Technology today enables companies to identify the customer at every touch point.

The future holds a tremendous promise for one-to-one marketing, feels Mr M.S. Ashok, chief operating officer of Accentiv (www.accentiv.co.in). In his view, the launch of 3G and 4G services in India will usher in possibilities of communicating one-to-one with the customer through his/her mobile handset.

Rather than static words, these technologies will enable highly-interactive two-way communication with each customer of the company, adds Ashok. “Applications such as near-field communication, when used judiciously without being intrusive, can be a great enabler of one-to-one marketing for sending out communication at the right time and at the right place, when the customer is at the point of purchase.”

Excerpts from the interview.

What is “one-to-one marketing” and why is it getting attention these days?

One-to-one marketing is the ability to customise the communication and offerings to each individual customer, on the basis of their stated or implied preferences.

Given the level of technology penetration these days, companies are sitting on piles of transactional and profile data of customers.

Also, technology today enables companies to identify the customer at every touch point — be it when the customer logs into the web site using a customer ID and password, or swipes his credit card.

Companies need to use the intelligence residing in such data to push one-to-one marketing.

When you go online to a shopping portal based on what you have browsed in the past or bought in the past, when the site recommends a range of books for you to buy and you find that some of the specific titles that you are looking for are in that recommendation, that is one-to-one marketing at its best.

The reason that this field is gaining traction is because e-commerce is once again booming and technology is today enabling capture of transactions across every touch point in the offline mode.

Also, the emergence of highly sophisticated analytical tools and the cost-effectiveness of the communication in the online mode are enabling the growth of one-to-one marketing.

While your neighbourhood general stores or grocery shop was practising one-to-one marketing all the time in the form of knowing every customer's preferences and stocking accordingly, today it is possible even for large companies to practise the same.

How does it work and where?

Companies assign a customer ID or a loyalty card number to every customer they acquire and all the transactions done by the customer are tracked using this unique ID.

The nature of the transaction, including value, items bought, etc, provides rich information about the customer, such as the size of the family, the income levels, the brand loyalty and changing composition of the items in the basket.

For companies in the retail e-commerce verticals, such rich information forms the basis of segmenting the customer base and making relevant cross-sell/up-sell offers.

Sophisticated modelling techniques and tools enable companies to predict what complementary products or services can be sold to the customer and hence today there is more science to the art of pushing relevant cross-sell offers to customers.

These offers can be customised at the individual level rather than the segment level and it is possible to have as many segments as there are customers.

It is also possible to measure the effectiveness of every communication by tagging the response of what the customer did or did not do, post receiving the communication.

One-to-one marketing will increasingly find its relevance in companies that have large customer databases as in the case of banking, telecom, e-commerce, retail and insurance.

A few examples of success — globally and in India.

Globally, companies such as Amazon in the online medium and Tesco in the offline medium have been perfecting the art of one-to-one marketing as they were early adopters of this mode of leveraging the loyalty card data to analyse and segment the customers and sending out relevant communication to their customers. Sites such as Amazon help customers make choices by organising information and arranging information based on the customers' liking.

Recently, Amazon launched a campaign in the US where it asked shoppers to use mobile price comparison app, Price Check, to scan products in store but then buy them on Amazon instead. The application not only enables one to check whether the in-store deal is indeed the best by comparing it with what is available on Amazon but also enables the customer to buy the product online using the application. The promotion helps Amazon to gather valuable pricing information from its competitors and track what the customers are looking for.

Similarly, Tesco sends out highly personalised coupons for each category of item sold in its stores and online which the customers find relevant, as these offers are for categories or products that the customers buy regularly.

In India, brands such as Domino's, Van Heusen and online travel portals have been experimenting with one-to-one marketing successfully by customising offers and deals to each individual customer. If you are a frequent traveller in the Mumbai-Chennai sector, a discounted price on tickets on this sector would have more meaning for you than a deal on the Mumbai-Delhi sector. Portals that have this intelligence and have the ability to make such personalised offers will remain profitable in the long run.

What are the skills and competencies that come to play in one-to-one marketing?

Companies that want to practise one-to-one marketing successfully should first understand that every customer is unique, and hence even creating what can be termed as manageable customer segments may not be adequate. The rewards and offers made to the customer need to be personal and need to reflect the complete understanding of the customer's preferences and buying habits. The offers and communication need to be kept simple and easy to understand, without the customer having to jump through multiple loops to avail of the offers.

Hence training your people to put customers first in every action and enabling your staff to get that knowledge of the customers at every step is critical. Such customer understanding is required not only for the customer-facing staff but should pervade every level, including those who are designing the web site to those who make deliveries to the stores.

Also, companies need to master the technique of asking customers the right questions and looping the feedback into the database for a better understanding of the customers. Finally, companies need to build the competencies for making sense out of the metadata that they have been collecting rather than get overwhelmed by it.

On the economics of one-to-one marketing and the factors that determine when to use this approach.

One-to-one marketing can be very effective from a cost point of view as it enables measurement of the response to every communication. Unlike mass media communication which someone described as “spray and pray,” one-to-one marketing enables high ROI for your campaigns as technology helps you track the response to every communication and offer. The costs of pushing out e-mail and SMS have dropped significantly to give the edge to one-to-one marketing. However, that does not mean that you can bombard the customer with unwanted communication, which will be a big turn-off.

The thumb rule for such communication is one e-mail and one SMS a month per customer though it would vary on the basis of the category for which the communication is being done. More personalisation should be done when the customer logs into the site using his log-in ID and password.

(This article was published on June 8, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.