Smart digital marketers will not chase the elusive dream of one-to-one. I can count with one hand how many true “one-to-one relationships” I really want with a company. Good morning Krispy Kreme! In reality, most customers’ needs can be categorized into a finite set of segments with specific treatments, and that is more than appropriate for a relationship with them. Marketers must learn to match these finite customer preferences to segments and deliver interactions that communicate an appropriate personalized level of “intimacy”. The true value of one-to-one to the customer is in his or her perception of that intimacy.
For years, one-to-one marketing has been touted as a critical strategy toward a successful customer relationship. Technologies for collecting and analyzing customer data, coupled with rich sources of that data (e.g., the web, third-party databases and now the promise of social) have offered marketers to build huge detailed profiles of their customers on an individual basis.
In theory, these detailed profiles can be used to drive personalization strategies to enable the creation of customized interaction strategies on an individual basis. However, the ability to create a personalized interaction does not automatically translate into relevance or value to the customer, and has led to disappointing results in many personalization attempts. At best, marketing using these techniques often achieve trivial levels of true personalization and have found it difficult to develop relevant tailored interactions on a one-to-one level.
It is relevant context that leads to value to the customer. What is the customer trying to achieve and how can we help them achieve it? An offer or message that addresses a true customer need at the right time and the right place is much more valuable than a web page that says, “Welcome back, Bob.”
True one-to-one personalization is, in essence, segmentation to a segment of one. However, in application, this level of segmentation is not necessarily practical or desirable. The number of variables that might be relevant to both the company and a customer is finite, even though the total number of all possible variables is not. The key to a successful personalization effort is learning to identify and use variables that are truly relevant.
By limiting the number of variables by which it segments, marketers can achieve the balance between maintaining a manageable number of segments (as they help define strategic value) and retaining a level of specific treatments (as it provides relevance to the customer). As a starting point, some typical segmentation and treatment variables might include the following:
Customer Value: What is the profitability of the customer? This should be considered against current profitability, as well as estimated lifetime value.
Life Stages: Is this a brand-new customer, one that is developing or an established relationship?
Touch Preferences: How does the customer prefer to interact with the company (e.g., via the Web, by telephone, social networks or in person)?
Context: What do you know about the customer in the context of his or her relationship with your business? How can your interaction be relevant with his or her prior and current activities?
Timing: Tightly coupled with context above, the timeliness of interactions is critical. Context deals with the “what,” timing deals with the “when.” For example, although analysis may show that a customer would respond favorably to a cross-sell offer, it would not be appropriate to deliver that offer if the customer is in the midst of resolving a customer service problem. While all other variables might be in line, be sure the timing is appropriate as well.