Use Your Database, Rapp Tells @d:tech Attendees
"Whoever owns the database owns interactive access to the marketplace," he said.
Successful companies are proof of that. EBay, the No. 1 online trading site, has 50 million buyers and sellers on file. Amazon.com, the leading online bookseller and retailer, has 37 million registered shoppers. American Airlines has 40 million frequent fliers.
Overseas, one out of two Canadians is a member of Air Miles, one of the leading loyalty programs involving cross-sells from participating companies. Bradesco, an online bank in Brazil, has 4 million direct depositors.
British grocer Tesco is a sterling example as it works its way into becoming the distribution channel between customers and their lifestyles. For example, it has 10 million registered Clubcard members. It is the most profitable online grocer in the British Isles, relying on store employees to pick and pack orders instead of building expensive new warehouses.
In addition to that, Tesco owns a mail-order catalog, offers holiday programs and a co-branded credit card, runs a mother and baby club and publishes six magazines for its customer segments. Last year, sales were up 14.2 percent, profit higher by 14 percent and international profit rose 120 percent. An estimated 20,000 new jobs were created this year by the chain, which employs 180,000 people at home and 240,000 worldwide.
"While Webvan was failing here, they were succeeding there," Rapp said.
So, despite this success, what does the company do this year? It takes over the Air Miles program in Britain, a move that unsettled rival grocer Sainsbury's.
In the new battle of the database, Sainsbury's decided to fight back. So it partnered with Barclays Bank's Barclaycard, retailer Debenhams and petroleum giant BP to launch this fall its own Nectar loyalty program. In the process, all these companies have closed their individual loyalty programs.
"They're saying collaborate is better," Rapp said.
Another tip Rapp offered attendees was to erase the difference between products and services. Instead, marketers should find their unique selling proposition. They should track who buys, where and why, customer behavior and future intent.
"How to wrap an intangible value around the product is a service," he said. "What you wrap around that product is a service."
Again, Rapp cited a British company, this time an online bank called Egg and showed a slide of the site's homepage, www.egg.co.uk. Instead of the usual business look, it had a 25 percent discount on a push-up bra. Clicking on other tabs offer myriad shopping options, such as music CDs, motor insurance, among a host of items.
"Put your money in the bank and then you spend it," Rapp said.
It is no wonder that Egg accounts for 2 million out of the 6 million consumers banking online in Britain. In the last three months alone, the overall online banking population there has grown by 1 million. Egg alone gained 29 percent more unique users in February compared with December.