Hitmetrix - User behavior analytics & recording

One-to-One Marketing: It's Not a Myth

It's interesting to observe CRM software vendors pontificating about companies applying a litmus test before they decide which customers, if any, are worthy of one-to-one marketing efforts. The real value, we've been told, lies in increasing marketing cycles by focusing not on customers as individuals, but on old, early generation, segmentation-based campaign management technologies that will improve marketing velocity over mass methods.

Few successful companies ever seem to settle for what's good enough right now; instead, they focus on the opportunity presented by real vision and swing for the fence.

Clearly, Don Peppers and Martha Rogers of “Enterprise One to One: Tools for Competing in the Interactive Age,” are pointing the way toward the one-to-one direction. And they're pretty clear about it. In the preface they write: “This [one-to-one marketing] is a strategy that requires a business to manage customers individually rather than just managing products, sales channels and programs.”

You don't find these thought leaders advocating litmus tests or compromises about whether to attempt real individualized marketing.

And, if your company moves toward CRM as Peppers and Rogers suggest, but does it with an inherently compromised technology that substitutes velocity for actual individualization, you risk obsolescence before implementation.

Today real individualization is not only possible it's an economic imperative that presents real opportunity to those who take advantage, and often at less cost than old first-generation technologies. Of course, that's just a by-product of the ongoing progress of technology coupled with deep CRM experience.

We all know that the goal of CRM is to create a fuller and more satisfying customer experience so each customer brings us more of their business.

In addition to the increase in business, we also get lower promotional costs, better ability to plan for merchandise, faster inventory turns, less on-sale selling, more effective locations, more predictable results and a much lower susceptibility to recessionary or competitive pressures.

But how? Here's an example.

Amazon.com has begun to send e-mail to customers who've not purchased lately. Here is an excerpt from their message to me:

“We noticed that you haven't shopped with us in a while (at least with this e-mail address) and we thought we might be able to help you discover your next book or CD. For your browsing pleasure, we've included the top five titles from our book and music lists below. (At least, these were the top five as of when we sent this message).”

What if they wrote this instead?

“We noticed that you haven't shopped with us in a while (at least with this e-mail address) and we thought we might be able to help you discover your next book or CD. We've searched our shelves for some things you might like. Here they are:

* “Inside The Sky,” by William Langeweische;

* “Enterprise One to One,” Peppers and Rogers;

* “Long Black Veil,” The Chieftains

That last paragraph is individualized in its content for me, based on my past transactions. We call this exact-transaction CRM, and it's a powerful force available to every company today: to individualize offers and pricing to each customer.

It delivers higher response rates and more sales because it makes buying easier, more fulfilling, more customized; and it maximizes the value of the relationship Peppers and Roger have foreseen for successful, competitive companies that strive for the best.

Here are a couple of guides for individualized, exact-transaction CRM.

* Offer every customer merchandise and services uniquely for him based on his previous transactions. This means true individualization, not just personalization. In the words of Don and Martha, “talk to me as individual.”

* Listen and react to what the customer says and does, or doesn't do, with each offer. Trigger unique responses to each person.

Analyze individual reactions and then aggregate them for analytical reasons so you can both draw conclusions and maintain individuality.

Establish tests for every campaign. Tests give you a clear picture of the variables that impact the success of a specific offer or promotion. Combined with individual customer reactions, understanding these variables will help you zero in on the elements affecting response rates and provide guidance for creating future campaigns.

Pay attention to the opportunity to measure every day. Find out who is responding and how early in the campaign process they are responding so that you can respond proactively.

Leverage what you know about your customers. Offer them the opportunity to automate triggers that generate new opportunities for shopping. Reminders about birthdays, anniversaries, holidays and other special occasions are just one example of a customer-specific communication that provide a higher level of service.

All the information you need is available, now. Building intelligent campaigns based on these steps will put you on the road to one-to-one marketing without compromise or regret.

Tim Keane is the president/CEO of Retail Target Marketing Systems Inc., Waukesha, WI. His e-mail address is [email protected]

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