The One-to-One Marketing Myth

We have all fallen into the “one-to-one” marketing trap. Songwriter Randy Newman once penned, “One is the loneliest number,” yet we promote one-to-one marketing as a strategy to be embraced.

Who is one and who is the other one? Me? You? Him? Her? It can’t be “us” by definition, because “one” is singular.

When Group 3 Marketing was formed over 10 years ago, our central theme was about marketing in the 1950s, how the grocer in my home town used to address my mother by her first name and phone her when he got some great steaks. The druggist was Dave. The fellow who delivered the coal was Al.

Marketers continue to reflect about this as the simplest form of marketing. Those were the days before expressways, covered malls, and retail chains. The channel was simple and direct. We were not part of any database. We were not mined, stratified, put in deciles, cells, or segmented.

“One-to-one” became popular more than a decade ago, when industry experts and consultants made it the hot buzzword. None of them were in their twenties or thirties. Maybe it was nostalgia for the days when we practiced such “personalized marketing.”

But these examples from the past were not marketing. They were service. Vince provided a service; Mother responded with a purchase, and was dismayed when a supermarket chain moved into town and drove Vince out of business. Maybe it’s because no one called her when the meat in the self-service cooler was good.

Walking into a retail store today is often a challenge. The consumer is bombarded with marketing images. The level of service ranges from unbelievably excellent to unbelievably poor – often within the same store and always within the same chain.

In the business-to-business setting, similar dynamics apply. Sales people are a dying breed, replaced by faxes and e-commerce. Sales productivity, not performance, is too often the measurement tool. Sales personnel are often too busy putting out brush fires to concentrate on the art and science of selling.

UNENDEARING TERMS

“Dear Valued Customer” is not one-to-one marketing. “Dear Mr. Foreman” only moves the needle forward a tad. “Dear Bart Foreman” moves the needle back. “Dear Bart” opens the door to relationship marketing, although some customers complain that’s too friendly.

However, even the “Dear Bart” salutation is not one-to-one marketing. Unless the author really knows the buyer, one-to-one does not exist. How many marketing communications are signed by a senior executive that you don’t know? Too many. Maybe if the communication originated from the local store manager, branch manager, or sales person, it would approximate one-to-one – but then it becomes a service again.

If I receive a letter from John, my local True Value store owner, reminding me that Scott’s Weed and Feed has arrived and is only $17.99 a bag, that would be one-to-one service. (If the president of True Value sends the same letter, it completely loses the one-to-one flavor.) It’s a great communication if True Value knows I bought Weed and Feed last year. But what they may not know is that I just hired a lawn service.

We manage some powerful database-driven, relationship-marketing programs for our clients. All have the overriding objectives of driving frequency and building individual consumer sales, which add to our clients’ mix of creating sustainable, profitable growth. But it’s a bumpy road. Client service has become the art of compromise. For example, one client has almost 1,400 stores, so management says it’s impossible to keep a list of store managers current and all communications come from the vice president of marketing. The net result is that one of the “ones” in one-to-one marketing is a faceless manager in a big company.

Conversely, in another program we manage for professional beauty salons, we are able to personalize each communication with the name of the manager, and the feedback from members is much more positive. Communications must be personal to bring the “ones” together.

Our focus over the years has changed from loyalty marketing to relationship marketing. We have seen that a rewards-based marketing program supported with on-going communications and sprinkled with soft benefits will keep shoppers returning. And that’s the ultimate objective: to gain share of wallet – not through fake one-to-one strategies but sincere communications that don’t over-sell or over-promise.

NET EFFECTS

E-commerce and Internet communications will bring buyers and sellers closer together electronically. But will this be the end-all answer to one-to-one marketing? No.

The Internet is another channel in the distribution and communications process companies use to reach customers. Dotcoms are already using advanced profiling techniques to direct messages to customers based on previous purchases, demographics, and lifestyles. But the fact that I purchased a Smashing Pumpkins CD for my nephew’s birthday does not necessarily mean that I am a likely buyer for the band’s next release. Once again, dot-com marketers are trying to replace old-fashioned service, which was based on face-to-face customer interaction, with new technology.

So what do marketers do as they enter the 21st century?

1. Get over it. The old days are gone. One-to-one service will only exist through direct interaction between sales associates and customers.

2. Instill a powerful one-to-one service culture in every employee through customer-centric policies and training. Central to this tactic should be a database-driven marketing program that allows you to identify, track, reward, and thank your customers for their business and provide a platform for supporting your front-line sales team.

3. Be smart. Utilize your program to create customer-friendly reminders and offers that stimulate repeat business – to build share of customer, not share of market. Rather than recommending certain products based on past purchases, deliver offers that cause the buyer to want to buy more from you. This is where careful analysis of a customer’s long-term buying habits can be used to generate incremental sales.

4. Humanize your database. Put as much data as possible into each customer’s record. Look for similar attributes in customer clusters. Then split apart those who exhibit positive buying patterns from those who do not, and focus on tactics that will make the second group behave more like the first.

5. Don’t take yourself too seriously. Communicate with customers like they are friends. Make letters, postcards, newsletters, and e-mail messages fun and interesting. In the world of relationship marketing, it’s OK to do this – but keep it clean and watch that your style of humor isn’t offensive to others. And remember to always be positive.

Every customer has potential: Your best customers have the potential to leave; your marginal customers have the potential to buy more; and other consumers have the potential to buy. A carefully crafted relationship marketing strategy, coupled with a customer-centric focus from your front-line sales associates, will bring marketing and service closer together. The end result should be sustainable, long-term growth one customer at a time.