Supermarkets and banks doing best job of getting close to customers but other sectors struggling

By Andy Wood

Supermarkets and banks are doing a better job of communicating with their customers in a meaningful way than other businesses, with consumers rating them well above firms in all other industry sectors, according to the new Customer Intimacy Index produced by database marketing specialist GI Insight. The Index also reveals that companies in many industries are, in fact, struggling to connect with customers – and that businesses in almost all sectors need to do a much better job of creating personalised, well-timed and relevant communications for older consumers.

Table: 2013 Customer Intimacy Index

3 

The 2013 GI Insight Customer Intimacy Index, compiled from a survey of over 1,000 UK consumers, scores a range of sectors according to the level of knowledge of the individual that companies in those industries demonstrate in their customer communications. Consumers representative of the UK by age, gender, region and social class were asked to rate ‘your supermarket’, ‘your bank’ and other types of business – with scores representing levels of familiarity ranging from ‘knows me like a close friend’ to ‘treats me like a total stranger’. The overall average was set at 100.

Supermarkets came out far ahead of any other sector with a score of 132 – in other words, 32% above the norm – an improvement on their table-topping rating of 126 in the 2010 Index, the last GI Insight industry ranking. Banks also showed a marked improvement since the previous Index, moving past Internet Service Providers (ISPs) to second place in the table with a score nine points higher than in 2010. Other sectors that performed strongly in the Index were technology-driven, youth-oriented industries, including mobile providers, smartphone makers and entertainment companies (eg. satellite TV services, video websites, music download sites, etc.).

The Index indicates that industries with frequent transactions and strong loyalty programmes – which give firms the best opportunity to gather and employ consumer data – are most successful at relating to their customers in a relevant way, but there are some surprising exceptions:

• clothing brands, many of which have a strong flow of business on the high street and online, come across as distinctly average in the knowledge they demonstrate of their customers, with a score that is dead on 100;

• firms in the home furnishings/DIY sector are doing an extremely poor job of connecting with customers despite having opportunities for regular contact, as consumers rate these companies 21% below the average – placing the sector alongside other poor performers such as car manufacturers, computer/tablet makers and alcoholic drinks brands;

• holiday, hotel and travel companies were only just above average, with score of 105, despite having extensive opportunities to gather unique data on their customers – although transactions may be of higher value and less frequent than those in other sectors.

The Index also shows that women have particularly high expectations. Companies across all sectors are finding it considerably more difficult to convince female consumers that they are using their data effectively to personalise and tailor customer communications, with women scoring all firms 10 points lower than men. The only sectors in which women ranked the companies they deal with higher than men were supermarkets and clothing.

Other key findings included:

• the score given to charities dropped by the biggest margin compared to the last Index, while ISPs fell to fifth in the rankings from second in the 2010 table;

• consumers under age 45 rate the firms they deal with more highly than their elders, with 25-34-year-olds giving all sectors the highest average score of any age band – an unambiguous 116;

• older consumers are markedly less impressed with the levels of personal engagement achieved by the companies that communicate with them, with respondents in the 45-54 age group giving all sectors a particularly low score of 72 – 28% below the average.

In the face of continuing tough times, it is more important than ever for companies to establish strong relationships with their customers using data gathered from multiple touch points. The latest Customer Intimacy Index suggests that organisations in many sectors are failing to do so and that most are falling especially short of the mark when it comes to older consumers. The result is that companies – particularly those operating in new, technology-driven sectors and those that tend to be very youth-oriented such as fashion brands – risk alienating customers who have greater disposable income. The sheer volume of consumers from older demographics means these people remain a key economic engine that brands ignore at their peril.

Too many companies in too many sectors are simply failing to communicate with all their customers in an informed and tailored manner – especially those with more spending power. They are not finding the right way to gather available customer data and, even when they do, many firms are clearly not using it effectively. Consumers today expect businesses to know who they are and have some idea of what their needs are – and to reflect that knowledge in their interactions with them. This Index indicates that companies in most sectors need to do more to convince consumers they know them well and value their business.

About the author

Andy Wood is GI Insight’s Managing Director.

About GI Insight

GI Insight (www.gi-solutionsgroup.com) specialises in database marketing and loyalty schemes, having created and managed more retail loyalty programmes than anyone else in the UK. The Leicester-based company offers a full range of database marketing services including consultancy, database design/build/host, data capture, analysis, segmentation, profiling, campaign execution and measurement, available as a whole or on a ‘pick and mix’ basis. The analysis and interpretation of your sales and customer data enables you to influence customer behaviour. This knowledge helps you to reliably increase profitability by:

• getting more new customers (acquisition);

• getting existing customers to spend more per transaction and spend more often;

• reducing Customer Attrition (retention).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s