One-to-one marketing, similar to the personal marketing efforts initiated by Harrah’s Entertainment, represent a revolutionary idea in the current marketing field: communication with consumers individually, one-to-one. Contemporary marketers, from retailers to manufacturers of consumer products to business traders to businesses, are encouraged to see their consumers as a unitary individual rather than a mass market.
Most businesses today follow the rules of mass marketing in advertising based on time and sell their products to the largest number of buyers — that is, the goal is to increase market share by selling more products to more people. However, selling more products to fewer people through a one-to-one marketing philosophy is more efficient and more profitable. One-to-one marketing is based on consumers, information intensive, and long-term orientation, individual marketing methods that focus on the consumer rather than the market. Whereas mass marketers develop a product and try to get a number of consumers for that product, one-to-one marketers develop a consumer and try to find a number of products for that consumer.
One-to-one marketing can be easily compared to strategic warfare and military weaponry. During World War II, planes deployed hundreds of bombs to be dropped in chaos with the hope that at least one would hit the intended target. Now fast forward to the contemporary war and the Desert War, where sophisticated laser-guided missions are capable of firing specific targets from hundreds of miles away.3 Instead of spreading messages as far and wide along the spectrum of mass media, one-to-one marketers now this sharpens the path in choosing targets for each individual consumer.
Evolution of One-to-One Marketing
It might surprise many readers — especially those who grew up listening to song advertisements on television and seeing advertisements on billboards — that one-to-one marketing isn't all new. Actually, in essence this is an old idea. Before the industrial revolution, there was no mass advertising. Small businesses thrive and support this communication. Concerned with the growth of consumers. Early shopkeepers in small cities remember the products each consumer buys and make recommendations based on past buyers and their lifestyles. Products can even be made according to orders or modified to meet special customer needs.4
Over time, mass production leads to mass media volume buying and advertising. Business in America grows and prosperes with the principle of "making and selling" - that is, companies make the same product in large quantities, advertising it to the public.5 As a result, marketers develop a different view of consumers. Nothing is unique anymore, all consumers are considered to have the same needs and can be achieved through the same channel with the same message. As Henry Ford said, "We give whatever color you want, as long as it's black" .
Today, however, consumers want many choices in buying exactly what suits their needs and desires and expect individual attention. Current technology makes it possible for companies to interact with these consumers in new ways, by allowing companies to create databases that take data from and provide that information to these interactions. Companies use technology to make it possible to tailor products, services and communications to meet that expectation
As a result of one-to-one marketing and the benefits of technology, companies are increasing the shift from a product-driven orientation to a customer-driven emphasis. The initial vision of this change was put forward by Stan Rapp and Tom Collins, who helped write the 1987 book Maxi-Marketing, which summarizes the new directions that emerged at that time. the writer writes.8
"Every norm formed in advertising and promotion is transformed ... We live through a shift from the actual sale of each person to the same product one generation ago to meeting the individual needs and tastes of consumers with better education by supplying them with specially made products and services. That shift (is) from 'getting current sales at any cost' to building and managing a customer database to track the value of a lifetime from your relationship with each customer. "With the cost of data collection and access being reduced, the ability to talk directly with potential customers and customers, building one-to-one relationships with them, will grow."
When one-to-one marketing occurs, it is not enough to understand consumers and potential customers through a collection of profiles. The future of one-to-one requires marketers to understand their customers and work with them, rather than using them as targets. The battle to attract consumers will be won by marketers who understand how and why their customers individually buy their products — and who learn about how to win them, one customer at a time.9
A company that has covered one-to-one marketing with great success is Federal Express. The world's largest shipping company has recently transformed itself from a product-oriented marketer to a customer-oriented one-to-one marketer. Through gathering customer information, then classifying them based on individual customer value for the company and the services needed, FedEx can now address consumers who are berbesa with different messages based on what the company knows about them. For example, if FedEx knows that certain consumers only send mail one night but use UPS to deliver domestic boxes, then the target message is sent to the customer to educate him about FedEx's domestic service. The same thing, if the company knows that this consumer is using another shipping company to send packages internationally, then FedEx can convince consumers to receive information about other shipments to send packages internationally, then FedEx can convince consumers to receive information about the company's international shipping. So far, FedEx's one-to-one approach has been successful; in the small shipping segment, the company has realized a return of 8 compared to 1 for its one-to-one marketing costs.
