Joining the customer dots

Customer dots - sIn late 1994, Tesco’s marketing team had just completed the first trials of what would become the Clubcard. They were about to take their findings to the board, and they were extremely nervous. Their chairman, Sir Ian MacLaurin, was the man who’d axed their last loyalty scheme when he became CEO 17 years before, and everyone knew he would take some serious persuading to sanction a new one.

They did have some good material though. One of the first things they’d spotted from the data during the trial, was that there were big gaps in peoples’ shopping. Large numbers of customers would be buying most of the things an ordinary family would buy, but no bread, or no meat, or no vegetables – apparently they were buying them elsewhere. The team sent those people special offers to try Tesco products in the missing categories and watched the data to see not only how many took them up on the offer, but how many went back to their previous pattern afterwards, and how many preferred to stay with the Tesco products once they’d tried them.

By the end of the 90-day project, the sales uplift across the 14 trial stores was something like 12%. More importantly, the team had learned a wealth of unexpected things, for example, which products simply weren’t up to the local competition, and for the first time, they started to understand not just what their customers did, but why. At the end of the Board presentation MacLaurin sat in silence. Eventually he spoke: “What scares me about this is that you know more about my customers after three months than I know after 30 years.”

From that moment on, and for the next two decades, Clubcard data would drive almost everything Tesco did in the UK, from product selection and pricing, to promotions, advertising and store opening; and as a result, the number of customers they’d serve would grow by a factor of five.

What could you do with five times the number of volunteers, members, donors, campaigners or paying customers? How clearly can you see the gaps in their engagement, the patterns in their behaviour, and how easily can you encourage them to try something new they might enjoy?

Most charities understand their supporters and service users pretty well. Having served them half his life, MacLaurin thought he knew his customers pretty well too, until he saw the Clubcard data and discovered what real understanding looks like. So why, in the almost quarter of a century since Tesco made the leap, have so few charities followed?

The most common reason I hear is that charities have neither the systems nor the expertise to do what Tesco did. But the truth is, back in 1994, neither did Tesco. What they did have was the belief that it could be worthwhile, the willingness to give it a try on a tiny scale, and the openness to partner with a start-up who developed it all for them. Today you can license on-line systems more sophisticated than they could have possibly imagined, for next to nothing.

I often wonder when WWF will realise that the 16-year-old who signed up as a “companion” thirty years ago is the same person who sponsored a dolphin for their son last year; or when Greenpeace will notice that one of their regular donors has never been asked to sign a petition; or maybe when the National Trust will swipe my membership card as I buy a cake and a guidebook, and tell me to visit somewhere nearby, where they know I’ve not been, and they think I’d like.

I’d hate to think I’ll be waiting another quarter of a century.

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