Great Business Ideas: Using customer information

Great Small Business Ideas to Start: Using customer information

Seamlessly gathered information can be used to save costs, to provide a tailor-made service to individual clients, and to sell more—often using the internet.

The idea

The American online retailer has redefined bookselling.

Its culture appreciates the potential of technology, with the company using information in four key ways:

  1. T o minimize risks by analyzing information from millions of customers to see how and when they purchase, enabling to reduce the level of risk.
  2. To reduce costs by using technology to control the way it manages its inventory and suppliers.
  3. To add value and help customers by offering reviews of books and free downloadable information, and by treating its home page as an individual storefront for each customer—for example by tailoring lists of suggested titles that the customer may enjoy based on previous purchases.
  4. To innovate. Amazon believes that, to rival its competitors, an innovative approach is essential in order to improve the value and service offered to consumers.

What matters is not simply what information exists, but how that information is used to build competitive advantage. Interestingly, many other retailing companies have now followed Amazon’s lead. For example, Apple’s iTunes and iStore have done for music retailing what Amazon did for bookselling, using many of the same principles.

In practice

  • Treat each customer as an individual. For example, music retailer iTunes tracks the purchases of individual clients and provides a customized webpage designed to introduce a client to new buying opportunities that appeal to his/her personal taste.
  • Use the internet to provide information for the individual—even if your business does not carry out its primary operations online. By collecting customers’ email addresses, a business can develop a highly valuable and intimate marketing strategy.
  • Smaller businesses and freelance workers may be able to research more in-depth information on each client. This can then be organized into an accessible database, with subheadings for each client covering all areas of relevant information.
  • If your organization is unable to seamlessly track consumer trends, use incentives such as free products for customers who volunteer their information. Similarly, you should also provide rewards for customers who agree to receive information on your organization—the marketing should be entertaining, lively, appropriate, and relevant.