Why One-to-One Marketing Requires Database Technology
How can marketers really communicate with their consumers one at a time? How do large companies such as Federal Express or Harrah’s Entertainment communicate with each and every one of the thousands or millions of consumers on such an individual level?
The answer is in database technology. Basically, one-to-one marketing is nothing more than a relationship worked by a salesperson with consumers. A successful salesperson builds relationships all the time, thinks constantly about the needs and desires of consumers, and pays attention to trends and historical patterns of consumer buyers. A good salesperson often knows what the customer's needs are even before the consumer knows. Salespeople may inform, educate and instruct consumers about new products, technology, or applications in anticipation of future consumer needs or other conditions.
This kind attention is the basis of one-to-one marketing — but there is one main difference. For successful salespeople, the process of building one-to-one relationships is instinctive. In one-to-one marketing using database technology, it has been planned beforehand and carried out consciously. Database technology stores relevant information about all company customers and relationships and makes it readily available for sales and marketing staff to assess, analyze and anticipate customer needs.
This mature database technology allows marketers to do what salespeople do in the 1800s - get to know their customers personally, on a one-to-one basis. Whereas early traders might only have fifty or one hundred customers at the most to explore, today's one-to-one marketers can track their customers individually through database technology, even though they are in the millions. In this era of increasing amounts of information, database technology enables marketers to filter millions of data to the right customers, to develop appropriate communication bases based on these customer needs, and monitor ongoing relationships, conduct these customers, and monitor ongoing relationships, conduct adjust the message strategy as needed. Database technology is at the heart of one-to-one marketing.
Using database software, financial institutions can use customer information to provide personal services for ATM users. Calling data stored about customers, an ATM can determine whether a consumer has an individual retirement account at the bank and then broadcast a brief personal message about the free Roth IRA agreement that is due in two weeks, for example. The ATM can remember that a customer likes to withdraw funds in $ 50 bills. Customers can even choose the background of the ATM screen display from the design menu including the hockey team logo. Most customers enjoyed this special service when the ATM maker, NCR Corporation surveyed customers, about half said that they did not care if their bank used account information if it led to better service towards their needs12.
Increased Database Technology Investment
One-to-one marketing using database technology has definitely improved. According to a recent database estimate survey, eight out of ten companies have several such databases. Investments in database technology are on the rise, especially in the health care, equipment and insurance marketers. Health care organizations are trying to solve the problem of retaining customers and the problem of satisfaction and companies that serve the public interest. Facing an unregulated future, is trying to understand its customers for the first time. Insurance companies are trying to save "life events" such as marriage or the birth of a baby, to serve as a trigger for sales13. Donelley Marketing recently found that about 85 percent of manufacturers and retailers believe that they need a marketing database to be competitive after 2000.14
The size of many databases is astounding: Ford Motor Co., fifty million names; Kraft General Foods, twenty-five million; Citicorp, thirty million; and Kimberly Clark (maker of baby diaper Huggies), ten million new parent names. GM currently has a database of twelve million GM credit card holders, giving companies access to large amounts of data about their shopping habits. GM also conducts a survey on these customers to obtain information about driving habits and their needs.
Although developing databases for one-to-one marketing efforts can be expensive, the return on investment can be very large. Federal Expreass's targeted one-to-one marketing efforts to capture small business consumers produce 130 percent better, and generate nearly 65 percent more revenue, compared to similar mass marketing campaigns.15 Land Rover Ltd., uses its database to identify four thousand Range Rover owners and invited them to a special marketing event that sold a thousand new vehicles for $ 52,000 each. The cost of sending and managing the database is $ 150,000, representing 346 percent return on investment in affordable database technology to practice one-to-one marketing done by the Village Country Inn of Vermont in the "Entrepreneurs' insight" box.
