A typical city in ancient Greece had a large open area (the agora) where local merchants could set up displays and sell their products. Merchants of similar goods had shops together in a specific area in the agora, not unlike today’s shopping districts in major cities around the world.

As you might imagine, such clustering, while convenient for the customer, made life extremely competitive for the retailer. When a new shipment of ivory arrived from North Africa the ivory merchants would cry out loudly to passersby, proclaiming the merits of their particular offerings. Bustling, noisy and chaotic.

Inevitably, those merchants who understood and developed a long-term relationship with their customers – so that they could minimize having to shout out all the time to gain attention – were the most likely to prosper. Which households needed and could afford new linens from Egypt or spices from Syria? Which Athenians had just bought new slaves and needed extra stores? Send a runner to connect with the customer. Call it the earliest beginnings of the CRM process.

The drive to understand the customer continues. In April 2007 the Economist Intelligence Unit conducted an online survey of 180 senior global executives from the retail industry, querying respondents on their current and planned strategies to understand and anticipate customer needs. The resulting data has been captured in a special report sponsored by SAP, “Intelligent Merchandising: Creating a Unique Shopping Experience”.

To customers bombarded with so many products and experiences, it’s the brave retailer who can claim to offer anything unique by way of merchandising or customer service. So just how do retailers try to hook customers with fresh, unusual and relevant shopping experiences?

The Economist Intelligence Unit started with customer loyalty, asking about the single technique most used by retailers to identify and understand their best customers. The most-cited results:

• 40% Tracking of purchasing records through loyalty cards (recency, frequency, monetary value)
• 26% Formal use of surveys/questionnaires at point-of-sale (POS)
• 15% Analysis of participation in incentive contests and programmes (eg, promotions)
• 9% Analysis of dispute resolution (eg, returns, pricing errors)

To all intents and purposes, though the labels may be different and the technology a little more advanced, these are the same CRM techniques used instinctively by those long-departed Greek merchants to identify their most-favoured households.

There’s nothing much new in the “encouraging customer loyalty” toolkit either. Loyalty-enhancing strategies used by more than half the respondents were introducing new products (63%), local store activities (56%) and targeted discounts for specific customers (52%).

Other popular loyalty-focused initiatives included:

• 48% Incentive programmes for repeat purchases at the POS (eg, cards, clubs)
• 37% Off-site incentive programmes for repeat purchasers (eg, rewards, discounts)
• 29% Follow-up phone calls to customers after significant purchases
• 41% Customised promotions based on past purchases
• 42% “Special customer only” events and promotions
• 46% Targeted advance notification for sales and promotions
• 19% Special e-mail discount codes for best customers

Once again, the methodology may have changed but the customer service principles remain eternal.

Measurement
Communicating is one thing, but measuring the success of that communication is another. The Economist Intelligence Unit asked respondents what measures they use to track the success of promotions. The top two responses were somewhat intuitive indicators—customer satisfaction (55%) and customer retention (52%)—while the eminently measurable sales per square meter of retail space/week (40%) offered a strong statistical counterpoint.

In-store traffic (31%) and customer opinions (31%) are still perceived as important indicators, emphasising the heavy reliance that executives place on sales staff. This dependence on the lowest-paid member of the retail organisation as a reliable observer of customer behaviour is a conundrum of contemporary retailing.

Despite the number of advanced data collection technologies available, the sales associate is still the retail organisation’s number-one ambassador and data collector, so the acquisition, training and retention of appropriate help is a critical element in the strategy of any successful merchant. Just can’t get good slaves.

Winners & Losers
The Intelligent Merchandising report even goes beyond the numbers, drawing on the cumulative statistics to create fascinating profiles of retailing winners and losers.

Merchandising Leaders:

• Create trends
• Lead their customers
• Push the envelope in product development
• Cold heartedly kill the dogs
• Encourage responsible risk
• Expect a great deal
• Strive relentlessly
• Have swagger and bravado

Tired merchandisers, on the other hand:

• Wait for customers to accept trends
• Merchandise based on history
• Rely on line extensions
• Are risk averse in product development
• Focus on the fact that most products fail
• Make excuses for the dogs
• Carry too many unproductive SKUs

If you want to find out more about CRM techniques in Ancient Greece, may we recommend a visit to your local library. More up-to-date customer service insights, however, can be found in the Intelligent Merchandising report, which we share with subscribers to MARKETING RAG.

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