George S. Day and Christine Moorman

Happily ever after: Staying close to customers

Friday Oct 15, 2010

Many companies overlook the fact that their most valuable asset is customer relationships. These relationships offer two things to companies. First, customer relationships give companies more intimate knowledge and deeper insight into customers’ unmet needs, how much they will pay, and future growth opportunities. When a company is close to a customer, it has access to a gold mine of information. Second, customer relationships give the company a leg up when introducing new products and services. Customers will look to current providers for more engagement in order to minimize costs and because they trust these firms. Most companies don’t think this way and leave money on the table.

The Knot (theknot.com) is a company that understands these lessons well. The founder, David Liu, describes the way the company has evolved with the customer as marketing “against time lines.” The Knot was launched as an online wedding-planning resource for brides-to-be, but it has evolved into a self-described “life stages media brand” that targets 25- to 32-year-old women who are moving into a period of rapid change involving marriage, home, and kids. The Knot began by collecting data when brides-to-be would register on the wedding site. Because post-wedding life stages tend to follow a predictable pattern, the company found it could target its customers with event-centric products, services, and resources over time, tied to the stages that were bound to follow, including home buying (The Nest, thenest.com) and pregnancy and baby gear needs (The Bump, the bump.com).

The Knot strengthens its bonds with customers by partnering with vendors that can fill in gaps. The Knot mines its customer information and then shares it with these vendors. In its privacy statement, The Knot discloses that it “does share names, postal addresses, and demographic information with other prescreened organizations that have specific direct mail product and service offers we think may be of interest.” Rather than irritating customers who fear being flooded with junk mail, sharing data helps The Knot maintain active, long-term relationships with its customers as their needs change over time. The strategy is paying off, as the business has continued to grow over its 10-year life to the point where 80 percent of would-be brides are clients and they report that 20 million brides have used The Knot to plan their weddings.

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