Data bases help target consumers' minds, hearts

ON EXCELLENCE

February 14, 1994|By TOM PETERS

Thanks mostly to the enormous power of the computer, firms are waking up to their primary asset: customer relationships.

With the explosion of new products, Procter & Gamble, Philip Morris, Apple and others have lost their edge. (A poll reported in Computerworld claimed 53 percent of Macintosh users thought "Apple's trademark ease-of-use distinction" has been eclipsed, even by lower-cost brands.)

On the other hand, businesses are swarming to take advantage of who they know. For example, even before its planned merger with Viacom, Blockbuster Entertainment boasted a wild string of expensive acquisitions (record retailers, movie studios, children's indoor play centers) aimed at exploiting the power of 48 million Blockbuster Video cards (13 million more than American Express has).

Forty-eight million names in the data base, of course, range from the very occasional user (me) to the video-rental addict. No matter, all 48 million, as Blockbuster sees it, are the basis for building individual relationships that can somehow be milked. The trick, of course, is the somehow.

The race is on to get a hook into your psyche and mine. We see that in Bell Atlantic's pending takeover of cable monster TCI. Phone and cable companies already know an enormous amount about us -- and enhancing these physical and emotional relationships to sell us a stupendous array of services is the new name of the new game.

Many (probably most) of the big multimedia deals will flop. And the idea of bankruptcy even for a Blockbuster or Bell Atlantic is not far-fetched. After all, a huge share of our railroads, after a similar speculative spurt in the 1860s to 1880s, ingloriously went bust in the 1890s.

But who wins and loses is beside the point -- which is that all sorts of folks have glommed onto the idea of investing in relationships. Take P&G again. While it has unconscionably allowed brand distinction to atrophy (is Charmin still noticeably more squeezable than competitors' offerings?), it has worked at the same time to establish strategic partnerships with retailers. The once arrogant giant will now jump through most any hoop for Wal-Mart, for instance, and has even established a big office at Wal-Mart's headquarters to nurture day-by-day relations.

Reed Personnel Services, a British temporary service agency, lives by the slogan "Partnership Sourcing for People." Reed employees based at major customer organizations aim to anticipate customer needs.

To see how far the relationship game might go, consider the battered airline industry. Beset with losses, especially in the short-haul business, airlines may eventually sell everything except their names, route structures and reservation systems, the Wall Street Journal reports. That is, everything except the logo you see and the information they have about us -- i.e., the basis for their relationship with us.

Bankers, whose core brands are also under assault from all corners, are acting strangely as well. Chemical Bank, the nation's third largest, has formed an insurance company, which it's touting as a core business.

Business? Chemical doesn't underwrite the insurance; it farms that job out to real insurance companies. Nor does it process claims.

Its independent affiliate, CBC Insurance Agency Services, performs that chore. In effect, as in the airline fantasy, Chemical specializes in marketing and relationship development using its strong name to peddle policies by phone and mail.

Much of this smacks of smoke and mirrors. Disney's Michael Eisner says he won't get into the Bell Atlantic/TCI sort of chase, because, ultimately, all the new multimedia-distribution schemes will rise or fall on substance. Top-notch Disney programming, as Eisner sees it, will be more welcome than ever as network capacity expands exponentially. Likewise, the major airlines, for all their marketing might, have been bopped by a better basic product -- a re-creation by Southwest of the "old" style of flying folks in a low-cost, friendly fashion.

Nevertheless, the value of relationships has never been greater. Regardless of whether Chemical Bank, Bell Atlantic or Blockbuster succeed, winners will be those who creatively extend their tentacles into millions of homes.

The fundamental point: The intensity, reach and breadth of your business relationships are arguably your most valuable assets. While few would deny that, most do not formally put relationship development atop their strategic agendas. That's a mistake, especially if an energetic competitor gets the electronic (etc.) drop on you. Even in this fickle, nanosecond-denominated age, a lost relationship is typically lost for a long time.

(Tom Peters' column is distributed by the Tribune Media Services Inc., 720 N. Orange Ave., Orlando, Fla. 32801; [407] 420-6200.)

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