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One-to-One Marketing: The Future of Small Business Success
Running a business in the information age puts the focus on building customers, not building products

 

1996 Microsoft Corporation

Sidebar: Four Approaches to One-to-One Marketing

For years, mass-marketing has dominated the business playing field. Businesses aimed for maximum share of the market, taking advantage of economies of scale by manufacturing and selling large quantities. Large companies with the necessary infrastructure and resources ruled. In this system, products are developed and then customers found.

But new technology is beginning to change this, making it possible for small businesses to form one-to-one relationships with customers and take advantage of customers’ desires for individual service. Now, selling more goods to fewer people is possible and more profitable. The emphasis is on building customers - something most small businesses have always done better.

Using technology to build customers
It is technology, according to Martha Rogers, co-author of The One-To-One Future: Building Relationships One Customer At a Time, that is changing how companies market and equalize the playing field. "Technology makes it possible to do things that just a few years ago were not economically feasible. That is, it gives you the ability to build individual customer databases, not just lists of people," she says. Using computers, "any company now has the ability to quickly pull up detailed information on customers." And she adds, the Internet makes it possible for customers to talk back, which is another way for businesses to collect valuable customer information.

Individual databases allow companies to have more "intelligent conversations" with customers and to treat each customer differently. Ultimately, this leads to customizing products or services to each customer, Roger says, which cements a one-to-one relationship between the business and the customer. This makes customer service the main competitive factor and allows small business to compete advantageously.

"Make each customer more profitable"
According to Rogers, small businesses are in a better position to build one-to-one relationships than large companies. "Small businesses have ways of beating out giants that they never had before. It no longer matters how many customers I have, it matters how well I know this customer. Because big companies have depended for so long on economies of scale, it’s very hard for them to break through to build the economies of scope that will matter to the large or small one- to-one enterprise."

To take advantage of this opportunity, small businesses must find a way to take advantage of new, affordable technology. "The question to ask," Roger says, "is not so much ‘How can I use the World Wide Web to make a product more profitable?’ The question to ask is ’How can I use the World Wide Web, or any interactive tool, to make each customer more profitable?’"

The Internet is one of the first tools you should consider using, according to Rogers, because it meets the main criteria for making one-to-one relationships work: a good design interface. "For a tool to be effective, it must make it easy to give and receive information and have a perfect memory," said Rogers. "The telephone has good two-way communication, but poor memory. The radio or television has only a one-way interface. But the web has a dynamic interface and perfect memory."

Rogers thinks the future is bright for small businesses that can capitalize on the new technology. "When people ask me if there is too much hype about the web and Internet I tell them I agree with George Gilder: I don’t think there’s enough hype about them. We haven’t even begun to scratch the surface of how much they’re going to change everything."

 

Four Approaches to One-to-One Marketing
Here are four steps a small business can take to build one-to-one relationships according Martha Rogers, co-author with Don Peppers of
The One-To-One Future and soon to be released Enterprise One-To-One: Tools to Compete in the Interactive Age.
  • Assess how you’re allocating resources. Spend less on mass media and more on ways to build individual relationships, including building individual databases and utilizing interactive media.
  • Identify your most valuable customers. Start building one-to-one relationships with them.
  • Figure out how to engage customers in "learning relationships." Rogers says one of her clients puts microchips in tires to learn about customers’ tire needs. It may be as simple as asking a few questions or having a customer come in to get measured.
  • Start customizing products and/or services. ChemStation International Inc., a small soap- making business in Ohio, prepares special formulations for each customer and each cleansing job. Consider customizing delivery and packaging methods.


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