Villa Country Inn, Manchester, Vermont
One-to-one marketing does not need to be reserved for Fortune 500 companies with unlimited funds in using hardware and software. Small business owners and entrepreneurs have long known that knowing their customers, building relationships and providing one-to-one attention and services can lead to huge competitive advantages — and they don't need expensive software or many programmers to do it. No one knows this better than Anne and Jay Degen, owner of Villa Country Inn, a beautiful Victorian inn located in historic Manchester Village, located in the center of the Green Mountains, Vermont.
Although Degens had no prior experience of maintaining lodging before buying the inn in 1985, they were of the initial opinion about the importance of pampering their guests and providing a truly improved and rejuvenating experience. The atmosphere of the inn and the special attention received from Degens and its employees keep the guests focused on their personal lives, relax and enjoy quality time. Villa Country Inn is advertised in all the right places, but Degens also realizes the importance of satisfying guests who will choose Villa Country Inn year after year. Even better, the guests' satisfaction translates into words of positive mouth and an endless source of appointment.
Thus Degens starts with a series of small tactics designed to increase guest satisfaction and at the same time gather a number of interesting information that will make guests to stay, as well as staying in the future, which is more enjoyable. Information gathering starts when the guest makes a reservation. For guests who are not return visitors are asked how they heard about the inn. Guests are also asked subtle about the special events they will celebrate or special requests or needs they want. The information is stored in a database program called: Guest Tracker, which also accommodates when and how often guests visit, birthdays, annual celebrations, special interests and other information about consumers that gives Degens a hint about their likes and dislikes.
When a guest arrives, Degens uses information collected earlier about the guests to give a special touch, such as knowing which room is most preferred, or a surprise like a bottle of champagne to celebrate an annual celebration. A personal welcome card is placed in each room to welcome guests on their arrival to immediately give them the impression that they are special. Another effective touch is to put a booklet on each room that tells in detail the history of the inn and leave the feeling to guests that they personally know Degens and understand their level of commitment to make staying there as comfortable as possible.
Comment cards are placed in each room for guests to fill in, providing Degens with more valuable information about the guests' impressions of their stay, their likes or dislikes, and what will make their next visit more enjoyable. Suggestions are added in consumer records and are used as a reference when they come back. For example, the information gathered a little from the comment card gives a clue about what they like best, who their favorite employees are or what they might like or dislike about the room or restaurant. When a guest returns, Degens is now equipped with in-depth personal information that can be used to make your next visit even more special. If a guest shows, for example, that he is very happy with a particular gatekeeper in a restaurant, then Degens can ensure that they will get the same gatekeeper on their next visit. If the customer is disturbed by the noise of the next door guest on a previous visit, Degens can move rooms to find the room that might be the quietest place of the inn.
Providing the icing on the cake for the one-to-one relationship building process, guests will receive a personal thank you note from Degens within a week of their stay. A handwritten note of appreciation is given to guests for a visit to the inn and encourages them to return in the future. With this simple card, guests feel a sense of loyalty towards Village Country Inn.
Two to three times a year, Degens uses their database to classify its guests in relation to the frequency of visits for direct mail communication. Their most valuable guests are sent special offers out of season to encourage them to return. Degens has also developed a number of romantic packages, available during off-season, which promise to regain the romance of the lives of repeat guests.
In the years since Degens repaired the inn, they have hosted more than twenty thousand guests who have come from all over the world. Although they admit that they started by thinking their guests would visit once and then move each time to a new and different place, they now understand the true nature of developing an ongoing relationship with their guests. Today, more than 80 percent of Village Country Inn guests are repeat or appointments and many of their best customers have been guests at the inn fifteen times.
The Power of Influencing One-to-One Marketing
Some strengths have helped to form a new one-to-one focus on consumers. They include a more diverse society, consumers who demand more and have less time, requests for marketing responsibilities. 18
Increasing Difference
In the 1950s and 1960s, America sought to be the Leave It to Beaver and Dick and Jane ideal of the perfect lifestyle. The ideal family is a white family and lives in a comfortable suburban home, the father works to support the family and the mother stays at home to maintain the tidiness of the house and raise her child. life was simple, dad came home from work at five, the family had dinner together, and then gathered around the television to watch The Ed Sullivan Show. Although not everyone from that era lived in this style, almost everyone agreed that it was the ideal.
