There's nothing doing if it's nothing personal

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The Independent Online
"IMAGINE you're a florist in a small town and you're wondering how to get business," says Don Peppers. "You could take out an advertisement in the local paper offering a discount in advance of Mothers' Day. The problem with that is that all the people who would have bought flowers at full price will take advantage of the price cut. What is more, your competitors will see the ad and match your prices." Consequently, Mr Peppers says you find yourself in a "diminishing returns battle".

A better solution he maintains is to remember (keep on a computer record) who bought flowers last Mother's Day and send them a written reminder in advance, perhaps offering an incentive to buy again this year.

This is what he calls "one-to-one marketing" and, thanks to a book that he has co-authored with Martha Rogers, he is winning guru status. He was recently in Britain to speak at the first Institute of Direct Marketing symposium, as part of a tour that has included Germany, New Zealand and Japan. "The phenomenon is starting to take on a life all around the world," he says.

What lies behind this phenomenon is the growing realisation by business people, especially those responsible for marketing, that "old-style marketing rules don't really apply as much as they used to".

As that old style - essentially "one size fits all" - is breaking down, companies are having to grapple with more sophisticated customers. Instead of being able to say "this is what we make, take it or leave it", they are having to respond to people who tell them what they want, and they need guidance.

Mr Peppers' basic advice is to treat customers as individuals - to seek to distinguish them rather than see them as members of social groups, or whatever classification advertisers choose. While somebody may drive a certain type of car and live in the sort of neighbourhood where that make of car is common, they may also have a buying habit that is not "typical" of the area.

Such differentiation may go against the grain for modern corporations with many products and services, but he believes it is essential. Moreover, it is not so difficult as it might appear. The falling prices and increasing power of computers means that even the largest organisation can communicate with existing and potential customers on an individual basis.

But there are practical implications with such an approach. Firstly, businesses must know who the customer is - and a lot do not. Secondly, they need to know how much customers are buying from them. Both issues can be dealt with by loyalty cards of the type being introduced by companies from supermarkets to fashion retailers - although it is worth remembering that Mr Peppers sees them as a tactic rather than a marketing strategy.

The third is rather more difficult. It requires the businesses to discover what customers are buying from competitors that they might buy from them. The only way to make progress here is to talk to the customer, and it is why "interactivity" - communicating with the customer - is such a key part of the new marketing.

He advises clients to work out ways of getting at these people and is happy to report that companies are starting to experiment in this area. Offers to pay for the information in one form or another are becoming increasingly common, as businesses take the quest for this sort of knowledge more seriously.

One way of doing this is to form an alliance with a company with similar interests. This not only allows the pooling of prospects but cuts costs.

For instance, as he describes in the book, one Amerian car rental company has linked up with an airline to attract likely customers. The point is that both have an interest in people who travel frequently. Indeed, so great is their interest that it is worth giving such people an inducement to come aboard since, unlike the occasional traveller, they are likely to be a good source of future business.

Which brings us back to the point that today there is no reason why customers should be treated the same. Some are much more valuable than others.

Of course such an attitude is not without difficulties. The key snags that he sees are organisational. Not every business is set up to behave in this way, and there is a tendency, especially in former nationalised utilities, to believe that all customers should be treated the same. There is also a third problem of respecting the customers' privacy while still acquiring the information.

The last threatens to be the biggest because there is no obvious answer. "Most companies don't think of it because it's not a problem yet. But it will be," he concludes, pointing out that it is already an issue in France and Germany.

q The One-to-one Future - Building Relationships One Customer at a Time, Piatkus, pounds 20.

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