Should you ID your VIP customers?

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(MoneyWatch) Several years ago, preparing for a new job, I walked into the Armani store in London in search of a suit. As usual, when out shopping, I was not elegantly dressed, reasoning that I didn't want to wear my best clothes if they were doomed to spend a few hours on the changing room floor. The consequence of my pragmatism was that I was treated with quiet contempt by the sales staff, who clearly expected no sales from someone so poorly dressed. In equal parts, I was annoyed by their snobbishness and delighted, when buying several suits, to confound their stereotyped expectations.

New technology promises to correct their mistake. Using facial recognition technology, companies like NEC IT Solutions are promising to be able to identify VIP or high-net-worth customers as they walk through the door. The idea is that, once identified, they can be given devoted and ingratiating service; hoteliers can address them by name and retail assistants can anticipate what size clothes they will want.

VIP identification software is currently under trials in hotels and top stores in the U.S. and Europe. It is the ultimate customer-relationship-management technology, spotting high-value individuals before they've even identified themselves. It was demonstrated recently at London's Counter Terror Expo, where visitors' faces were matched to a database even when wearing sunglasses and head scarves.

This facial recognition technology is impressive; I just wonder if it's really all that smart. I can see that it helps to identify existing high rollers, but what it can't do is pinpoint the individuals who may, one day, be your biggest buyers and evangelists. If you decide to provide one class of service to the big spenders and treat the rest with indifference, you will actively discourage the very people who might one day be your biggest supporters. This technology doesn't prevent the "Pretty Woman" scenario, in which a prostitute (played by Julia Roberts) shopping for clothes is treated with contempt. It promises to increase the frequency pf such incidents, with those in the rich database catered to lavishly while the rest are ignored.

What great companies do is simple: They provide outstanding service to everyone. That's what the staff at Armani hadn't been trained to do. I still love my Armani suits. But I haven't been back.

  • Margaret Heffernan On Twitter»

    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com.

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