Today, less than 7% of households fit this profile. Modern families are divided into smaller segments, such as unmarried couples living together, fathers or mothers heading their own households, families married without children, homosexual couples, living alone or with roommates, "a group of people who are without children" and many other changes.
Even more important than the diversity of households today, however, is people's acceptance of diversity. now, people recognize and accept diversity, and the definition of what is acceptable has changed with respect to the family has changed. No longer are married having children automatically thought to be better than becoming single parents, or living in the suburbs better than living in the city, or being white is better than Latin America or being Asian.
Demand Increases, Consumers Lack Time
Today's consumers are more time bound than the previous generation. While the continuing increase in the number of women in the workforce, an increase in working mothers, and an increase in the number of households with single parents are mostly led by women is no longer a new trend, the Wall Street Journal recently reported the possibility of women becoming the majority of the workforce American work for the first time. As a result, consumers have little time to spend on something except what is the most pressing detail in their lives. This has a fundamental impact on consumer buying behavior. Consumers become more demanding, more impatient and less likely to spend time suffering in small purchases or driving along the city to get to the mall. This is evidence in statistics that shows more than 132 million Americans — nearly three-quarters of the population — order goods or services by telephone or letter every year.19 The development of retail merchants on the Internet also proves a reduction in time for Americans. In 1998, about seventeen million Americans bought something over the Internet, up from the fact that no one had done it three years before.
Decreased Brand Loyalty
In 1975, more than three-quarters of men and women who became heads of households agreed to the phrase "I try to be loyal to famous brands". Ten years later, only slightly over half agreed to the same statement. This trend has continued in the 1990s and into the new century. Consumers now prefer to try generic items or switch back and forth between major brands in each category. They are also more likely to shop with discounts and when displayed with two competing brands, consumers will prefer based on price considerations.
Decrease in brand loyalty is thought to be caused in part by excessive coupons, coupons, trade agreements and promotions at the lowest prices possible by manufacturers and retailers who accustom consumers to finding the best deals. Brand loyalty is also faltering due to the development of available brands, with thousands of products being introduced each year. With so many product choices, consumers often get confused about product differences or they lack the time to learn about each new brand. As a result, consumers often try to base their purchases on prices.
The decrease in brand loyalty can also be caused by the increasing power of many retailers today. Retailers increasingly take control in their relationships with brand marketers, dictating the level and type of promotion in stores, product placement and prices. Retailers are also more sophisticated in developing their consumer communication programs, including direct delivery of multi-coupons and relationship-oriented marketing programs. As a result, consumers will build more relationships with certain retailers than they do with a brand. For example, consumers might drive more than thirty miles or more to Wal-Mart stores to shop even though they can get the same brand at a relatively similar price at a shop near his home.
The emergence of new alternative media
Thirty years ago, most Americans spent their nights in front of television, watching the network programs on NBC, CBS, or ABC. They also prefer to read newspapers and subscribe to general news magazines such as Life or Time. Marketers reach consumers by wrapping up mass media with image advertising.
Nowadays busy consumers don't all like to spend their evenings watching the last sitcom on television networks. Instead, they might explore the hundreds of channels available through live satellite systems, watch rented films, or visit their favorite games or news sites via the Internet. Newspapers and magazines generally give way to an abundance of special publications that serve a wide range of interests.
With the advent of new and varied media alternatives, mass media advertising will never be the same. Marketers must continually divide dollars for advertising among the various media available, concentrating on what will bring them to make the most money. Although mass media advertising on television networks or through public interest magazines will always play an important role in communicating brand messages, it will no longer be the dominant source it once was.
