Explore the Strategy of One-to-One Marketing
“Hi, Joe. That’s a venti half-calf latte with skim, no whip, right?”
Going out for coffee has become somewhat of a sophisticated art form…or maybe more of a complicated science. It’s progressed from “Black or cream and sugar?” to a myriad of combinations of strength, sweetening, dairies, and toppings. It’s also become a heated competition for the coffee drinker’s dollar. The baristas who have become experts in remembering the names and java formulas of regular customers boost the reputation of their stores above the competition.
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That personal touch of remembering a customer’s tastes and preferences is called one-to-one marketing. It’s become an effective and widely used form of marketing, although it’s usually a computerized database—not a person—remembering the customer’s personal preferences. Many online retailers and retail stores have developed sophisticated systems of tracking the customer’s clicks, visits, and purchases in order to create a unique marketing plan for each one of them. (See also Closed Loop Marketing)
One-to-one marketing (also sometimes written as 1:1 marketing) is a strategy that relies on getting to know the individual choices made by a customer, and then tailoring marketing outreach to each customer differently based on those choices. It’s an approach that is not used to get the customer’s attention, but to keep their attention and their business.
There are two basic types of 1:1 marketing:
As Internet shopping has become more and more prevalent, so has one-to-one marketing. Customers returning to the sites of online retailers where they’ve previously made a purchase will many times find a “Suggestions for You” message waiting for them. In addition, they may receive a follow-up email with those suggestions for additional purchases.
Amazon, Netflix, eBay, iTunes, and many other online retailers have developed sophisticated 1:1 marketing systems that follow and track each customer’s every click, recording and categorizing every purchase to develop a personalized customer profile based on those click patterns and purchases. (See also Personalized Marketing)
With that data, the companies then develop marketing plans that are different and specially written for each customer. It’s essentially a computer-database barista welcoming you every time you the visit the site with a personalized suggestion for what you might like to purchase.
Michael Dell began selling customized computers from his dorm room in the early 1980s. By 2001, the company he started had gained the leading share of the global PC market. Dell was a revolutionary company in terms of one to one marketing. Its success was founded on the principles of customization, allowing each customer to tailor their personal computer to their own personal needs and preferences.
Internet retailers aren’t the only 1:1 marketers, however. Even large, seemingly impersonal retailers—such as grocery-store chains—have developed methods of designing personalized marketing plans to build loyalty.
The key to developing a successful 1:1 marketing plan is to create a data system for learning and remembering the tastes and purchase patterns of each and every customer. Methods for doing this will vary based on how the company interacts with its customers.
In the case of online retailers like Amazon, data is collected by capturing the consumers’ general information and connecting it to records of all of the items that customer has viewed and purchased. This creates a unique profile for each customer.
When the product or service is purchased in person, building a system of data collection requires more work and creativity. More and more, companies are using some form of a customer ID card to help develop a database that can be turned into personalized profiles.
The Kroger chain of grocery stores, for example, encourages shoppers to sign up for a “preferred customer club” card by offering lower prices to customers who use the card. Customers sign up for the card by giving their basic contact information—name, address, phone number, email address—and then every time they make a purchase, they “swipe in” with their card, which allows Kroger to record, store, and categorize every grocery item purchased by each club member. With that information, the company develops a 1:1 marketing plan for each customer and sends them coupons and promotions for items that they customer frequently purchase. (See also Scientific Marketing)
Some businesses also develop 1:1 marketing plans that allow each customer to customize the product themselves, based on individual preferences. Instead of collecting and storing information on each customer, the customer the essentially designs their own product. The coffee shop equivalent would be serving the customer just the coffee and letting each one add their own sweetener, milk, and toppings. Self-serve yogurt shops are a recent trend that has taken this approach, providing a variety of flavors and toppings to choose from and letting the customers build their own customized cup of frozen yogurt.
What do they do?
Conversion rate optimization is the process of marketing to visitors of a website and “converting” their visit into a purchase of a service or product. Effective CRO analysts will be familiar with website design and infrastructure, and specialize in making recommendations for online structures to support personalized, one to one marketing plans.
In order to be considered for a position as a CRO Analyst, candidates will generally be expected to hold a bachelor’s degree in marketing, finance, or statistics and have 1-3 years of related experience.
What do they do?
Market research analysts research, analyze, and report on the consumer data that has been compiled in order to help inform the 1:1 marketing strategies. Effective market research analysts have a strong familiarity with the different types of research options, expertise in gathering and analyzing data, and excellent communications and presentation skills.
Most market research analysts have earned a bachelor’s degree in business, statistics, or one of the social sciences and have 1-3 years of related experience.
What do they do?
The senior manager provides strategy insight and presents new ideas on multiple 1:1 marketing campaigns. This role is also generally responsible for evaluating the success of different strategies and campaigns and must have the ability to garner consensus across all parts of the organization.
Senior managers will need to have broad-based experience working in many levels of different marketing projects. A minimum of a bachelor’s degree in marketing or communications is required, and some positions will require a master’s degree. Candidates for the position of senior manager of strategy will be expected to have at least 10 years of marketing experience.
Any company that uses one-to-one marketing strategies extensively will value employees with a background and education in collecting and analyzing consumer data.
Marketing schools help students gain that background by providing general and in-depth courses on statistics, data analysis, and economics. These courses help students understand how to organize data on website traffic and purchasing patterns, as well as how to translate the raw numerical data into a storyline that describes a customer’s spending habits and product preferences.
Additionally, students will also take extensive courses in marketing principles and strategies, which are critical to determining the best approach to take in developing 1:1 marketing plans. Marketing courses also often require classroom projects using real-world scenarios or offer internship opportunities that allow students to do work alongside professionals in the field that gives added relevance and impact to their coursework
For more information on how a marketing degree can help you become an accomplished 1:1 marketing professional, contact a range of schools that have a marketing program and request details on the courses and internship opportunities they offer.
The chart below shows annual book sales in billions for the two biggest retail store chains (Barnes & Noble and Borders) and the biggest online book retailer, Amazon.
In 2002, the stores combined for about $7 billion in book sales, compared to Amazon’s less than $2 billion. By 2007, however, Amazon’s 1:1 marketing approach and the ease of using its site propelled it to even with Barnes & Noble and well ahead of Borders. In 2010, Amazon’s $6.8 billion in books sales was more than Barnes & Noble and Borders combined.