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February 15, 2013

The Advantage of Knowing Your Customer

Posted by Sandeep Dadlani (View Profile | View All Posts) at 8:42 AM

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Von Clausewitz famously wrote that you should know your enemy. That's mighty helpful advice for a battlefield commander. That said, I have a piece of advice for busy executives who want to get some tactical advantages for themselves and for their teams: Those 19th-century military analogies only go so far.

Instead of dusting off your imaginary epaulets, try this one on for size: Knowing your customer is the key to differentiating your enterprise from your closest (and fiercest) rival. I came up with this adage while sitting back in my favorite chair and watching television. But there's why. Nowhere is the knowledge of an organization's customer more telling and more potent than in today's cable and telecommunications industry.And I'm living proof. That cable company has a hold over me that few other forces in nature do. I pay my cable provider an arm and a leg for the honor of not hearing from their competitors as to what deals they'd give me for switching sides. Who needs healthy competition keeping prices down for consumers when the company you deal with has you hooked and coming back for more?

Even the appliance and electronics companies are experiencing the power of my fully operational cable company. I once considered buying a new television set for my home office. But my cable company, as it always does, encouraged me to sit back and use my computer screen instead. It's already set up in my home office, and because the same company provides my house with Internet and telephone services, I have a ready-made portal that the cable provider can use to detect what my favorite shows are, how long and to whom I call, and my online habits.

Now there is a chance, mind you, that I could break free of the cable company tractor beam in my den or home office and embark on a long journey (to, say, dinner at my favorite restaurant). The cable company has ensured that it's a trip outside in name only; I still get great Internet and mobile telephone service in my car and the entire restaurant is a hotspot. During these outings the cable company's rivals can barely make inroads into my universe. What if a pesky telemarketer attempts to persuade me to switch companies? Not going to happen. My cable guy makes sure I can screen calls and emails so none of that fluff gets through to me and interrupts my busy schedule. There's no way the other company is going to offer me a better plan ... right?

Anyhow, even my dog is part of the grand scheme. Say he decides to relocate my remote control to a place where I can't find it. I already have the control app downloaded on my iPhone which - you guessed it - carries the cable company's three-in-one plan. I used to be amazed at the extent to which the cable company could anticipate my every move. They seemed to know what I was going to watch and whom I was going to call even before I dialed the number or picked up the remote.

I now clearly see how knowing your customer's every preference puts you at an advantage that even old Von Clausewitz would envy. In the early part of the 19th century, he wrote that  "we try first to discover what lies ahead of us for we can seldom see that clearly in advance, and which way the battle is turning." I can only think of what this master tactician would think of the cable company's brilliant hold over my life. They see my next move so well in advance, their competitors don't stand a chance!


Nice one Sandeep. Connected TV, internet, smartphone, mobile wallet and what not....all interfaces screen for info, behaviors, patterns and there is another industry monetising it! The advertising industry along with retail is going through such a disruption that few years from now physical shops will disappear for commodities and we will have online networks and exchanges (like the stock industry), companies will make offers to customers based on the data they collect...

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