Opinion: Getting one with the customer

Wasn’t 1:1 marketing dead? I don’t see many people talking about this kind of marketing today. About fifteen years ago, marketers started using the term “one-to-one marketing” (or 1:1 marketing) to describe a CRM strategy that focused on the individual customer. Marketing has drastically evolved over the past few decades. As recently as 20 years ago, marketers had a limited set of channels to reach consumers: television, print and radio. Today marketing is complex, addressing many customer touchpoints — including email, mobile, online, video, and social.

 

1:1 marketing was earlier a part of what was called 'relationship marketing', which is grounded in the idea of establishing a learning relationship with each customer. A relationship that gets smarter with each interaction. Customers like the fact that an enterprise now knows them better and give those marketers a disproportionate share of their business. But companies who do this well, have to make changes in their product or service to adapt or personalise their offering to customers. And this is not easy! I still remember as the CMO of Shoppers Stop in the late-1990s, it was a struggle to make changes for the 'Loyalty program' we had launched called 'First Citizen'. We wanted to offer an exclusive cash counter for 'Gold First Citizen' members and I remember what a battle it was to get alignment with Operations and other functions.

And later as the CMO for HDFC bank, I found the bank to be a 'gold mine' for customer data. And yet, it needed a deep partnership with the CIO and the technology organisation to really extract the gold.

 

And yet, the 1:1 one marketing future is not a mirage. The new age companies seem to be all about 1:1 marketing. Except that, 1:1 marketing is not a type of marketing, it is a 'type of business'. And that makes all the difference because then you create a company where process, structure and customer engagement is built around data.

 

Amazon does remember its customers’ individual tastes—and not just for a top few, but for millions. As a result, Amazon is able to create the kind of learning relationship with its customers that will keep them loyal.

 

It’s been my experience that implementing a '1:1 program' tends to motivate a company to take a more enterprise-wide view of its customers. It leads to far more integration across the various silos. It also leads to a lot of strategic issues being raised: How do I host my customer information? What processes do I need to change to be able to deliver the 1: 1 promise? How do I measure revenue per customer? Should the company package more services with the products it sells? If so, how should those services be delivered?

 

Today there is no shortage of profile, preference, behavioral, and contextual data that can be collected from customers. But this flood of information leaves many marketers paralysed because they don’t understand the steps and strategies to take that makes the data actionable.

 

So how can CMO’s accelerate their One to One business approach?

 

Firstly CMO’s need to make this a company’s transformation agenda. It would not happen only because Marketing wants to run a few 1:1 Marketing programs.

 

Once you have created a transformational agenda, Marketers need to be comfortable about asking customers for more information. Marketers need to learn how to add more information about customers. Most databases still have sketchy information about customers. As consumers we don’t give marketers information unless there is a valid reason for it. Gartner says, “Consumers are in a privacy paradox. They value their privacy, but will happily divulge their personal information in return for free access to a service or financial benefit.” Personal data has become a new currency of the digital age and consumers are happy to share, if you offer them enough value in return.

 

Then, they need to create a personalisation engine. This would mean creating a repository of customer information from digital and other channels into one database.

 

A customer database is valuable because you know your customer by name and address. But if treated like another mass medium, it actually takes away the brand equity. Brands who don’t respect the customer and spam her thru mass marketing techniques do more damage than anything else. Customer equity cannot be taken for granted! A personalisation engine allows you to identify the predictive signals within data flows and make them available in a manageable process. You also need to implement a system that lets you respond quickly to changes in market conditions. If a competitor has a promotion, the process for extracting the signals that alert you to the promotion needs to be repeatable to truly achieve a dialogue that responds to the competitive triggers. Creating this capability is a combination of technology, creative and marketing skill sets, it’s not purely a technology job!

 

Marketers need to bring technology into marketing departments. CMO’s need to have a chief marketing technology officer who helps them take technology decisions. His role is to manage the customer database and create a differentiated personalisation engine. On top of that he must be able to create a Customer engagement engine that listens to customer signals and responds.

 

Then we need a new breed of marketers who are able to connect the personalisation engine with social media and other sources of customer information. If done well, this can lead to powerfully relevant offers that create a differentiated customer experience. We don’t need separate silos of mass marketing and digital marketing.

 

Don Peppers and Martha Rogers were far ahead of their times, when they wrote, Enterprise One to One: Tools for Competing in the Interactive Age in the mid-1990s. Today, their ideas of measuring share of customer and not share of market; and developing economies of scope rather than economies of scale are extremely relevant. We now have the technology in place. As traditional industries are getting disrupted, companies are now willing to explore 1:1 marketing at scale. CMOs need to focus on getting this right and at the same time, not get anywhere close to Minority Report’s unsolicited and disruptive approach.

 

(The author is COO and Co-Founder, Hansa Cequity.)