[Quick note: I’m going to experiment with what I call some short-form blog posts. Being an analyst, I tend to want to explain my reasoning in depth. Sometimes, however, I just want to get out a sharply worded position or observation, so I’m going to intersperse my longer pieces with some of these quick hits. Let me know what you think.]
Some 20 years or so ago, in the early days of the Internet, marketing consultants Don Peppers and Martha Rogers came up with the notion of 1:1 Marketing. The core proposition behind it is to treat consumers like individuals. Sounds good, right? Well, I think it has been a fool’s chase and I can’t begin to imagine how much money has been spent in its pursuit. And the more data we accumulate, the further we get from being able to realize this “vision.” What’s wrong with the vision?
- From a marketer’s perspective, you don’t need to get to 1:1. Let’s use beer as an example. What do you need to know? Probably just my gender and IQ. To make a gross generalization:
- If female, then light beer.
- If male and IQ>93, then imported beer.
- If male and IQ<93, then Budweiser.
- From a consumer’s perspective, do you really care to have that close a relationship with your deodorant or your automobile? At some point, it even gets creepy. It’s just a deodorant for God’s sake, not a lifestyle expression (unless you use Axe).
Instead of 1:1 marketing, we — both sides of the equation — want sufficiently meaningful differentiation. I’m not going to ® that term. It’s not particularly catchy. But that’s what serves both marketers and customers very well. We don’t have to drive to deeper and deeper levels of differentiation. We just need to get to some degree of meaningful differentiation. Light beer or not? Import cars or domestic? Museums or baseball? As brands drive to get finer and finer, bad things happen:
- Costs go way up to accumulate and process all the unnecessary data.
- You slow down your decision-making because you’re considering too many variables.
- You get further away from what the customer self-identifies as their relevant affiliation. I’m a Mets fan (I know, I know) and identify as a whole with that group, not an upper-middle class, educated professional with two kids, a dog and, occasionally, a job. When you differentiate me from the rest of the group on some vague 1:1 notion, you diminish your attractiveness, not enhance it.
As a consumer, I generally identify as part of a tribe. Identify those meaningful tribes and market to them, not some ridiculous notion of 1:1 that we’ll never achieve and would never deliver on its promise even if we could. It’s time to say “the emperor has no clothes” to this whole 1:1 marketing thing. Social media has given it new life. Stop it now.
Filed under: Marketing, Social networking | Tagged: 1:1 Marketing, Personalized Marketing |
Jonathan Yarmis is Doctor Disruptive 
I’ve always considered 1:1 to be more aspirational than achievable. Certainly there’s nothing wrong with attempting to segment more finely and address customers more individually, but the topic (as with many in our world) ultimately became a smokescreen for data warehouse, CRM & analytics vendors to cram a lot of technology – a large % of which never really worked – down the throats of gullible buyers.
But you’re right that social has completely changed the game by completely and permanently shifting the balance of power away from the marketer and toward the consumer. I agree it’s time for the term to fade away – although I’d argue that for the most part it already has.
A couple of comments, Chris. First, I don’t think it has faded away. At least I keep seeing it rear its ugly head with marketer believers, who are waiting for that next big breakthrough.
More importantly, though, I DON’T think it should be even aspirational. By trying to divide us finer and finer, I think marketers try to deal with us as individuals where in many instances we’re best dealt with as part of a tribe. What is a Mets fan if not a collective group with shared angst and failure? That collective experience doesn’t translate to the 1:1 one. OK, maybe I picked an easy example there. 🙂 But I think the right thing to do is to segment to the largest meaningful grouping rather than aspiring to 1:1ness.
You are absolutely correct, Jonathan, when you suggest that highly individualized marketing just isn’t applicable in many situations. Indeed, no one really wants customized beer, or toilet tissue or deodorant or detergent, for that matter. However, while it may be true that a woman probably just wants a light beer, if the bartender REMEMBERS the particular brand of light beer the woman favors, then that’s 1:1 marketing. If the woman would find it too intrusive for the bartender to remember such a personal detail, then the bartender should know not to record the woman’s preference. Either way, it will add up to a better, more personally satisfying experience for that particular customer.
Today, what we used to call “1:1 marketing” is more widely known as “customer relationship management,” or CRM. Over the years, CRM has given birth to many different and parallel business practices, including customer experience management, customer centricity, and customer value management. At its core, however, the whole field is based on the simple principle of “treating different customers differently,” as was correctly suggested in the Wikipedia entry you referenced in your post. Importantly, 1:1 marketing does NOT require that a company treat every single customer uniquely, but only that some aspect of the customer’s experience should be based on the company’s insight with respect to that specific customer’s wants or preferences. In effect, rather than optimizing the company’s actions around products or channels, a 1:1 marketer will try to optimize around customers.
So you are right when you say you can still see it “rear its ugly head with marketer believers”– and they’re all over the place. CRM (i.e., 1:1 marketing) is what a business does, for instance, when it selects the best offer to make to a particular customer on its web site, or when it alters its sales pitch to make a message more persuasive to a particular customer, or when it puts coupons on a cash register tape that are based on that customer’s previous purchases, or even when it fills in personalized contract details to save a customer time and effort.
The only cost-efficient way to conduct 1:1 marketing, or CRM, is to rely on mass-customization principles and “modularize” the product or service offering. By digitally combining just a few dozen components of a message, service, or product, the CRM practitioner can actually render billions of different combinations, with the result that the customer perceives the experience to be highly tailored. This is how Amazon can send you a book with just one click, it’s how your bank’s bill-paying web site remembers your vendors, and it’s probably why you got upgraded to business class on that recent airline trip.
As a practical matter, the more “modules” you have available to mass customize different customer treatments, the more finely you can segment your customers, in order to treat each customer in a more and more optimal way. This doesn’t mean you shouldn’t also try to find those unifying, universally appealing traits that might allow you to link all your offers into an overriding brand message (for Mets fans, for instance). That’s just traditional marketing, the way it had to be practiced before we had addressable, interactive media. And it’s still a valid practice – but it’s no longer the only tool in the toolkit.
Still, if you’d prefer to do away with 1:1 marketing entirely, Jonathan, then be sure to tell them not to upgrade you next time, no matter how much you might have flown in the past.
Find myself compelled to comment. There are indeed areas where it is worth it or perhaps actually necessary to use small segments and even 1:1, particularly in high value B-to-B industries. In these instances sales and marketing are also typically more tightly integrated. If I want to sell a MRI machine, the value of the sale and the small target audience of buyers may in fact suggest a very narrowcast and almost fully personalized approach. Beer, No. Deodorant, No. Consumer Travel? Perhaps. B-to-B travel? more likely for the top decile.
When segment creation can be facilitated though automation the friction of the narrow segments goes away. Of course there is still a place for the messages placed in areas of far less targeting to complement the narrowcast messages.
Great discussion!
1:1 marketing, and/or CRM are both very valuable to growing companies when they:
a) reach a point where they need to scale beyond the media channels they have been using
b) have an opportunity to resell to their existing customer base thus often lowering their acquisition costs
c) need to introduce a new product or service
d) need information to develop a new product or service
e) other – tbd
This works for B2B, B2C, and B2E (enterprise).
Intelligent application of CRM is good for the economy!