Frank,
This is a post I place on TMF:
"Couch,
Your post was so well written I had to read it again. I did find a problem in your thinking among others
on the second read. This paragraph is worth addressing:
Working from the concepts raised by Don Peppers and Martha Rogers in Enterprise One to One: Tools
for Competing in the Interactive Age, the first retailer who is able to establish a “Learning
Relationship” with its customers will develop insurmountable barriers to entry and be able not only to
protect their customer base and profit margins, but increase them over time. As such, the battle is not
for current profitability, but rather customer acquisition and retention.
In short, a Learning Relationship is one where the consumer teaches a company about their
preferences,
and in return, the company remembers the preferences and customizes the service for the consumer.
The more time the consumer spends teaching the company, the higher the barrier to entry. This is
achieved because it is more convenient for the consumer to stay loyal rather than teach a new company
about their preferences. In addition, once this Learning Relationship is established, it is only necessary
to maintain a level of service that is equal to the competition and a fair price (not the lowest).
The “Learning Relationship” has to be continually executed almost perfectly. Retail has no loyalty and
any loss of good execution will be the loss of a lot consumers. A case in point is Kmart versus Walmart.
Kmart was by far the first in its market, however Walmart determined customer preferences far better.
Therefore, Walmart executed better and surpassed Kmart by a large margin."
boards.fool.com
Glenn |
