The Correct Fit for One-to-One MarketingA recent article by an outside contributor ("Here's Some Great News About One-to-One Marketing," April 19) -- grossly distorts comments I had made in a prior DM News column ("Great Myth About One-to-One Marketing," Jan. 18). First, I noted that even the renowned Don Peppers himself, the one-to-one marketing maven, agrees with me that true one-to-one communication is not practical or desirable in many instances. Second, the author of the article incorrectly disparages the "litmus test" that I offered to determine where one-to-one communication fits and where it does not: Companies must first weigh whether the cost and effort of communicating with a customer on a one-to-one basis exceeds the lifetime value likely to be obtained from that customer. For example, a large percentage of a bank's customers are unprofitable and are likely to remain so. I would not advocate that this bank invest heavily in personalized communications with these individuals.
While the industry tends to leap to the next buzzword that's going to solve their problems, the key issue is not one-to-one marketing, but whether you have a process in place that can employ one-to-one where appropriate. In my article, I clearly note that one-to-one is a critical goal and direction for all companies. There are plenty of appropriate uses and applications today for one-to-one marketing - Amazon.com being the showcase example. Yet, it is preposterous for the author to label as antiquated campaign management techniques that identify high-profit customer segments with similar characteristics and then execute, assess and refine highly targeted campaigns aimed at those individuals. I dare the author to tell that to leading technology innovators such as Federal Express, CitiGroup, Sprint, Bank of America and other companies that must communicate daily to hundreds of thousands and millions of customers.
The success of one-to-one initiatives is growing rapidly. Yet, many firms today must accept a sensible compromise -- the use of propensity models and segmentation strategies that narrow millions of customers into smaller, targeted groups, who can be treated as individuals across channels. Even e-business companies such as Amazon are moving back to these so-called "antiquated" techniques, realizing the limitations of one-to-one marketing against mountains of data and customers being collected. Like true one-to-one marketing, closed-loop campaign management strategies capture individual customer behavior, enabling companies to continuously learn how to best treat customers in order to optimize customer value. As long as industry pundits suggest that there's a silver-bullet solution, we're all in trouble. Don Peppers correctly points out that this stuff is essential, but hard.
Exchange Applications Inc.