Claims of Liability
The impact of mass media advertising on sales is always difficult to measure. A generation of marketers quoted John Wanamaker, an American trader at the end of the century, saying, "I know half the portion of my advertising is wasteful. I just don't know which half is wasteful. " Historically, the results of spending on newspaper or television advertisements can only be measured through future sales of advertised offers, increased market share, or increased store traffic. Even sales promotion tactics, which provide more measurement than mass media efforts, have been attacked. For example, coupons distributed through free slippage ads found in Sunday newspapers are as much a form of mass media advertising as full-page image advertisements in the same newspaper, and as such, most cannot be justified. Manufacturers are currently under pressure to maintain growth and profits for their shareholders. It is not acceptable to say that sales increased after an advertising campaign. Management now needs proof that the money they spend on advertising and marketing will bring results.
How Should This Trend Affect One-to-One Marketing?
What do these forces say to marketers? How do they drive the consumer-focused philosophy of one-to-one marketing?
For starters, a more diverse society had arranged marketing the previous year that one size fits all no longer fits. Consumers no longer want to be treated as mass. Instead they want to be treated as their own individuals, with their unique needs and desires. With his personal nature, one-to-one marketing can fulfill that desire.
Second, many more direct and personal marketing efforts will continue to grow to meet the needs of consumers who do not have time to shop and make buying decisions. With the personal and targeted nature of one-to-one marketing, consumers can spend less time making buying decisions and more time doing more important things.
Third, consumers will only be loyal to companies and brands that gain their loyalty and strengthen it at every opportunity to buy. One-to-one marketing techniques focus on finding the best customers for the company, rewarding their loyalty, and thanking them for their business.
Fourth, the mass media approach will decline in importance with the advancement of market research and database technology that enables marketers to gather a number of detailed information from their customers, not just estimates of offers through demographics but clear names and addresses. One-to-one marketing will increase in importance and offer marketers a way to achieve success in a more cost effective way to reach customers. Finally, the demands of responsibility will drive the growth of one-to-one marketing and justify continued existence.
One-to-one marketing is a big commitment and often turns around 180 degrees for marketers who have spent the last half of the twentieth century in the midst of mass marketing efforts. Although mass marketing will always be part of the promotion mix, specifically to create brand awareness or to remind consumers of a product, the advantages of one-to-one marketing cannot be ignored. As marketers who start in this new milineum, new marketing orders for the future will ring very strongly in each marketer's ear: "Get to know your customers and communicate based on what you know."
A Revised Marketing Communication Process
The traditional mass marketing communication process, introduced in Chapter 15, where everyone receives the same message through the same channel, is no longer held correctly in a one-to-one marketing environment.
The revised one-to-one marketing communication process flows as follows:
(1) one-to-one marketers, senders, individually coded messages for customers and candidates identified from the database;
(2) messages are then conveyed through direct communication channels, such as direct mail, a sales clerk, marketing by telephone, or directly through the Internet;
(3) customers or prospective customers, recipients, translate messages personally;
(4) the customer or prospective customer responds to the communication in the form of a response, purchase, or other communication;
(5) one-to-one marketers capture responses, returning them to a marketing database where they can help shape the next marketing communication.
Although the flow of the communication process is basically the same, from market to customer, there are some important differences. First, the encoding of the message is personal to the individual. Compared to mass communication where the same message is sent to a large group of potential respondents who might be interested or not interested, a one-to-one communication is sent relatively to the few individuals known to be interested. Novartis Seeds Inc., a Minneapolis-based agricultural business produces colored brochures for seven thousand farmers who are individually customized. Each section displays products selected by Novartis suppliers specifically for farmers based on information collected about agricultural operations and types of crops grown. Instead of the thirty-page catalog traditionally sent by Novartis, customers get a one-page brochure with only the five or six products they need, plus other completeness products that are felt by the dealers that they should consider.
Second, the channels used to send messages are direct channels rather than mass media channels. With mass media channels such as television or newspapers, marketers do not know personally with whom they are trying to communicate. With a one-to-one direct channel, marketers have some information about each individual customer. Furthermore, with mass media channels, companies cannot respond quickly to customer reactions to the message. Instead, they have to wait to see if the person reacts positively or negatively through conducting research or monitoring sales and market share. With a one-to-one direct channel, marketers can capture the response of individual customers and use this information to shape communication in the future.
