New Way of Handling a Product Recall: Work your customer database like nobody’s business, and reach out to individual customers from a “we’re in this together” perspective.

A story on MSNBC today claims that Costco has been culling its member database to determine which customers purchased products related to the latest peanut paste recall scare:

The giant warehouse retailer was dialing Lowder to warn him that two brands of peanut butter sports bars he bought for his kids had been recalled as part of a growing salmonella food poisoning scare.

“They’d scoured their database and found any members who had purchased Clif Bars from them and then called them to let them know that they should
dump those Clif Bars,” said Lowder, a 45-year-old marketing consultant, who bought those snacks and some Zone Perfect Bars as well. ‘Did I mention I love Costco?’”

All it cost was the price of setting up a customer filter and a robo-call system.  I can guarantee you that for every penny spent, it will be returned hundredfold in future customer loyalty dollars.

How thorough is your database? How are you using it not to sell to your customer, but to help them?  It’s a strong way to build an iron-clad marketing strategy on a shoestring budget.

By contrast, only 30 percent of men consider low prices to be a top reason – convenience and proximity rate higher, at 41 percent.

In the past, I would have found these statistics on women a little hard to swallow.  If we’re talking about marketing to women, isn’t creating a relationship the most important thing?  Aren’t you supposed to work hard to connect with the right side of the female brain, which is all about bonding?  Shouldn’t it be all about the “experience” you’re giving your customer?

Well… yes and no.

With headlines that shout the latest news on failing mortgage companies, record-setting oil prices and the dreaded R-Word, it’s obvious that we’re settling in for a bumpy ride on the big yellow economy bus.  People have less money to spend, but more choices than ever about where to spend it (thank you, Internet!).  So, when push comes to shove and people are tightening their belts, low prices are going be in the driver’s seat.

Roy H. Williams would tell you that this next era in business will be about efficiency – running the tightest, most cost-efficient show around, ridding yourself of extraneous materials, programs, and even staff.  Doing whatever you need to do in order to keep your prices as low as possible without giving up those values that are the core of your company.

But here’s what I believe (and I’m willing to bet that Roy agrees):  you can advertise the lowest prices in town and offer coupons up the ying-yang.  But your customer is still subconsciously looking for more because she has a need to plant that seed of loyalty somewhere.  If your parking lot is too small, if your staff isn’t on their toes (not to mention helpful), and you run out of advertised items once too often, she’ll go elsewhere – even if it means she has to pay a few pennies more for that gallon of milk.

These next couple of years will definitely be about getting the most value for your shrinking dollar.  There’s no doubt that female consumers will shift slightly toward “transactional” mode, and now is the time for you to take a long, hard look at your operational structure to determine how to streamline.  But don’t neglect building a relationship for the sake of low prices.  After all, it’s still only 48% of women who said that price and coupons were the most important to them (and that’s for a commodity like groceries).  Those businesses that succeed in the long run will be the forward-thinkers who walk the tightrope of low prices and excellent customer experience.

Think it can’t be done?  There’s a company that’s been doing it for years. 

Its name is Costco. 

Hop in your car later this week and check them out.  Thirty focused minutes in a Costco could be some of the best business homework you’ll ever do, and could place you in the driver’s seat of your industry’s big yellow bus.