Have you noticed that a lot of people are talking about one-to-one marketing these days?
It’s a hot topic. And, as a result of all the buzz, more and more executives are starting to ask, “What exactly is one-to-one marketing?”
It’s a good question. Organizations such as P&G, Amazon, Apple, BMW, and others have been practicing one-to-one marketing for years. Here’s what David Taylor, the CEO of P&G (makers of Crest, Pampers, and other major brands) has to say about one-to-one:
“We are reinventing brand building, from wasteful mass marketing to mass one-to-one brand building fueled by data and technology.”
— David Taylor, CEO, Procter & Gamble
So if David Taylor and other executives around the globe are promoting one-to-one, it’s probably a good idea to get to know a little bit more about it, right?
In its simplest form, one-to-one marketing is a way for brands to personalize their marketing messages based on the prospect’s behaviors, preferences, and propensities to buy your product
As you get more sophisticated, you can use one-to-one to connect the dots between purchase data, marketing data, and even psychographic data. The result is that you have a campaign that is narrower in focus, but that has a greater impact on growing your revenues.
Before we go much deeper, let’s discuss some of the problems with traditional mass marketing.
Traditional mass marketing is all about sending the same message to as many people as possible while keeping costs as low as possible.
In contrast, one-to-one marketing is about sending more relevant messages to fewer people. The improvement in the conversion rate offsets the higher cost of hyper-targeted, personalized ads.
But one-to-one isn’t just about personalization and hyper-targeting. It’s also about connecting the dots between the data that is collected and the final purchase.
In other words, brands can collect data about their prospects and then confirm whether or not the prospect who saw the ad actually bought the product at the retailer.
And this can all be done while protecting the privacy of the consumer.
In An Audience of One, published by McGraw-Hill, Chuck Moxley and I outline how brands like yours can set-up, launch, and manage one-to-one marketing campaigns. Essentially, An Audience of One is a roadmap on how to do a one-to-one campaign effectively.
We’ve had a lot of great feedback on the book. Here’s what Doug Busk, a former Global Group Director at The Coca-Cola Company has to say about An Audience of One.
In the book, we describe a lot of things, including what a one-to-one campaign is, and what it isn’t.
That’s a good jumping off point for this blog post, so let’s take a look at the chart below. On the left-hand side, we have what a one-to-one marketing campaign is. On the right hand side, we have what a one-to-one campaign isn’t.
Practicing one-to-one means treating each prospect and customer as a person who has a name, has a unique set of needs and desires, and wants some control over their relationship with the brand.
Instead of being treated as a target on a list, a one-to-one customer wants to be treated as an individual by being served relevant, meaningful ads that are as un-intrusive as possible.
One of the fundamental premises of one-to-one marketing is that your customer might actually want to engage with your brand. That may surprise you, but we have data that supports the premise.
Customers want relevant ads delivered to them by the brands they love. What they don’t want is to be treated as a number. Instead, they want to have a dialogue with the brand and be treated as a person.
In a way, one-to-one marketing has been practiced for hundreds of years
You could argue that one-to-one marketing has been around for hundreds of years. For example, there’s a pub in Oxford, England called The Bear that has been there since 1250.
Imagine that the year is 1250 and the pub owner sees his neighbor John walking down the street. He would stick his head out the door and say, “Hey John. We have a new batch of your favorite mead that’s just been delivered. Come on in. The first drink is on me.”
That was one-to-one marketing.
Centuries later, when the butcher, milk deliverer, or person delivering the paper had conversations with their prospects and customers, they were doing one-to-one marketing, too.
Fast forward to today where sophisticated brands can use one-to-one to engage with prospects and customers at scale.
And when they do, the results speak for themselves. Check out some of these case studies about one-to-one marketing:
- Midas worked with Nielsen to look at credit card transactions from 125 million non-personally identifiable prospects. They wanted to direct a campaign to people who had visited one of their competitors — but not Midas — during the previous 12 months. With that data, they hyper-targeted ads specifically to people who had visited a Midas competitor in the past year. Those hyper-targeted ads were so effective that they increased market share 8% with households that saw the campaign. Better still, for every $1 invested, they generated $10 in revenue!