Third, note that noise, or interference from competing advertising, news articles, or store display competition, is not present in the one-to-one marketing communication process. This is because direct communication takes place directly from marketers to customers or prospects, with little intervention from competing messages. Although there is no communication environment that is completely free of noise disturbances - dogs may bark, children interrupt, or telephone ringing - the one-to-one communication process comes as close as possible to being free from noise. With less disruption, recipients of one-to-one marketing messages prefer receiving and interpreting communication correctly.
Finally, in the One-to-One communication process individual responses can be captured, allowing marketers to use these responses to update customer records, adjust future marketing efforts, and provide accountability for the use of marketing funds. Chris Zane’s Cycles, inBrandford, Connecticut, uses past responses from customers to tailor future marketing communications. Every March, Zone records its database for customers who bought baby seats three years ago. Knowing they might want to buy children's bikes right away, Zane sent the customers a postcard showing his children's bicycle inventory and offering a small discount on purchases. About 60 percent of customers who receive this postcard return to buy a bicycle.
Advantages of One-to-One Marketing
The value of possibilities for a business by knowing its customers on a One-to-One basis seems limitless. Specifically, through One-to-One marketing that uses database technology the marketers have.
- Ability to identify the most profitable and least profitable customers: Marketers can stop making wasteful marketing communications efforts and costs by spending more proposionally on the most profitable and reduced customers in those who provide the fewest sales opportunities. At Express Federation, marketing expenses are adjusted to the same value for all companies. Instead of sending the same message to all customers. Wasting a lot of marketing costs to reach uninterested customers marketing costs to reach customers who are not interested or have low value to the company. FedEx is trying further to get business from those who have more potential in future business.
- Ability to create long-term relationships with customers: significantly less to retain current customers than prospective customers to increase consumption or sell sliang or sell high-quality goods at high prices to current customers compared to winning new customers. What's more, it seems that satisfied customers would prefer to respond to other promotions if they had trusted the marketer. The lifetime value of a customer, because of that is a huge advantage. amazon.com, the leader of online booksellers, is proud that more than 64 percent of its sales in 1998 came from repeat customers. The company offers on-line customers with personal experience every time they visit the site, offering books and music suggestions based on the customer's past buying behavior.
- Ability to target marketing efforts only to people who might be interested: With one-to-one marketing, a number of companies can better predict responses to marketing offers, enabling them to carry out highly segmented and tightly controlled campaigns. Instead of sending thousands of direct mails, a marketer can target an offer to only hundreds, or maybe even a small number of really interested customers, increase response rates and reduce costs. The dollar spent on reaching uninterested consumers can now be refocused and redirected to influence buying decisions only for consumers who are likely to buy. By using database analysis techniques to assess the likelihood of people buying. the "In the Company of Dogs" catalog only corresponds to those people who have indicated that they want to spend money on their dogs.
- The ability to share diverse messages for different consumers: Rather than mass advertising blindly, marketers can tailor marketing communications to the needs of each customer or their purchase history. Instead of practicing one-size marketing thinking that fits all ", marketers can now treat each consumer as an individual as he is. Natural food ingredients maker, Whole Foods, based in Austin, Texas, operates a one-to-one marketing program that allows customers choose their favorite department.Each buyer gets a discount card with a bar-code that gives points for purchases throughout the store.Once the customer collects enough points, Whole Foods gives a 10% discount in the department of choice of the buyer.The store records all purchases for the monitor buying behavior and adjusting letters and offers to cardholders based on what they buy.
- The ability to share diverse messages for different consumers: Rather than mass advertising blindly, marketers can tailor marketing communications to the needs of each customer or their purchase history. Instead of practicing one-size marketing thinking that fits all ", marketers can now treat each consumer as an individual as he is. Natural food ingredients maker, Whole Foods, based in Austin, Texas, operates a one-to-one marketing program that allows customers choose their favorite department.Each buyer gets a discount card with a bar-code that gives points for purchases throughout the store.Once the customer collects enough points, Whole Foods gives a 10% discount in the department of choice of the buyer.The store records all purchases for the monitor buying behavior and adjusting letters and offers to cardholders based on what they buy.
