Capitalize on 'Smart' Technology

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Imagine driving to the local grocery store. You pull your car in front, pop your trunk open and flash your lights. The clerk sees your signal and loads bags of groceries into your car's trunk. You wave and you're on your way. No more parking nightmares, rushing through crowded isles and standing in line.


And it was all made possible because your refrigerator phoned ahead.


That's right, your refrigerator phoned ahead. And not only did your refrigerator order the groceries, but it also negotiated discounts on items you frequently purchase, allowing you to receive valuable savings from companies that offer goods and services customized to your unique buying habits.


Welcome to the new world of "intelligent appliances." A world where home appliances speak with each other, communicate with the outside world and allow companies to leverage the power of database marketing and analysis to develop lifelong customer relationships.


Here's another scenario. It's Saturday night and you're in front of your television. Activated from a simple voice command, the set connects with a company offering thousands of entertainment choices that locates your personal profile, immediately recognizes you and welcomes you back. And based on a detailed analysis of the data it has captured about your viewing habits, it selects the top 50 shows that match your profile. Not only are the shows customized, but you also now have access to selected offerings and unique pay-per-view events.


By communicating online, your television navigated a network of connections and triggered a series of events resulting in entertainment customized to your viewing patterns. Simply put, no more clicking though dozens of channels and thinking to yourself, "There's nothing on tonight."


These advancements go even further. In addition to customizing program content, broadcasters will use captured data to target commercial messages, refer viewers to specific goods and services and offer on-the-spot discounts.


Getting faster, better-connected. These scenarios are approaching faster than you think. Companies such as Sunbeam with its Thalia (Thinking and Linking Intelligent Appliances) Products division, Sharp, Electrolux and General Electric Co. are working on sophisticated methods to embed systems and network everyday appliances that include microwave ovens, smoke detectors, alarm clocks, electric blankets and coffee makers. And electronics firms are working to further integrate Web technology into televisions or TV technology into personal computers.


In June, Sunbeam announced that it reached a memorandum of understanding with Sun Microsystems to co-develop networking software and protocols to connect household devices. According to Sunbeam, products will be available in early 2001.


Electrolux is working on the Internet refrigerator, and Sharp is working on the Internet microwave oven with the capability to download recipes and cooking information directly from a database of recipes. Microsoft is further developing Windows CE, enabling home appliances to work together seamlessly and automatically. This strategy, called PC Plus, is taking the microprocessor and integrating it with everyday items.


New dimensions of data. As technology continues to evolve faster than ever, microprocessors are becoming smaller, and networking capabilities continue to expand. This is good news for database marketers, leading to a revolution in the way companies collect data, analyze it and use their findings to develop relationship marketing strategies.


The bottom line? Smarter technology and increased connectivity will enable marketers to realize their goals in developing lifelong profitable customer relationships and increased efficiencies in converting prospects.


As a result of the advancements in technology, database marketers will be able to rely on real-time information, enabling them to analyze and react to fluid situations, such as grocery purchases, television viewing habits, where and how often you fill up on gasoline, vacation experiences and clothing purchases.


After information is captured, database marketers will use transactional data to create personal profiles from the most detailed historical information ever compiled. Through advanced modeling techniques, corporations will determine the lifetime value of each customer by integrating product longevity. How often does a person fill his gas tank? How often does he shop for clothing? Predicting the moment a consumer is ready for the next purchase will become more refined. It will also be easier to target consumers by leveraging new, "smart" channels that will be available.


This will become marketing at the microlevel.


In addition to increased returns, marketers will enjoy the ability to develop stronger, more substantial customer relationships. Through future data collection and analytical techniques, corporations will better analyze and predict consumer demand for individual products, allowing for increased purchasing efficiencies, increased sales and better profit margins.


To get back to that grocery store, imagine using analytical results to not just track and predict purchasing trends but also to understand how quickly each item was consumed.


Is that milk expiration date approaching? Better alert the consumer to buy another. Is there a sale on soft drinks? Better tell the consumer there is money to be saved. Not only will marketers leverage new communication channels, but they also will integrate strategies with e-mail and good old-fashioned direct mail.


Remembering the consumer. These new technologies will bring additional industry pressure. As marketers embrace new technology and use it to further refine analytical processes, customize messages and tailor programs, the industry will need to continue its self-vigilance.


To maintain public trust and prevent consumers from perceiving technology as a further eroding of personal privacy, marketers should strive for public-private dialogue, producing better consumer experiences. They should also continue to allow consumers to opt out of promotions by making them aware when data are being exchanged and by continuing to reward consumers for their participation.


For many consumers, the perception of database marketing is that it is solely created to target them with unwanted mail, e-mail or phone solicitations. Even with technological advances that have made direct response more targeted, more personalized and less scattershot, consumers still receive volumes of unwanted solicitations.


In the era of relationship marketing, when analytical methods are becoming more refined, logical and accurate, industry practices of reaching consumers must embrace "smart appliances" and other new technologies to produce a seamless customer/company marketing experience - with total respect for their privacy.


As database marketing integrates effortlessly into consumers' lives, marketers will need to remember one thing: You can build a better mousetrap, but it's still the same cheese that makes the best bait. A strong offer, the right audience and interesting creative. In that order.
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