The epoch of artificial intelligence and real-time decision engines is not the first time that historical and actual behaviour of customers has been tracked and analysed. The practice of making decisions based on these findings and applying them in real time to customer interactions was already going on in the 1970s. Mrs. Cerny, who ran the grocery store on the block where I lived as a child, performed these actions successfully every day, though admittedly on a different scale.
The value of knowing your customers
From Monday to Saturday, Mrs. Cerny opened her grocery store at 6 a.m. Compared to today’s supermarkets, her store was tiny. However, you got everything that you needed at that time to cater to your family. As Mrs. Cerny was a very attentive lady, she knew everything about her customers. She tracked and observed their behaviour day by day, and based on those observations, she adapted her actions.
Families she thought to have a higher income were offered more expensive brands of coffee. But her promotions were not only made to maximise profit. She was especially aware of those customers who had a limited family budget and made sure they knew about discounts because she hoped to retain them as buyers. Anyhow, she was a master of cross-selling: She knew exactly what to offer as a next-best product based on your actual purchase, and also based on the preferences that you showed in previous visits.
And she knew everyone by name and how to approach them. Her facial recognition capabilities, the real-time query to her names database, and the immediate selection of the optimal "call centre dialogue script" remain unmatched by our AI and real-time world.
Combining #data4good and credit scoring
Mrs. Cerny knew exactly to whom she could grant credit, allowing them to pay Friday afternoons when the paycheck of many workers was issued. Her decisions were not only made based on a risk assessment, but also considered the personal background of families. Single moms with kids and schoolchildren – who forgot their money at home, but urgently wanted to buy a snack before they went to school – benefited from her #data4good decisions.
Yes, be careful with your personal data. But do not overreact!
Many elements that are applied in customer intelligence have been around at a smaller scale for a long time. I am writing this story not to say that we should be careless when we provide our personal data in today’s digital world. Yes, conscious handling of private information and tracking permissions and pictures in social media is important and should be taught already to children. There should, however, only be limited surprise if you receive a voucher for Austrian red wine (which, by the way, can be excellent in some Burgenland regions) from your supermarket after you have regularly bought that in previous weeks.
With this blog post I want to outline that the practice of customer analytics is not really new. Mrs. Cerny probably knew the behaviour of her customers in much more detail than many customer insight systems do today. And she consequently executed her customer actions based on that knowledge. In the grocery store I never heard anyone complaining that she was not allowed to use the data in her head.
Mrs. Cerny retired in the mid-1980s, and another owner took over her shop. However, the years showed that not only decision engines moved to a larger and more digital scale. The availability of large supermarkets in the neighbourhood gave the small grocery stores a very hard time. Often when I fill a roll with sweet pepper spread I have to think back to that time, and I see Mrs. Cerny using the large spoon to add an extra portion of sweet pepper spread into my snack roll for school. She knew exactly what made her customers happy.