The consumer direct (CD) channel -- products and services delivered to customers through catalogs, telemarketing, interactive TV, kiosks, Web sites, or mobile devices -- remains one of the most innovative and promising business strategies today. For companies struggling with declining customer loyalty and diminishing margins in a stumbling economy, building and leveraging rich customer relationships can be a real competitive advantage. Studies show we're not alone in this observation: A recent survey of Global 1000 executives by Advanced Marketing Research (AMR) found that 87 percent or respondents are planning to sustain or increase investments in customer-based strategies despite the economic downturn.

Businesses using technology as a bridge to collect customer data that result in relevant, loyalty-building offers will see the greatest ROI; the more companies intelligently and responsibly use customers' preference and purchase data, the more they stand to gain. But using information appropriately can be a big stumbling block for companies looking to succeed in this new commercial landscape. In some cases, their attempts to increase customer interactions and provide more personalized information have only heightened consumer suspicion regarding privacy violations. "In the customer's mind, there's a fine line between attentive interaction and intrusion," says Katherine Kress, senior consultant at Peppers and Rogers Group. "While the CD channel enables companies to interact with customers in a variety of personalized ways, if they don't let the customer control the frequency and scope of interaction, they risk losing the relationship."

In light of this, here are four key strategies for using information properly to build and leverage customer relationships via the CD channel:

  • Prepare for technological change. Understanding how new technologies facilitate the use -- or potential misuse -- of information will be critical for companies that leverage data compliance as an asset;
  • Utilize information to meet individual needs. More than ever, consumers are aware of the value of their information in the marketplace as a form of currency, and are willing to exchange it for relevant benefits;
  • Give customers control over their data and their interactions with your company. Allowing individuals to choose how they want to interact and use their information will help increase trust. Opt-in policies, customer access to profiles, and the option to be anonymous are important; and
  • Create an organizational structure to support data compliance. Appointing a customer information officer to oversee the integration of data across an enterprise is a smart step.

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