- In another example, a stock brokerage wanted to target their customers who had accounts with them, but who only invested a small amount of their assets with the brokerage. They partnered with IXI/Equifax to build target groups based on home address and an individual wealth profile. That group saw hyper-targeted ads on their mobile apps and also saw TV ads via addressable TV boxes. Customers who saw ads on the mobile apps and the television increased assets under management by 462%. And for every $1 spent on the campaign, the brokerage generated $8 in increased assets.
How one-to-one campaigns are different from mass marketing campaigns
A lot of people make the incorrect assumption that you can simply buy a piece of technology and start executing a one-to-one campaign.
But that’s not the case. One-to-one is not about a technology. Instead, it’s about a technique.
With that in mind, let’s take a look at how one-to-one marketing campaigns are different from mass marketing campaigns.
For starters, a one-to-one marketer doesn’t target based just on demographics. Instead, they target based on much more nuanced information. For example, a one-to-one marketer might target prospects based on 1) which products prospects have historically purchased in the past, 2) where the prospects go during the day, and 3) how people think about purchases in your category.
See the difference? Instead of targeting “College educated adults ages 35 to 54,” a one-to-one marketer would target “College educated adults, ages 35 to 54, who have purchased Nike basketball shoes more than 2 times in the past 12 months, who live in the top 10 NBA cities, and who index over 125 for athletic equipment purchases.”
In addition to re-framing how a one-to-one marketer targets their prospects and customers, we should look at the goal of a one-to-one campaign. The goal isn’t to interrupt people but to engage them by being relevant.
Instead of deploying the same ad to an audience of millions, one-to-one marketers prefer to deploy more relevant ads based on the prospect’s previous behaviors. This can be done using segmentation and personalization techniques available with CRM, marketing automation, or even dynamic creative optimization with online display campaigns.
One-to-one marketers target specific prospects rather than specific demographics
With a one-to-one campaign, you’re targeting the human being rather than the TV show or the website. A one-to-one marketer doesn’t simply run an ad based on the demographics of those watching Dancing with the Stars. Instead, they run ads targeting specific kinds of consumers no matter what TV show they’re watching.
In other words, they target the individuals not programs.
Here’s an example.
Years ago, I was working with a young marketing executive at a large financial institution. The marketing executive wanted to run their campaign on various large websites (e.g., ESPN, CNN, NFL, Fox, etc.). The executive’s thinking was that their target market would visit the websites and see the ad.
But we explained to the executive that they were thinking about the campaign the way a mass marketer would think about a campaign.
A mass marketer would say, “Run the ad on the websites we think our prospects will be visiting.” A one-to-one marketer says, “I don’t care where the ad runs (as long as the website isn’t at odds with our company values). Instead, let’s follow our prospects around the internet and run the ads wherever our prospects and customers are.”
That flip-flop – from running ads on sites you think your consumer is visiting to running ads on sites you know your consumer is visiting – is one of the key differences with one-to-one marketing.
A one-to-one marketer knows where their prospects and customers are and can target based on that knowledge.
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A one-to-one marketer also views the goal of marketing somewhat differently from a mass marketer
Instead of focusing on short-term sales, a one-to-one marketer focuses on lifetime value of the customer. In other words, they want to keep the customer for life, not just for the sale.
By focusing on the lifetime value of a customer, a one-to-one marketer can deliver more nuanced campaigns and can do a better job of calculating the ROI and/or Return on Ad Spend (ROAS) of those campaigns.
There are five ways a brand can increase customer lifetime value:
- You can get customers to purchase more frequently
- You can get customers to spend more when they do purchase
- You can get customers to remain a customer for a longer period of time
- You can get customers to refer friends
- You can get customers who have lapsed to come back again
In order to increase customer lifetime value, you have to be able to track every purchase over time. That’s possible with one-to-one marketing. It’s not possible with a basic mass marketing campaign.
