The Start Of Beautiful Relationship

Last week, we talked “knowledge,” and specifically how it compares to “data.” One-to-one web marketing relies on data, but it really operates using the marketer’s knowledge of its customers and prospects. The difference between traditional marketing and one-to-one marketing is like the difference between studying astronomy with the naked eye versus the Hubble telescope.

With the latter, the information at hand is powerful. With the former, it’s mostly guesswork.

Marketers turn data into knowledge by using the information, insight and understanding gained over time in their relationships with customers. With mass marketing and target marketing, marketers were required to perform a lot of guessing and forecasting to generate a higher response to promotions.

With the web, we give the customer the power, choice and means to help us build a knowledge base. Marketers no longer have to make guesses and assumptions. They simply offer customers exactly what they are requesting, or they make educated recommendations that the customer will tend to act upon. So one-to-one web marketing increases customer response and loyalty, which translates into more revenue.

“Mr. Smith, We Have a Special on Lemon Pies This Week.”

In the book, Internet Guide to One-To-One Web Marketing, my co-authors and I discuss how web marketing is strangely enough much like marketing before the Industrial Age:

    “In the many years before the Industrial Age, marketing was done by the local merchant — the butcher, the baker and the candlestick maker. The local merchant knew everything about his or her customers, by memory or by recording information on accounts. This interaction between the customer and merchant was one-to-one marketing With one-to-one web marketing, we can be merchants of the high-tech kind.”

If you are a regular customer at a local bakery, you have probably experienced knowledge-based marketing first hand. The baker has relied on her memory, or has used a customer account card/database to track your past purchases. Armed with this knowledge, the baker recommends a special lemon-pie promotion this week. So invited (and charmed by the invitation), you are likely to act on this special and stock your cupboard with lemon pies.

The baker cannot do this with gigabytes of data alone. Instead, she does this with the knowledge she has built from the relationship she has cultivated with you on your weekly visits to the bakery.

Building A Relationship

Immediate gratification is not an attribute of successful one-to-one web marketing. In order to take advantage of the benefits of this type of marketing, you will want to create a one-to-one marketing plan using long-term objectives. Knowledge is built over the duration of the customer’s relationship with your company. Each and every customer interaction will add another useful tidbit of information to your knowledge base.

So how does someone build relationships with online customers?

You should look at your customer base as a collection of unique customers rather than a single database of all your customers. Marketers are used to looking at demographic segments instead of individual customers.

No two customers are exactly alike, even if they “fit” within a certain demographic segment. One 35-year-old female who owns a home, drives a four-door sedan and lives in Boston is not exactly the same as another woman fitting the same demographic profile. There are other attributes to consider that are tied to lifestyle and interest characteristics. The two women may have totally different preferences in clothing, music, food, books, home d cor, recreational activities, and so on, ad infinitum. Thus their needs for information, products and services will be remarkably different.

The beauty of the web is that marketers can now capture customer knowledge with finite detail. The key technology that enables marketers to capture this information is online profiling.

Basically, online profiling is the activity of involving the customer — either actively or passively — in building a unique database that stores transaction, demographic, psychographic and other data. There are two methods used in building online profiles of unique customers: “declarative” and “behavioral” data.

Declarative data is information that customers actively provide when building their own online profile on your web site. For example, if a customer decides to personalize your web page to his preferences, they will select attributes that are unique to them.

Behavioral data is information that is captured via web logs where you capture a customer’s clicks and transaction data. Both types of data are important to one-to-one web marketing. (Next week, BTW, I will cover online profiling in greater detail.)

Building Trust and Respect

No marketer will truly experience the economic benefits of one-to-one web marketing if customers don’t participate in the process. All of that money and time invested in a web personalization application or targeted online advertising campaign will be wasted.

Studies of web users have shown that users don’t trust the people behind the web sites enough to reveal personal information or use credit cards for online purchases. Many Internet users have admitted to inputting false information when they fill out a web registration form. This information is misleading and useless to the web marketer.

To avoid this issue, you will need two key elements for successful one-to-one web marketing: trust and respect. Trust means utilizing a privacy policy that informs the customer about what you will be doing with the personal data you are requesting from them. Respect means to give the customer the choice on how much information they want to reveal, and it means that you need to give them something valuable in return. (More on this in coming weeks, as well.)

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