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.
Let me be the first to comment on your very attention-getting headline, Jeff – but when I read your article it turns out that you gave examples of a couple of different successes your company has had recently by using one-to-one marketing techniques, right? You optimized customer communications for Nationwide, in the UK, and you did predictive modeling for a US bank that allowed it to send just the right messages to just the right customers…
Martha Rogers and I could not agree with you more that the right way to market any product or service these days is not to talk TO customers but to talk WITH them, and in the e-social age a dialogue with a customer is easier than ever. But funny thing about dialogues:
“…a dialogue cannot be totally controlled by either party—not by you and not by your customer. Instead, as a free exchange of thoughts, or conversation, a dialogue will go in its own direction. You can push it and guide it, but you cannot control it.” That quote is from our 1993 book, The One to One Future, which introduced the concept of 1:1 marketing.
Pitney Bowes is a great company and a true believer in these principles, so thanks for all the support over the years. I hope your headline generates a lot of readership and discussion, because the business world has a long way to go yet before most companies really “get it”!
I couldn’t help but think of Don Peppers & Martha Rogers when I read this so was pleased to see Don’s comment. The mutually managed one-to-one marketing Jeff writes about is what Don & Martha have been writing and preaching about for 20 years now. I never understood one-to-one marketing to be a one way dialogue. But if Jeff thinks it is, then it might also explain why so few organisations have mastered the science of a true one-to-one dialogue.
Hi Don. Absolutely spot-on. It is all about the important transformation from "1 to 1″ to true "1:1″ with each party being equal. I'm also happy to see that Claire certainly gets it as well. It seems however that far too many still think of "one TO one” as getting it right by personalizing the message from "me to you”. Of course, true Dialogue cannot controlled, but is rather something that must be facilitated and enabled for mutual benefit between the individual customer and the organization — not just at a point in time, but over time, connected across all interactions. And of course, therein lies the difficult challenge – even for today's organizations. Really, this message cannot be told enough.
To dig deeper into the other perspective of 1:1 dialogue, more from the direction of the business toward the consumer, the good news is that we see that a number of best practices and enabling technologies have emerged. We see that an effective onboarding program including preference management is the best first step to setting the stage for 1:1 dialogue, allowing the organization to effectively "listen” to customer before they begin to speak. Downstream, to guide customer-initiated interactions, the next generation "best next action” decisioning (a more evolved form of real-time decisioning) can allow the business to focus the conversation on what's actually best for the customer (not just their business) and can help facilitate that institutional memory of the customer both during and across interactions. This is a key part of the customer interaction hub.
I can share that one organization that's doing this really well at the moment is Merrill Lynch. In their initial effort, they have connected the customer-initiated dialogue across their touch points including call centers, web site, branches and IVR, using best-next-action decisioning as the enabling technology. This approach basically allows them to infuse customer-centricity into their existing CRM environment – overcoming typical data, IT and channel silos, and achieving that "mutual benefit.” The dialogue happens during the interaction and across interactions. As a result, they won the Gartner Award for CRM Excellence and when they accepted, cited benefits including seeing customer satisfaction increase by 55%, revenue grow 35%, and retention rates rise by more than 25%. Clearly a mutual benefit!
Long live 1:1 marketing.
Best regards,
Jeff Nicholson
Hi Claire,
Clearly you “get it” and happily this is the exact point of the article. Far too many marketers still only go as far as the personalizing of the outbound communication around the individual customer and consider this to be “one to one.” If you look though how that is written (especially for those not as versed in Peppers & Rogers) "one to one” implies solely "me to you” – one direction. While you get it and perhaps your immediate colleagues (and Peppers & Rogers for many, many years), this is certainly not the case across the majority of marketers. I argue we should formally transition to "1:1″ with each party on equal footing, with true dialogue, across channels, across interactions, including ebb and flow. Blame complacency, data silos, internal divisions, channel silos, or even budget — very few actually have pulled off the other direction successfully, where the business is ONE organization to that individual customer, across their channels, their business units and interactions. I believe that is where much of the real opportunity next lies in order to realize Peppers & Rogers' great vision.
Best regards,
-Jeff
One to One has been the dream for many a marketer over the years and I think that concept has always broad enough to encompass Jeff’s proposal for mutually managed relationships. But in marketing, the nuances of language can be so important and it may be time to shift our terminology to reflect the new interactive, customer-empowered reality.
For my organization, our preferred term is Interaction Management and it means having a plan for every customer and then carrying out that plan in a multi-channel on-demand or proactive fashion. I’m proud to report that we’ve found that the right combination of strategy, technology and execution has driven major improvements to our key metrics.
Unfortunately, it is not easy to get there which is why I can only say that we’re happily “engaged” with our customers. I think that it will be a long time before our organization (and our overall profession) can acheive the level of maturity that provides for mutually managed relationships(“marriages”) with customers. But, it’s a pursuit worth striving for!