How to launch a one-to-one campaign
It can be intimidating to get started in a one-to-one campaign. After all, it’s so much easier to simply stick with what you’ve been doing, right?
There’s a problem with that.
The problem is that your competitors are not sticking with old-school methodologies.
Instead, they’re testing new techniques that are designed to increase their market share. That’s good news – for them. It’s bad news for you. Unless you decided to beat them to the punch and launch your very own one-to-one campaign.
The easiest way to get started with one-to-one is to use marketing automation to kick things off. Here’s an excerpt from An Audience of One that provides an example of how to use marketing automation as a one-to-one marketing tool:
“At the most fundamental level, 1:1 can be accomplished with a good marketing automation platform like GetResponse, Mailchimp, or HubSpot. When you combine marketing automation with, say, a good e-commerce platform like Shopify, BigCommerce, or Wix, then you can do a basic 1:1 campaign.
If you’re the chief marketing officer (CMO) of Nike and you’re selling running shoes via the Nike e-commerce website, then you’d want to be able to identify your customers based on demographics like age, sex, and geographic location.
To take things a little deeper, you’d want to create a subset of those customers based on certain behaviors—for example, how often they purchase, what kind of shoe they buy, and how much they spend on each purchase. If you do this properly, then you might have dozens or even hundreds of categories for your email marketing campaigns.
One category might be “men, living in Oregon, who buy expensive trail running shoes a minimum of four times a year.”
By creating an email marketing campaign that specifically targets that group, you can improve your conversion rate. Remember, if 1 percent of the recipients of a generic running-shoe email make a purchase, but you improve that conversion rate to 1.2 percent when you create a personalized, relevant, 1:1 email campaign, then you’ve increased your revenues by 20 percent simply by speaking to individuals rather than audiences. That’s the power of 1:1.”
The scenario outlined above is not all that revolutionary – it’s just using marketing automation to segment customers and then personalize the messages to them. But that’s good news because it means that pretty much anybody can get started with one-to-one marketing quickly and easily.
Taking your one-to-one marketing campaign up a notch
The foundation for a more advanced one-to-one campaign is data. And a good place to start is with your own data.
Figure out where your own data is and do an inventory. This can include your CRM data, warranty data, purchase data, e-commece data, marketing automation data, and just about any other kind of data you might have.
The second step is to clean up your data. In most cases, you’ll want to work with a company like Acxiom, LiveRamp, Experian, Neustar, Segment, or any other identity resolution company.
From there, you can start working with a demand side platform (DSP) like The Trade Desk, Facebook, Google and others. All DSPs have reams of data and analytics that can provide you insights into who might buy and when they’re most likely to make a purchase. When you provide your own customer data to the DSP, you can create an even more robust campaign.
So far, what we’ve discussed sounds harder than it actually is. In every step of the journey, you can rely on your marketing automation partner or your DSP to help you along the way. After all, it’s in their best interest to see that you’re successful using their products and services so don’t be shy about asking for their help.
The next step is to append third-party data to your first-party data so it provides a more nuanced profile of your customers and prospects. Here’s another excerpt from An Audience of One that will help clarify what you’ll be doing at this stage of the game.
“Let’s pretend for a moment that you’re the marketing director for Holiday Inn. You have data on your Rewards customers that’s pretty robust—you know their home addresses, you know how frequently they stay at your hotels, you know if they’re budget travelers or premium travelers, and you know a bunch of other stuff that gives you a pretty nuanced view of your existing customers.
But let’s say that you, as the marketing director, decide that you want a more detailed understanding of your customers. After all, if your Rewards members stay with you, on average, five times each year, who’s not to say that they don’t spend the night in your competitors’ hotels 10 times each year, right?
Well, there’s a way to append your data and find that out. You can get overlays that provide a much richer view of your customer. For example, you might find out that a certain segment of your customers that travel 12+ times a year on business stay at a Holiday Inn 6 times a year, which means you’re missing out on another 6-plus potential stays from those customers.
That’s revenue that should be yours, right? Wouldn’t it make sense to develop a campaign specifically designed to get your existing customers who travel frequently to increase the number of stays at your hotels?
