The Road to One-to-One Marketing

A close-up look at how a concierge service is successfully using one-to-one marketing, and what this appraoch involves.

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Many are calling it the smartest new way to make any company more valuable to its customers -- and more competitive. Can one-to-one marketing work for you? It has for Capitol Concierge

Like every company builder who finds success, Mary Naylor has more than once been blessed. Some of her good fortune was standard issue: Her two investors turned out to be "phenomenal mentors." And her hometown of Washington, D.C., turned out to be the perfect locale for her company, Capitol Concierge -- which sets up concierges in office-building lobbies to provide personal and business services, from picking up dry cleaning to managing a catered lunch.

But the best blessing was one few founders would deem a blessing at all: the business Naylor stumbled onto turned out to be so demanding that survival depended not just on satisfying customer needs with alarming proficiency but on learning enough about customers one by one to anticipate their needs even before they knew they had them. For Naylor's company, now at $5 million and expanding fast enough to make last year's Inc. 500, great customer service was just the market's cost of entry. What was required to stay alive -- let alone grow -- was one-to-one marketing.

Which would have been fine, probably, if Naylor had known what it was.

Today savvy marketers everywhere rue the runaway costs of acquiring new customers. The savviest, one of whom the 32-year-old Naylor has determinedly become, go further. They've responded to those costs and a host of other competitive pressures by focusing not on accumulating more customers but on getting more business from the customers they already have. They aim not to find customers for their products and services but to find products and services for their customers -- the deceptively simple theme of the recent business best-seller The One to One Future: Building Relationships One Customer at a Time. ("You can reduce almost every principle in the book to that basic truth," says coauthor Don Peppers, a former advertising executive.)

One-to-one marketing borrows from several popular marketing concepts: relationship marketing, database marketing, customer-satisfaction initiatives, and even airline frequent-flier programs. It champions the use of now-popular technology to identify, track, and interact with individual customers -- noting "every transaction, every time they call to ask a question or make a complaint," says Martha Rogers, Peppers's coauthor and partner on the lecture circuit. (See "Ask the Marketing Doctors," [Article link], for the pair's advice to the sales-lorn.) Dale Carnegie meets Bill Gates? Sort of. But it's not as expensive or time-consuming as that sounds -- not given how much more profitable it is to win repeat business than to chase new prospects. And if technology is the glue of one-to-one marketing, you still needn't be a Net head or an ACT addict to get started. You just need a different point of view. Forget market share and economies of scale. Think customer share and economies of scope. Fortunately, the customer-share mentality comes easily to entrepreneurs. The corner grocer was the original one-to-one marketer.

Nowadays, Speedy Car Wash, in Panama City, Fla., inputs license-plate numbers to instantly identify customers by name and retrieve information about previous visits, such as whether they like the trunk vacuumed or the window seams washed -- or whether they are due a discount on waxing. A Seattle country-music station sponsors not only a listeners' club but also a toll-free line listeners can use to respond to individual ads. You may have heard of Peapod, the Chicago virtual grocery store that takes your order by PC and remembers your brand of peanut butter. In Burlington, Mass., Individual Inc. produces a customized business newsletter that's downloaded to your fax or computer. And Oriental Trading Co., an Omaha direct marketer with millions of customers, responds individually to people who order Alleluia kites, Jesus Loves Me bracelets, and praying-hands stickers from its main catalog by sending them its Inspirations catalog.

Smart and economical tactics, all. In fact, Peppers and Rogers's one-to-one tract might have been subtitled "How to Beat the Big Guys by Changing the Rules" -- except that the big guys are doing this stuff, too. Federal Express's intricate package-tracking system reveals worlds about its corporate clients. If you subscribe to Time, you may have noticed a recent offer from Godiva with your name on it -- fill out a survey and receive a chocolate-dipped strawberry. And Levi's custom fits blue jeans according to your measurements.

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