friend, Chris, worked in an off-license (if you’re not in the UK, that’s a liquor store) to supplement his meagre student grant. It was a job he enjoyed, inspiring a lifelong passion for fine wine and a flair for customer service, which in turn led to a career as a sommelier and then successful restauranteur.
Everyone who has worked the sharp end of retail has their fair share of tales to tell about difficult patrons and Chris is no exception. Stories of his time at the till are screamingly funny and often contain a pearl or two of wisdom, my favourite is a valuable lesson in the judicious use of customer data:
Every day at five o’clock a little old lady would come into the liquor store. Her order was always the same: one bottle of Gordon’s Gin and one bottle of Schweppes Indian Tonic water. She was pleasant, well-mannered and always stopped for a few minutes to chat about some inconsequential news of the day.
Over time Chris came to anticipate her arrival and prepare her order, she appreciated his attention to service and their conversations became longer. They discovered a shared a love of literature and theatre and a mutual fondness for the Romantic poets. Eventually, Chris felt he knew everything about his loyal customer except her name and address, and in that peculiar English fashion we reserve for deferential service relationships, he felt uncomfortable asking for either.
Then one day, as he placed a neatly tissue paper wrapped bottle of Gordon’s in a carrier bag and handed it over the counter, Chris said: “ You know, you come in here every day for a bottle of Gin, you could save yourself a lot of money if you bought it by the case. I’d give you a generous discount.” The lady took the proffered bag of liquor and replied, “ Thank you, I might just do that.” And somewhat abruptly, turned on her heel and left.
She never came back to the shop and Chris never saw her again.
At first Chris thought he had offended his customer by appearing to place such little value in their daily ritual that he would cheerfully replace it with a fortnightly bulk transaction. It took him a while to realise exactly how he had hacked off his most loyal patron: the little old lady was a functional alcoholic and, albeit unintentionally, he’d made a brutal statement about how much booze she consumed.
Perhaps Chris did the old lady a favour by highlighting this fact, prompting sober reflection and life change? More likely she just found another place to buy her gin, kept calm and carried on drinking. Working in an off license you are already, in some way, an enabler of abuse, leaving moral arguments aside there are more pertinent lessons to be learned from this story.
Chris assumed he had a better offer to make the customer, his reasoning was based solely on cost, not value. He made an assumption about his customer’s liquidity and interest in a cheaper product. His customer had never questioned the cost of a bottle of Gin or Tonic, why erode operating margin on core inventory to please a fiercely loyal customer? There are so many other ways to make a Whale feel wanted.
Generally speaking Reward Programmes are run to grow a customer base and reduce churn in price sensitive segments. Caring for the Whales is a different matter altogether and an area where creative use of available customer data is required. If Chris had wanted to show his appreciation for the old lady’s business why not offer free lemons? A bag of ice? Or if she liked it pink, Angostura Bitters?
Given the budget (say, equivalent to the gross cost of a 5% retail discount on two and a half cases of gin a month) a small book of poetry would have made a cheap and very personal gift. Heck, a theatre ticket or two over the course of a year wouldn’t have been out of the question. With the massive amount of customer intelligence he had at his fingertips Chris could’ve really gone to town.
Which brings us to the last inference point: privacy. Sometimes we know a great deal more than we need to about our customers just by observing the way they use a service. It’s tempting to derive our own advantage from that data at the expense of an end user (that’s the Facebook model right there); it’s idiotic to treat that data as sacrosanct, surround it with huge walls and consider everything off-limits for fear of ‘compliance issues’ (that’s the traditional Telco model).
Applying basic business acumen we can strike a happy medium where intel is used for the benefit of both parties and the detriment of none. And that’s why Chris tells that story: after all these years he is still kicking himself for not using his own common sense – so use yours.