That would be relatively easy to do. And the starting point is what we’ve talked about here, which is to take your existing customer data and then have it appended by Acxiom or another company so you can use that nuanced view of your customers to design better campaigns.
Once you have the new appended customer segment, you can work with a DSP and other third-party platforms to deploy the campaign so it’s hitting the right customers with the right messages at the right times.”
The excerpt above from An Audience of One provides another step up in the development of a one-to-one campaign. But there’s more — we can get even more sophisticated in the approach.
The next level up for a one-to-one marketer is to incorporate transaction data into your data mix
In other words, you can connect the dots between the campaigns you run and the actual results online or in a bricks-and-mortar store.
As an example, let’s say you’re Apple and you’ve developed a new product call the iTracker.
The iTracker is a large, wall-mounted display designed for interactive exercise programs. This imaginary product is expensive – say, $4,500 – so there’s a lot of profit margin built into it.
With a product that expensive, you can go all in with your one-to-one marketing campaign. You can spend the time and money to clean up your data with a customer data platform. From there, you would work with a DSP and other third-party platforms to deploy a campaign hyper-targeted to prospects that have a specific propensity to purchase expensive exercise equipment.
Ultimately, you would use all of your data to track whether or not the people you targeted in the ads bought the product either online or at a bricks-and-mortar retailer.
That last point – that you’ll be able to connect the dots between who saw the ad and whether or not they ended up purchasing the product – is what a true one-to-one campaign is all about.
A one-to-one marketing campaign is not just about hyper-targeting. And it’s not just about personalization. It’s also about connecting the dots between the data showing you who was exposed to the ad and the data showing you which of those people actually bought the product being advertised.
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Despite all of the information above about being able to hyper-target and track your prospects and customers in a one-to-one campaign, one-to-one marketers go to extreme lengths to protect people’s privacy. After all, no brand wants to be accused of being creepy. So sophisticated one-to-one marketers will work with data partners who anonymize the data and information.
In other words, instead of targeting Barbie Thorne living in London, a one-to-one marketer targets ID# 4537-27955-a-7744. By anonymizing the data, one-to-one marketers ensure that they’re targeting non-personally identifiable data sets rather than individuals.
The bottom line about one-to-one marketing
One-to-one marketing allows brands to send more relevant, meaningful ads to prospects and customers based on information specific to that individual. Brands practicing one-to-one often use third-party identity resolution partners in order to clean-up the data and to protect the privacy of the individuals receiving the ads. The end result is that one-to-one marketers grow their revenues by narrowing their focus. Which is better for the consumer, and better for the brands that practice one-to-one.
About the co-authors of An Audience of One:
Jamie Turner is an internationally recognized author, university professor, and management consultant who speaks about leadership, persuasion, and marketing at events and conferences around the globe.
You may have seen Jamie in Inc., Entrepreneur, Business Insider, or Forbes. He’s also a regular guest on CNN and HLN, where he delivers segments on marketing, persuasion, and leadership.
Jamie is the co-author of several essential business books, including How to Make Money with Social Media, Go Mobile, and An Audience of One, co-written with Chuck Moxley. Jamie’s YouTube channel was designated one of the “Top 10 Business YouTube Channels” in the nation by Wishpond.com.
You can learn more about hiring Jamie to speak at your event by visiting JamieTurner.Live.
Chuck Moxley is a marketing practitioner with more than 30 years’ experience on both the brand and agency sides of marketing. He led brand strategy for many consumer brands while working at several agencies, and has led marketing for numerous business-to-business brands over the past two decades, serving in executive leadership roles. Chuck has developed innovative marketing programs for dozens of brands including Chick-fil-A, Lee Jeans, Subway, AT&T, Pepsi, Citgo, NFL, and Sears.
He is one of the nation’s leading experts on the convergence of technology and marketing, and speaks frequently at corporations and industry trade organizations on digital marketing, digital identity, and the ethical use of data and its impact on business and society.
To learn about how to book Chuck to speak at your event, visit ChuckMoxley.com.