If you think good customer service leads directly to customer satisfaction, think again.

These days, it's all about "customer delight," says Sheri Bridges, a marketing professor at Wake Forest University in the United States. She defines a "delightful" consumer experience as one so personalized that an individual's preferences and needs are taken into account.

Known variously as customer relationship management (CRM) and one-to-one marketing, personalization is being practiced by large and small across all sectors of the economy. It relies on technology (personal computers, database-management tools, and the internet) to give marketers greater access to and knowledge of their customers than ever before.

This ethos is one that cannot be "installed" at a business, says Martha Rogers, a principal with partner Don Peppers in the Peppers & Rogers Group and a leading CRM guru. It must be "adopted" as an integral part of the company's customer service culture. For sake of explanation, a personalized approach to customer service can be broken into three steps: identifying the customer, learning about the customer, and serving the customer. Be on Target with Your Marketing

"The essence of good customer service is good targeting," Bridges says. The message here is simple: You don't want to lavish personal attention on customers who aren't going to reciprocate by being consistently good purchasers of your product or service." Go after consumers who appreciate the benefits offered and who show their appreciation by being willing to pay for those benefits," Bridges says.

Here are two keys to targeting the right people:

• Stop thinking in terms of market share. Instead think of "customer share," of how much loyalty and money an individual is willing to spend on what you're selling. The goal of personalized marketing should be to boost customer share.
• Learn to identify "bad" customers. Customers who only buy your product when it's being sold at a discount, who otherwise buy from your competitors and who, when they do buy your product, constantly complain about it are not worth your time and attention.

It's one thing to identify a loyal customer; it's another to cultivate that loyalty. To do that, you have to know your customers. Knowledge is Power. "To win a customer, you've got to know this customer better than any competitor," Rogers says. Here are three tried and true ways to learn more about your customers:

• Give them an incentive to share information about themselves. Rogers says this is what one retailer, Zane's Bicycles, did when suddenly faced with competition from two national outlets. Zane's offered each of its 35,000 customers free bicycle maintenance for a year in exchange for the answers to some "relationship questions." The retailer used the information to draw up a profile of each customer, which guides its one-to-one marketing effort. Not only has Zane's held its own against the competition, but its growth has accelerated.
• Talk to your customers in a meaningful way. "Making chat and noise is not what I mean," says Ron Zemke, who has written 25 books on customer service in the last two decades. "I'm talking about getting real feedback. Say to the customer, 'Look me in the eye and tell me the truth.'" But remember that such feedback only becomes valuable when it's acted upon.
• Use technology to extend your reach. An internet presence can be a powerful customer service tool. In addition to using the website to elicit customer feedback, businesses can reach out using email. Entrepreneurs seem to be catching on: A 2001 survey of internet use by the Gallup Organization found 37% of the 500 companies surveyed had a website, with more than half of this Internet savvy group exchanging daily email with customers.

The more you know about your customers, Rogers says, the easier it is to ensnare them in "friendly entanglements" that make switching to a competitor much more difficult. Technology makes it possible for these individual entanglements to be institutionalized across the whole of a company, no matter how many business sites it operates.

She's quick to add that there's no reason small businesses can't benefit from technology as well. "There's a lot of technology that's extremely affordable, and there are always ways to [improve upon] what you're doing," Rogers says. "Think of who your customers are and what you need to do to reach them." Be Masters of Your Universe

In delivering the product or service that lies at the heart of the business-customer relationship, small businesses are at both an advantage and disadvantage. "They have more of an opportunity because they have immediate control over everything. They face more of a challenge because they lack resources," Zemke says.

"They can have an idea and put it to work without it taking seven years and 42 approvals. But they can't necessarily achieve the degree of performance that a company with 8,000 branches can."

To leverage its competitive advantage in the area of control, Zemke says, small business should pay attention to three variables:

• Place - Whether it is through a brick-and-mortar shop, a catalogue or a website, the channel(s) you use to do business should be as compatible with what you sell or do as possible.
• Process - These are the "rules, policies and procedures" that guide and govern a business and directly influence the consumer’s customer service experience. The tremendous advantage a small business has, Zemke says, is that it "can change the rules until it gets them right."
• Performance - This refers to the "style" of transactions and interactions, whether in-store or online. Where customer service employees are concerned, the best teacher is the entrepreneur's own behavior, Zemke says. Being a good role model can have a significant impact.