The concept of one-to-one marketing revolutionized how companies communicated to customers, shifting the focus from mass marketing to personalized communications. Today, however, even companies who have mastered “one-to-one” personalization are often falling short in the eye of customers—many of whom are opting out because of the disparate, disconnected (yet “personalized”) communications they receive. Now companies are looking for new ways to create communications that will reach customers. But how?
Today’s consumers are demanding more control
Today’s consumers no longer sit passively waiting to be spoon-fed information. They’ve become information activists, seeking insights into products and services on their own terms. With the advent of social networking, consumers can now bypass corporate messaging to build their own networks, going as far as creating content and commentary, blogging and tweeting. Consumers are also more educated on marketing tools and know that every click, visit and search can be tracked, which only increases their distrust of the idea of “one-to-one.”
As a result, many are “opting out” of receiving content from vendors. According to the Direct Marketing Association, email opt-out rates, which once averaged around 1%, have risen to 3% in recent years as seven out of every ten consumers are choosing to cutoff marketers who fail to connect in more meaningful ways. Even when they do not formally opt out, many simply “mentally” opt out. Today, nearly 60% of consumers delete email messages without reading them.
We recently worked with the consumer division of a major bank in the U.S. to implement an uplift modeling solution which helps predict how customers are likely to respond to any given communication, allowing marketers to concentrate on the persuadables and avoid those that will react negatively (opt-out or even change provider) and those that were going to buy anyway. As a result, the bank was able to reduce the amount of outbound messages to customers by 40%, while at the same time increasing incremental cross-sell revenue by 300%.
Two-way dialogue is the new playing field
But it’s not just about successful targeting of one-way messages. Consumers want to be heard and, more importantly, they want interactivity. Many appreciate a two-way dialogue with the brands and service providers they’ve selected; but the ideal consumer experience needs to go far beyond simple personalization that feature one-way messaging.
According to Forrester Research, a better customer experience drives improvement for three types of customer loyalty: willingness to consider another purchase, likelihood to switch business to a competitor, and likelihood to recommend to a friend or colleague.
Marketers need to encompass an ongoing exchange with the consumer, so that customer responses can actually alter the content of future communications in a coordinated effort between inbound and outbound efforts—even across channels. So that no matter what channel a customer chooses for outreach, the marketer responds personally, intimately, and with awareness of the previous interactions.
We helped a large financial services provider in the UK to optimize its customer interactions. The Company wanted to present customer service representatives with a single view of each customer, including details of each interaction, and intelligent, actionable prompts to help employees to make the most of each customer interaction. By optimizing its customer interactions Nationwide has delivered real returns with incremental sales running over 200% of original targets.
In the new “1:1” the customer must have an equal say
There are challenges, but companies can transform the one-way “one-to-one” connections into a true 1:1 experience, delivering the mutually managed two-way dialogues customers prefer. To get there, firms need to adopt best practices in customer communication management, including the following:
- Deepen Customer Insight. Companies need to use customer data to focus communications around topics which are relevant to them and their individual needs.
- Engage Customers When They Want to be Engaged. By moving away from a campaign-focused mentality, companies can reach a wider audience with more relevant messaging at lower acquisition costs. The secret: convert inbound interactions into revenue and retention opportunities by presenting highly targeted messages and ensure every touchpoint is better measured, monitored and managed.
- Ensure Cross-Channel Consistency. Today’s multi-purpose communication engines provide a centralized platform that empowers individual departments to initiate new programs with limited IT support. By optimizing existing systems and infrastructure, companies can keep an eye on the big picture, regaining the time to develop a strategic vision and roadmap for the future.
- Enact Communication Governance. Real-time data access, rules-based decision-making, and standards for content, context and design provide the foundation for a consistent brand image, so customer communications can be managed across print and digital media—anytime, anywhere. The ability to establish rules and generate personalized output—in both print and digital formats—helps provide for “always on” communication management.
One-to-one marketing is dead. Long live the mutually managed 1:1.
The “one-to-one” revolution contributed in significant ways to improving personalized communications between companies and their consumers. The movement proved the value of personalized, relevant messaging. But technological and social innovations have moved consumer relationships far beyond mere “personalization;” today, “one-to-one” needs to be a two-way street with customer preferences and needs guiding the way.
Overall, consumers seek a mutually managed customer experience where personalization comes not only in the form of “offers” but also in terms of the messages they want to receive, including frequency, channel preference and overall focus. Technology enables companies to move from the “one-to-one” environment into a more dynamic and effective two-way dialogue with their consumers, helping to grow lifetime customer relationships.