January 27th, 2009

Who owns the customers”?

We were having a conversation with a company operating in durable household appliances sector. A member of the Board of Directors said; “Every family in Turkey is our customer!“. While everyone nodded, I objected it. The conversation continued;

- Mr. Ugur, don’t you have products of our brand in your house?

- Yes! About 4 or 5 of them!

- Aren’t you one of our customers?

- No, I’m not.

Everyone turned their head to me after that. All my executives also turned to me in confusion. I bet they thought “What the heck is Ugur babbling about when we are meeting with one of the biggest companies of the country?”

- I am a customer of your dealer in the ground floor of the apartment building I’m living in.

- How do you mean?

- That dealer sells your products. When the TV is broken, we didn’t discuss on what brand to buy. We just went downstairs to him and got a neighbor deal, and we bought it. When the juicer we got as a wedding gift was broken, we bought one of your brand’s products 15 minutes later. Therefore, the number of products with your brand increased in our house. However, that does not necessarily make me a customer of yours.

- Why?..

- If that dealer leaves your brand and becomes the dealer of a competitor of yours, the appliances in our house would change to that brand in time. Then the number of products with your competitor’s brand would increase in our house.

- ….

- Can you call me your “customer” unless you know me, know when I bought the appliances in my home, make an offer to me when I am going to buy a new appliance, and make your brand the “first choice”?

The term “customer ownership” is not discussed enough in retail business in Turkey, especially in durable goods market. When the big stores selling the products of every brand, like in some countries abroad, start operating, in other words, when exclusivity disappears, the question; “who owns the customer?” will be very important. The customer will become the customer of the chain stores that sell multiple brands, rather than being the customer of the brand itself.

By the way, are you the owner of the customers who buy your products and surf on your website?

Etiketler: brand, CRM, customer ownership, department store