Making the Transition to One-to-One Marketing

Two marketing experts offer advice about how companies can establish one-to-one marketing.

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Further Reading

In our first book, The One to One Future: Building Relationships One Customer at a Time, we proposed a radically different way of doing business, given the new reality of faster, more powerful computers and increasingly interactive media. To deal with that new reality, we proposed a customer-oriented strategy we called one-to-one marketing. Instead of selling one product at a time to as many customers as possible in a particular sales period, the one-to-one marketer uses customer databases and interactive communications to sell one customer at a time as many products and services as possible, over the lifetime of that customer's patronage. It is a strategy that requires a business to manage customers individually, rather than just manage products, sales channels, and programs. Traditional marketers have always focused on getting as many customers as possible, while the one-to-one enterprise focuses not just on getting them but on keeping and growing them as well--and not just any customers, but the most valuable customers.

The kind of relationship marketing we're advocating--what we call learning relationships--has little to do with creating a fondness on the part of your customer for your product or brand. Rather, we're talking simply about convenience. By remembering customer preferences and tastes, and by always picking up in a customer dialogue where you left off with this particular customer last time, you can in fact create a "barrier of inconvenience": a reason for that customer never to want to deal with your competitor again, provided that you continue to deliver product and service quality at a fair price.

The most common error most businesses commit when preparing to create one-to-one relationships with their customers is underestimating the degree to which every facet of the enterprise needs to be involved in the process and integrated into the actual customer relationship. Probably the second most common error, however, is overestimating the amount of change required to begin an orderly transition from product-based, aggregate-market competition to customer-driven competition. In most cases, the benefits of one-to-one marketing can be measured and proved without a wholesale restructuring of a company's current sales-and-marketing system, although often the results of such testing will lead the enterprise to plan such a restructuring sooner rather than later.

The right way to make the transition is to do it not product by product or division by division, but customer by customer. Begin your journey with just a few customers at a time, and choose first those few most valued customers who are most worth the added attention and trouble. Once those customers are identified, choose some of the brightest, most visionary, and most resourceful people in your company, and make them into customer managers. They may come from the marketing department, or from sales, or from customer service. They could be astute information specialists.

Your goal is to set up a laboratory of one-to-one practice--a group of high-value customers and highly skilled customer managers--both to prove the benefits of the overall idea and to cement the loyalty of your most valuable customers first. You can visualize your customers as lying on a spectrum of values from very low to very high. Of course, as in any other business, you're likely to have many customers who aren't worth so much but only a few who are worth a lot.

To picture the transition plan for becoming a one-to-one enterprise, imagine placing a picket fence around those very high value customers at the far end of your customer-value spectrum. On the left side of the picket fence you practice marketing as usual. But on the right side of the fence, where your most valuable customers are found, you can begin implementing one-to-one marketing. Establish dialogues with those customers, interact with them as often as you can, remember everything they tell you, and do your best to change the enterprise's behavior to reflect what you have learned from each.

On the right side of the picket fence, every customer is the direct-line responsibility of some customer manager. For those customers you practice one-to-one marketing, even if you have to prototype mass-customized products or keep tabs on your progress by hand. To make it work, the customers on the right side of the fence have to be dropped into a customer-management organization, and the metrics for determining success on this side of the fence must be established. The customer managers themselves will be driving the organization forward, toward better integration of customer-specific data and better coordination among various divisions.

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