One-to-One Marketing Gain Share of the CustomerTechnology and a theory of marketing that one observer called "formalized common sense'' have advanced the practice of targeting top customers to the level of targeting every customer as an individual.
Don Peppers and Martha Rogers will be honored as Direct Marketers of the Year at DM Days New York next month for their theory of one-to-one marketing, yet it is the companies that understand how to put the theory into practice that will reap the true reward: the lifetime customer.
These one-to-one marketing campaigns seek to gain a share of the customer rather than a share of the market. By fostering a learning relationship with the customer, companies can develop products for existing customers rather than follow the traditional model of developing customers for their products.
Three capabilities make this one-to-one approach possible: sophisticated databases, interactivity spawned by the Internet and mass customization via digital printing. As the customer relationship grows and an individual database is built, this information can be linked directly to a digital printer that can customize a mail piece based on hundreds of known characteristics.
AGFA, Ridgefield Park, NJ, manufactures digital printing products, systems and educational materials to make one-to-one marketing work. The AGFA Chromapress printer, for example, can change not only the customer's name but also the text, graphics and layout on the same print run.
"Chromapress creates printing plates on the fly that allow everything to be changed,'' said Will Mansfield, AGFA market development manager. "The only limit is the creativity of the agency and strength of the database.''
The driver of this database-printer dynamic is a design template that gives agencies the power to create documents in a format required for variable data printing. The AGFA template, Personalizer-X, works with QuarkXPress and other vendors offer solutions for other design software like Adobe Pagemaker and Multi-Ad Creator.
The actual production of personalized marketing materials, however, is merely the finale to a long process. Marv Black, director of marketing services for Novartis Seeds, Inc., Minneapolis, MN, which will see at least a 20 percent increase in sales this year because of a variable data printing campaign, warns that one-to-one marketing won't work without a deep database.
"Don't try to do this all at once,'' Black said. "We took three growing seasons to build our database. We don't capture information unless we know how to use it.''
Novartis requires its regional dealers to put information into a database as they build relationships with their customers. The company learned enough about their customers to produce a catalog with 7,000 different versions. Each catalog contained one of six different illustrations of the type of farming the customer did and the color of tractor -- red or green -- he drove.
Farmers originally received a 36-page catalog that they would go over during a meeting with their dealer. Black said the practice of mailing customized six-page catalogs right before a scheduled sales call made three to four sales call feel like six or seven.
By delivering only what the customer wants, one-to-one marketing eliminates the waste and storage costs of unsold inventory and in the case of on-demand printing, outdated marketing materials. Peppers pointed out that British Airways saved more than $5 million last year by controlling onboard inventory with software in airplane galleys that tracked the use of amenities.
In the one-to-one model, marketing directions reverse and customers become the ones pitching their needs to companies. This make the need for actionable information about a customer greater than ever before and expands the function of information service providers.
"[One-to-one marketing] creates a whole new market for list brokers and database managers,'' Mansfield said. "The role of lists and data mining will take off.''