New ways to gauge customer feelings and attitudes are increasingly complementing numbers-oriented methods, although companies should never take an either-or-approach, according to Wharton faculty. “Thanks to technology and other innovations we know far more about our customers than we ever did before, but I would contend that we don’t understand more about our customers than we did 40 years ago,” says Wharton marketing professor Peter Fader. “We can put each customer’s order on a microchip, but as far as having a sense of what’s inside making him tick,” the answers remain elusive.
New technology to gather and process data can be overwhelming for marketers, he adds, noting that some companies are tracking consumers with radio devices and installing video cameras in homes. “It sounds compelling [as a way] to understand how people are using and consuming the products, but in the end you have miles of videotape,” says Fader. “It’s not a complete waste of time, but it’s a matter of knowing when to say, ‘When.’”
Companies need to weigh the benefits of launching huge data projects against the cost. If the payoff isn’t there, Fader suggests, then marketers risk a backlash in which general managers give up trying to understand the customer at all and rely solely on quantitative information. The end result could be that “the marketing function shrivels up and goes away and gets replaced by order-takers or inventory control specialists.”
Fader points to Wal-Mart’s technological focus, which has been used to wring costs from the company’s supply chain, as one effective strategy.
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