Reciprocal Marketing is not a new concept in Retail marketing in India. Mostly in the B2B segment where promotions, cross-subsidy and cross-sale combinations exists. Insurance is offered for people who open bank accounts. Credit cards are offered in conjunction with book buying (landmark). Money back when you fill gas in a IBP station on debit cards etc... All this hints towards sharing the consumer (data).
To carry this to the next level, it is important for Retailers to come out of their shell and stop worrying about 'who owns the consumer data'. I keep getting into all sorts of debates and uncertainties of why Organized Retailers should or should not expose their Consumer data. The claim for not exposing is that, clean data is expensive and the IP differentiator for better conversions and loyalty for a given retailer, so the data should be owned and not shared.
But what is clean data ? How do you validate it ? How do you maintain it ? What is the cost of logistics ? What is the strategy for conversion ?
Clearly, the sum of cost of solving above hurdles for "clean consumer data" is significantly higher for the Retailer before gaining any benefits from such a data if each and every individual Retailer repeatedly manage their own datasets. This is why there is a half hearted effort by every Retailer. Nobody seems to have walked the whole mile (maybe except the Gas Agencies as its a regulatory body and they must validate). Consumer Loyalty forms, credit card records and Home delivery challans are the only validators existing today. Among this, credit card companies will not authenticate the consumer info fully. Payment gateways are a black box. Obtaining consumer psychographic details is a costly research and catchment exercise.
Instead, why not free the data ? Put it up on a "Consumer Data Cloud". Open the collaboration of consumer data by offering direct incentive to the consumers for maintaining and upkeep of their own info (with a shroud of privacy). Technology exists for this today.
Sharing the consumer data across segments shall be the next disruptive wave to change the Retail horizon.
The time has come to reap the benefits of open collaboration (Given that consumers are readily pouring their life's worth on Facebook, Twitter, MySpace and the rest of the Ning bases). Yes, privacy is a concern. Privacy must be the focus while collaborating such data independent of whether it is on a Retailer's platform or otherwise. I would go a step further and argue that privacy can be better managed, audited and assured if consumer data is managed as a single source of truth (single cloud). The cost of assuring privacy for such data for every Retailer on their own infrastructure is high and incredulous !
The benefits of freeing consumer data ?
- Pruning of costs across CRM which releases fairly significant chunk of capital. A portion of that capital can be re-purposed for interacting with the 'consumer data cloud' (smaller than the cost of managing your own dataset)
- Single source of truth both for the Consumer and the Retailer. Consumers especially can have a single pane of glass across all their Retail outlay (visits, purchase, spend, loyalty points). Retailers of course benefits from higher analytics and trending across consumption lifecycle of the consumers.
- Enablement of a Co-Opetition framework where Retailers can co-operate as well as compete for the Consumer's attention. This is where true reciprocal marketing evolves. Cross loyalty, cross segment combo kits (dinner and a movie package), targeted promos, cross segment redemption schemes will be more meaningful and rich in ideas and innovation.
End result? better engagement, targeted touches, hand holding across consumption lifecycle, point discounts, higher redemption and yes, absolute conversions. Sounds like utopia, maybe not. But truly a step closer.
All this and more is possible only if Retailers break their shell and hatch. Its about time the data is free (as in freedom)...
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