One-to-one marketing is an idea that is intuitive to direct marketers. If you address people by name and tailor messages to what you know about them or to interests they have expressed, they are more likely to respond and purchase. Duh!
Implementing one-to-one marketing is easier said than done. That’s principally because there is no widespread data or consensus on how much personalization is sufficient nor on how personalization pays out.
The Web, according to an array of geeks, seers and pundits, is capable of relatively inexpensive personalization using database-driven, dynamically generated, customized content, which yields the potential for marketers to create, manage and sustain customer relationships.
Anecdotally, Patricia Seybold told the National Center for Database Marketing that, for American Airlines, “Web site personalization steadily increased regular logins and bookings … showing that personalization increases both loyalty and revenue.” But she didn’t tell us how they got from “Dear Danny” to loyalty and revenues.
Similarly, Jesse Berst at ZDNet reported that MyExcite, a personalization effort, attracted “several million people who return an astonishing five times more often than regular users.” But do they buy anything or respond to offers faster or in greater numbers than regular users?
Marrying each individual to the stuff they most want to know is the promise.
Cliff Allen of GuestTrack, a personalization software company, says this desired intersection of interests and information creates “a feeling that the company speaks to just me, which we’re all looking for in our lives.”
It sounds too good to be true. For most of us plebes, getting a company to speak just about our account, our bill or our concerns is a nightmare. Unless, of course, we owe them money.
I fear that one-to-one marketing has become an empty cliché in the hands of e-commerce wannabees seeking to raise capital and online expectations. Why? Because no one knows how to implement it at a reasonable price point. For customer acquisition, the incremental cost vs. the lift in response probably won’t pay out.
For fulfillment programs, one-to-one marketing has become a challenge either to superficially slap a customer’s name on a message or to go through an expensive, tedious profiling process which could customize content for each potential recipient.
The big questions are: Is it worth it to customize message or content? At what point does the added cost net diminishing returns? And if the prospect has already shown interest by calling, mailing or clicking, will the added impact of personalization expedite the sale or just add expense?
No one is sure if personalization means calling a customer by name, providing content based on information provided in a questionnaire or by dynamically serving content based on past site visits or page view sequences. I haven’t seen any data to suggest whether the last two tactics yield greater customer satisfaction or conversion. I do know there are growing numbers of cybernauts who consider the latter technique snooping.
As if these choices weren’t confounding enough, they are further complicated because context and tone affect the perception of personalization.
Lifeminders (www.lifeminders.com) and Blockbuster Video (www.Blockbuster.com) both address me by name. But since I spend barely a few seconds reading the e-mails, the impact of seeing my name is negligible.
In contrast, Infobeat (www.Infobeat.com), which I rely on for my clients’ daily stock prices, my daughter’s horoscope, Knicks and Steelers box scores, and daily Internet news, never uses my name. But because they deliver exactly the stuff I’ve specified, I don’t miss, nor do I expect, a personal greeting. The same holds true for Larry Chase’s Web Digest for Marketers. I’ll take the information. Forget my name.
Travelocity’s Fare Watcher (dps1.travelocity.com), while robotically monitoring flights to Hawaii and to grandma’s house, hedges its bets by addressing me as “Apparently to [email protected],” which points to the need to get the data right. We are all closet egomaniacs. The first thing we look at in any communication is our name. Spell my name wrong and you immediately alert me you are a stranger, someone who can’t be trusted with key facts about me.
Super sales coach Jack Carroll starts his e-zine by calling me “Danny.” I almost hear his voice when I click on the e-mail and I hear the text as if it’s being delivered as a pep talk. Yet when the Passport Wine Club (www.topwine.com) greets me with “Bonjour Daniel,” it provokes an acid flashback to elementary school French class.
There is evidence that personalization without live contact falls flat. NFO Interactive surveyed 2,321 cybershoppers, half of whom claimed they’d spend more money if they could talk in real time to a customer service rep while they browsed a Web site. One in six who had never purchased online claimed they would become buyers if they had real-time contact.
This sounds right, especially for newbies. But it’s far from the low-cost solution. In fact, it’s the opposite because you incur the cost of Web tech plus the cost of live operators and a Web-telephony interface. Given that most marketers direct prospects to the Web to promote do-it-yourself buying and to reduce the cost of sale, this survey turns that assumption on its head.
And so we’re left with a series of pivotal questions. How much is enough to pay out? How little is necessary to begin a dialog? How many dollars shall we risk up front?
Determine the answers and you’re on your way to striking the right balance of personalization for your company.