- ·Another weakness of one-to-one marketing is the increasing concern of personal confidentiality by information about customers that can be seen as something positive and authentic. Although some customers enjoy being required as individuals through the technique of marketers knowing too much about them and possibly misusing their personal information. Matters relating to personal confidentiality to one-to-one marketing and database technology will be discussed later in this chapter.
- Although database marketing can result in increased income and profits for the company. The creation of database marketing can be very costly. For this reason, the company may decide to contract with an outside provider that offers your Internet search service to search for companies that provide database services for businesses. Compare the company you get with the SAS institute (http: //www.sas.com.crm). What did you find? country SAS Institute Inc., ww.sas.com.
One-to-One Marketing ApplicationAs mentioned at the outset, database marketing is not an end in and end, but rather a part of a tool that helps marketers reach customers and prospective customers with one-to-one marketing communication. The information contained in a marketing database helps marketers know and understand their customers at the individual level. By analyzing sales opportunities and driving the communication process to seize these opportunities.
Identifying the Best Customers
Smart marketers have found that not all customers are created equal, the majority of sales will come from minority customers. When companies check carefully where their sales come from, most of them will find 80 percent 80/20 applied: 20 percent of the customer base will identify these customers and develop a company with them. The opportunity is for the company to enjoy enormous profits. so, one of the most important values from a one-to-one marketing database is to track the 10 or 20 percent of customers who provide the majority of sales. Mail system experts from Pitney Bowes found that after analyzing a database of 1.2 million customers, less than 10 percent gave more than two-thirds the value of its customer base. In addition, the company found that there is a major retention and profit problem in its low volume, low cost records where the limitation rate runs very high at 40 percent. To develop a product catalog in accordance with the target. Based on what products are purchased by individual customers, Boise Cascade develops mini catalogs tailored specifically to each customer's needs that are shipped throughout the year.
Knowing personal information and other demographic information in addition to past transaction data also allows marketers to tailor a specific message. For example, Marion Merrell Dow, the maker of the drug Cardizem, wrote a prescription for her patients suffering from heart disease, developing a database of information totaling more than 440,000 users of the Cardizem drug. Companies use the information they collect to develop different messages and promotions that are based on specific user concerns about their illness or factors in their lives that can affect their health. For more than ninety thousand Cardizem users who said that it was difficult to remember to take the second and third doses all day, Marion Merrell Dow sent a personal letter and a gift: a pocket-sized digital alarm clock pill box that helped them remember the time to take their next medicine. They also found that about 140,000 more customers were confused over reports that contradicted what was good and bad to eat for those suffering from heart disease. So the drugmaker sends these users a food shopping guide. More than one hundred thousand customers told Dow that they had stress-related difficulties that seemed trivial in their daily lives, they sent a book about how to deal with stress.
Persuade Product Experiments on New Consumers
Although a significant portion of one-to-one marketing is a developer that encourages repeat purchases by the company's best customers or market segments, a marketing database can also be used to identify new customers. Because a company using a marketing database already has a profile of its best customers, it can easily find new customers that match that profile.
One-to-one marketers generally use demographic and behavioral data that includes existing customer data to get a detailed customer profile which is a powerful tool in evaluating prospective customer lists. For example, if a company's best customers are 35 to 50 years old, live in the suburbs, own a luxury car, like to eat in Thai restaurants, and enjoy mountain climbing, then the company can find these prospects in the available database or current customers this is identified as a user of a competing product that matches this profile. FedEx analyzes transactions and demographic data in its database to create a profile of the 20 percent of its most valuable customers. FedEx then uses this profile to identify similar customers in its database who can send with the company more often and send in large quantities. Targeted marketing communications are then addressed specifically to customers like this.
With a one-to-one marketing database, manufacturers now have a tool to gain insight into who buys their products. Samsonite, the world's largest bag manufacturer, uses purchase information collected through its product registration card and SOO number to determine what consumers need and how to design products that better suit them. As a supplier to retailers, companies hand over the information obtained to retailers so they can better understand their customers and tailor a special bag department to meet consumer needs. The Samsonite database currently includes demographic, lifestyle and purchase data for more than 1.5 million consumers.
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