Reach the Promise of One-to-OneFor several years, marketers have grown increasingly excited about the promise of one-to-one communications. There are plenty of stories to whet the appetite. Have you heard the one about Bruce Springsteen? Ticketmaster targeted e-mails for the Boss's national tour based on concert-goers' buying history and geography. The payoff was a 47 percent response rate and, better still, a 20 percent buy rate.
Frank Romano, a professor at Rochester Institute of Technology, was quoted recently as saying that customized direct mail, when the customization is delivered in full color, gets response rates on average of 23 percent, compared with the normal direct mail response of 1 percent to 2 percent.
So why isn't everyone jumping aboard? Impediments have blocked execution, primarily around data quality, collection and maintenance on the one hand, and easy-to-use and reasonably priced tools to execute campaigns on the other.
Progress is being made in both areas.
On the data front, companies are collecting and maintaining increasingly useful and clean data fields. Such elements as purchase history, channel preferences, buying decision-maker information and promotion history are captured and made accessible through great new tools such as data marts and data warehouses.
Once collected, the data can be mined using the new software designed to analyze, identify and select the variables that drive the marketing results, whether they are purchase, inquiry or repeat purchase. Data mining lets marketers communicate with the most likely prospects, then tailor the communication to be optimally relevant to each one.
Relevant, personalized messaging is the key to one-to-one communications. Once the data have been collected and selected, the next step is to develop the right messaging. There are scores of variables to play with. The trick is selecting the most powerful, those that will catch the attention of prospects and stimulate them to act.
It also is important to select the right communication channel. Most marketers need to operate through a number of media, whether direct mail, e-mail or Web site. The channel choice will depend on factors such as the customers' stated preference, the efficiency of a particular medium and the availability of, say, an e-mail address.
By now, we know that different media have different roles in the communication mix. People like personalized, relevant communications, but they do not want to receive all their messages electronically. A recent study from Peppers & Rogers Group, Norwalk, CT, and Pitney Bowes, Stamford, CT, found that 34 percent of the 350 households surveyed preferred to receive direct mail for establishing a relationship with them. Only 4 percent favored e-mail. It is no surprise then that many e-mail marketers are moving to add printed direct mail to their personalized communications strategies.
Planning and executing personalized communications across a variety of media have been difficult, since each medium is typically planned and executed separately. A direct mail campaign, for example, is usually developed apart from an e-mail campaign. Names are selected separately. Creative is developed independently. Production processes are different, often on parallel tracks, and consume considerable duplicate expense.
But in a one-to-one world, where the customer is put in the center, you need to approach campaigning in a new way. New desktop tools are emerging that allow simple and efficient development of campaigns across digital variable print and electronic media channels. Campaign planners, whether they are strategists or creative people, can select the right visuals and copy for each prospect, then select the right medium and design the message to take full advantage of the power of personalization.
For example, in the auto industry, you might send a personalized lease extension offer to your existing owners who have leases. A mail piece would include a pre-populated form with the owner's specific contract information and customized incentive offer. The copy and visuals would show the owner's car model and color. The dealer information would also be variable, and there would be further opportunity to customize the message and offer by the recipient's lifestyle, location and whatever made sense. For easier fulfillment, the same form might be available on the Web, or via e-mail.
In this example, one-to-one is fully realized. The company makes the most of its customer data, and customers feel that the offer is tailored to their needs in a relevant, personal way. This is how to lift response and maximize customer relationship profitability.