The marketing opportunities presented by variable data printing are enormous. By personalizing communications, marketing is tailored to appeal to the interests of individuals rather than broad segments of people.
The concept of one-to-one marketing fine-tunes target marketing to the level of the individual. One-to-one marketing is the practice of communicating directly to each customer. This communication can take place via direct mail, phone calls, or e-mail sent over the internet, but is not limited to those methods. Terms such as “direct marketing” and “relationship marketing” can be interchanged with one-to-one marketing when the emphasis is on reaching individuals.
Relationship marketing has the added dimension of maintaining contact over a period of time to build a rapport with the individual customer, as opposed to making a one-time contact.
All forms of one-to-one marketing require information about the customer and can involve gathering more information about the customer after the initial contact. This knowledge of the customer and the customer’s interests is necessary to create the personalized communication that establishes a one-to-one relationship. The advertiser must target customers that would be interested in the advertised product, and then personalize the promotion in ways that are attractive to those customers.
Marketing on the customer’s terms
Personalization has been around for a very long time and has usually been associated with costly customization, such as custom-built automobiles. It has been popular because it works. Consumers want to be recognized as individuals and addressed in a personalized way. Today, even though customers might recognize that the information about them came from a database, they appreciate the extra effort that marketers have taken to get to know them and to communicate on their terms.
To varying degrees, consumers are aware that data about their activities, particularly financial transactions, are continually being gathered and shared with marketers. Sometimes, consumers deliberately share this information, as when they answer questions on a marketing survey, or when they request, or “pull,” product information. (See last week’s blog on using variable data in push and pull marketing.) At other times, records of their activities are gathered automatically in the course of their transactions. The marketer must maintain a delicate balance between collecting information and maintaining the consumer’s trust that the information will be used for the consumer’s benefit. They can do so by using the information they have assembled to add value to the consumer’s activities on the consumer’s terms.
Through credit-card receipts, for example, a financial services company might learn that a customer has children and shops regularly at a particular children’s clothing store. The company could use that information to build customer satisfaction and loyalty by offering money-saving discounts for children’s clothing and toys. This use of the customer’s data benefits the customer. An inappropriate use of the data would challenge the relationship and risk turning the customer away.
Focus on effectiveness and value
Compared to mass marketing, or “one-to-many,” one-to-one marketing can at first appear to be more expensive. Historically, the cost of a marketing campaign was based largely on the cost of delivery, in which case economies of scale in print production argued for the use of only one message broadcast to everyone.
In one-to-one marketing, the effectiveness of communications plays a bigger part in the equation. Research has established that personalized communication increases response rates and spending by the target customer. One-to-one communications spur relationships that result in repeat sales and customer loyalty. Generally speaking, increasing the volume of messages reduces the cost of printing but decreases the effectiveness of the communication. The quality of the response from customers therefore can raise the return on investment in a one-to-one marketing campaign above that of mass marketing. With effectiveness as the goal, the focus of communication planning needs to shift from reducing costs to that of delivering greater value.
The competitive edge
Consumers are expecting that vendors acknowledge their personal interests and preferences. In effect, by personalizing communications, marketers give consumers what they want.
Marketers do not make the rules any more—consumers do. Smart marketers understand the value of personalized communication. Savvy marketers also realize that the cost of producing those communications is quickly shrinking thanks to technology such as variable data printing. Adopters of variable data printing have taken the risk, confident that they will gain a competitive advantage. They hope their competitors are watching them… from behind.