To Serve Customers Better, Get to Know Them Better

How to build a devoted clientele? Use technology to deeply mine your customer database. By slicing information into ever-finer segments, you get to know your customers better and can enhance the benefits they get by choosing you over rivals.

One tactic is to gather specific information about customers' preferences (through devices such as loyalty cards) and then appeal to those preferences. For example, Harrah's Entertainment split its Total Rewards card-holding customers into tiers based on their annual spending, then treated the groups differently. "Gold" customers waited in lines at reception desks or restaurants; "Diamond" customers didn't. Seeing the perks others had, "Gold" customers spent more to earn the higher-tier cards.

By Editors  |  November 11, 2008; 8:00 AM ET  | Category:  Management Tip of the Day
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