Is the Quest for One-to-One Marketing Doomed?

The Internet is a realm where the consumer is king, more so than anywhere else in the world. And online consumers are extremely fickle. They enter Web sites and access emails at their convenience, and if those Web sites and emails don’t immediately satisfy their needs, they’re off to another faster than the blink of an eye.

For marketers, this is extremely frustrating. After all, consumers behave differently online than they might at a retail outlet. At least at the outlet’s point of purchase, a retailer has the customer’s attention long enough for a sales associate to deliver a pitch. With a Web site or email pitch, a marketer isn’t even guaranteed to be able to deliver the whole pitch without a prospect taking off in the middle of it.

That’s where the science of marketing comes in. All through my career, I’ve strived to reach that pinnacle of selling on the Web — one-to-one marketing — a concept that many marketers refer to as the Holy Grail.

Given the rapid advances in technology over the past few years, it was easy for marketers to imagine themselves in a place where they could find the Grail — where offers are personalized for each prospect and data is leveraged to the point of a personal appeal in each and every case. But some marketers are asking themselves whether they’ll ever get there and whether the investment to get to their present position was worth it.

A recent issue of “The Delaney Report,” a popular newsletter for marketing, advertising, and media executives, ran with a lead story titled “Debunking the Myth.” The story carried several quotes from respected marketers, including the CEO of Wunderman and the founder of priceline.com, that questioned the Internet’s ability to market on a one-to-one basis.

“One-to-one marketing is a myth — it implies a personal connection,” said David Sable, CEO of Wunderman, in the article. “It’s a great concept, and certainly marketers need to get as close to the consumer as they can, but whether the consumer is really willing to let you know enough about them so you can sell them something is a question.”

I wonder if some of the successful online media buyers or marketing directors at successful e-commerce sites would agree. Personally, I don’t think that the majority of online marketers have leveraged emerging technologies to the point where they can make an accurate judgment on whether one-to-one marketing works.

One of the most important principles to keep in mind when marketing on the Web is the notion that every exchange of information between a consumer and a marketer is also an exchange of value. I wouldn’t blame consumers if they failed to respond to an online survey asking them about their planned purchases if the consumers failed to receive some sort of value in exchange for giving up that information.

A proper incentive must accompany any data collection initiative, but the incentive doesn’t necessarily have to be something of a tangible nature. “Let us know whether you plan to buy a car in the next 90 days, your price range, and your considered list, and we’ll send you a personalized email with new-car deals at dealerships in your area” might constitute enough of a value to many consumers to achieve a respectable response rate for the personalized email. The trick is to test and find out whether that value exchange is significant enough to drive a marketing program.

I was pleasantly surprised by the results of a campaign that Mezzina Brown ran for a client at the end of last year. It offered a similar value exchange. One offer that we tested asked for a prospect’s contact information in exchange for delivering a prize with a retail value of maybe a couple of bucks. Another offer delivered an HTML email with party planning tips in exchange for the same information. You might expect that the tangible prize garnered a higher conversion rate; but, in reality, the two offers resulted in pretty much the same conversion rate across the campaign. It’s not necessary to invest a lot of money to capture relevant prospect data.

In “The Delaney Report” article, Jay Walker, a priceline.com founder, said, “The Internet was never about personalization. It’s not about databases and targeting, but about communicating better with … [consumers/customers]. About servicing them better and giving them something of value.”

I’d agree with Walker that service and value exchange are two very important components of online marketing, but I disagree pretty strongly with the statement about personalization.

When customers provide information to an online marketer, they often expect that this information will be used to tailor choices. I’ve lost count of the number of people who consider Amazon.com’s collaborative filtering technology extremely valuable. Even my mom, a novice Internet user, raves about the book recommendations that Amazon offers her on its site. And all it took for Amazon to offer this value to the consumer was an engine that monitored the purchase behavior of its customers and applied some basic Boolean logic.

Other one-to-one marketing technologies are making waves in the email sector. Combination email deployment/database management providers such as e2 Communications allow marketers to segment their consumer databases to whatever degree they might like.

A catalog marketer such as Musician’s Friend could use such a system to deploy personalized email that would deliver value to the consumer and achieve higher conversion rates than mass media could. Think of the possibilities: Send an email pitching the new $3,400 Kurzweil keyboard to everyone in my database who has purchased keyboards or related gear in the past three years and has an annual household income of $100,000 or more; send information on the $1,600 model to anyone in that bucket who doesn’t meet the income qualifier.

And that’s just two levels of segmentation. Consider that the above example could easily become an example of one-to-one marketing if it offered information and a purchase mechanism to small segments, incorporating household income (HHI), purchase behavior, collaborative filtering of product recommendations, and customized incentives. Using a system like e2’s, coupled with a database of product photos, descriptions, and shop-keeping units (SKUs), can result in a one-to-one email campaign that is certainly achievable with current technology.

Let’s not write off one-to-one marketing just yet. Yes, it’s true that there’s a lot of emerging technologies out there that can confuse ad agencies and other marketers, but there’s also a lot of talent out there with cross-disciplinary experience in marketing and technology that can make use of one-to-one technologies in an effective way.

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