BUILDING CUSTOMERS ONE AT A TIME
The marketplace is cluttered with advertising messages. Consumers are exposed to more than 2,000 advertising messages per day, and yet the number-one reason growers give for switching to another supplier is that they feel their current supplier is indifferent to their business. Tough challenges - but for those companies that rise to meet these challenges, this is a great opportunity.
One-to-one marketing can be part of the solution - treating different customers differently, recognizing that each customer has unique wants and needs that must be addressed individually, on an ongoing basis. Why isn't everybody engaged in one-to-one marketing? Primarily because one-to-one marketing is hard work. It requires planning, diligence, commitment and considerable resources. Fortunately the results are worth it!
NUTS AND BOLTS
The first step in developing a successful program is to ensure that concrete objectives are established. What does success look like? What are the goals, both strategically and operationally? Are you looking for market share, share of customer or leads for the sales force? How will you measure success - by response rates, sales revenue or profitability? The metrics that are used to measure success need to be very specific and need to be established prior to program rollout.
The second step is to ensure that marketing resources are focused on producers of consequence - producers that either are already good customers or those who offer outstanding potential. These customers and prospects can be grouped according to an actual-potential ratio (see chart). The ratio plots a customer's actual sales against their potential sales. The ideal situation is to have a one-to-one ratio, particularly with the customers that have significant potential. A one-to-one ratio means that you are capturing 100 percent of a customerís business. It doesnít get much better than that.
The graphic clearly illustrates the fact that five different approaches need to be considered. A retention strategy is required for customers that have a significant amount of potential and already do most of their business with your company (upper right corner). After all, these are your best customers and you can bet that they are being aggressively pursued by your competitors.
The box just below the Retain and Protect group is labeled Develop. This box represents good customers with significant opportunity for growth. They may already be doing 10 to 75 percent of their business with you, but there is clearly the potential to do more. Increasing the amount of business you do with customers like this is fairly easy to do and quite profitable.
The third area of concentration in a one-to-one program is acquisition of new customers. These growers represent a significant opportunity; however, it will require considerable effort and expense to convert them into customers. After all, these people are likely valued very highly by a rival company. They are typically your competitors' best customers. Conversion will not be easy. But these customers are worth it.
The top left-hand side of the chart is a maintenance group. These growers represent good customers whose potential is already maximized. Although they are valued customers, they are too small to graduate to the best customer set. These customers should receive excellent service, but limited time and resources should be used to market to this group.
The bottom left-hand box represents prospects with limited potential. Although some business may come from this group, they are not worth actively pursuing. Marketing funds are better spent retaining, developing and acquiring customers who represent a more significant opportunity.
Developing deep knowledge is another critical element in successful one-to-one marketing. By developing detailed knowledge of individual producers and beginning to understand their needs, it becomes possible to tailor messages at a one-to-one level.
THE PLAN OF ACTION
Once you have determined who you want to do business with, you can move to the next stage - developing a one-to-one communications strategy. The strategy will consist of a series of contacts, typically combining direct mail, telemarketing and supporting media. The sales channel is integrated into the program with qualified leads being developed daily.
Regardless of the medium, the communications strategy must achieve several things to be successful. Communications must be interesting, relevant and timely. All forms of contact must be integrated and have common goals and objectives. Finally, the programs must be executed flawlessly. Many well-conceived ideas fail because they are either executed poorly or timelines are missed.
Winning the direct-mail war is a challenge, but it's a battle worth fighting. Direct mail needs to be enticing to break through the clutter. Dimensional mailers are worth considering. After all, an envelope is an envelope no matter what the shape, size or color. Boxes, containers, bags and tubes all create a natural curiosity that most people cannot resist.
The mailer content needs to carry relevant, timely business messages. Just as important, the message needs to be delivered in an entertaining way. Good direct-mail pieces make effective use of layout, color and pictures to bring life to the material. Additional ideas for enhancing direct mail material are pop-ups, sound chips and gifts or gift certificates.
Finally, good direct-mail materials need to have a call to action that is clear to the reader and makes responding simple and enticing. Promotions that include an opportunity to win prizes such as vacations can improve response rates considerably.
Perhaps the most misunderstood weapon in a one-to-one marketer's arsenal is telemarketing. Most people think of telemarketing as annoying. However, if implemented properly, telemarketing can serve a number of useful functions in a one-to-one marketing program.
Telemarketing is a simple, economical way to begin developing customer relationships and databases. If the calls are positioned properly, they can often be customer-service-oriented rather than an imposition. Calling to make sure someone received some information and to see whether they have any questions is quite different from calling unannounced to have a survey answered. Positioning the call is critical.
Telemarketing, done properly, offers an outstanding opportunity to develop dialogue with customers and prospects at a very low cost per contact. Relationships can be built and data gathered at a fraction of the cost of other media.
Telemarketing can be a particularly effective method of prospecting. Retailers and sales representatives tend to gravitate toward existing customers and prospects that they are comfortable with. Telemarketing contacts don't allow for that type of latitude. Calling databases provides the discipline to aggressively pursue new, high-potential customers that the sales force may not aggressively pursue on their own. Good communication with quality prospects can have a big impact on your customer base.
Supporting technologies are beginning to play a larger role in one-to-one marketing programs. Fax and e-mail messages can now be integrated into communications plans. They can keep customers up to date on new developments, special offers and important dates in near real time with relatively little expense.
Web sites can also play a significant supporting role. A Web site provides an ideal environment for growers to become comfortable with a company's products and services. Web sites are an excellent advertising vehicle, as they allow the grower to learn interactively, gathering information that interests them.
The challenge for one-to-one marketers is to translate the growers' Web-site inquiries into information that supports one-to-one communications. Capturing grower data during the visit is a key objective.
But after all is said and done, perhaps the most critical element of successful one-to-one marketing programs is execution - repeatedly communicating with growers of consequence in a meaningful way and in a timely fashion. One-to-one marketing is hard work, and it requires significant resources. But for those who do it well, it can also be extremely rewarding. AM
Bill Scurfield is managing partner of The Kenna Group (formerly Contact Marketing, Contact Telemanagement and AppliCan Marketing Systems Inc.).