There are numerous marketing strategies that a business can implement, and the general motive is to gain market share; to sell goods or services to the greatest number of people possible. Typically this is achieved through mass marketing where advertisements cover a large group of people with hopes of appealing to "the masses" with a one size fits all approach. However, with the changing landscape of the market (as a result of competition, technology, and customer expectations) it is beginning to make sense to build an established long-term relationship with customers based on their individual needs. When a business takes an individualized approach to marketing it is considered a One-to-One Marketing strategy.
The objective of the one-to-one strategy is to use customer information seeking to build an enduring relationship with each customer. In addition to a long-term relationship, the business is able to reduce customer retention costs while increasing revenue, as a result of maintaining a loyal customer base.
The Shift from One-Size-Fits-All to One-to-One
There are several factors contributing to this shift in marketing. One of the primary reasons for this transition is due to the ability to gather, store, and analyze data to help gain a better understanding of how and why customers make buying decisions. In depth data analysis was once reserved for large corporations that could afford to collect and analyze the data, but with the almost ubiquitous availability of data and programs that can assist with analysis many businesses are quickly gaining customer insights that weren't previously available.
Contributing to the dying tradition of the one-size-fits all marketing approach is customers want to be recognized for their individualization. Customers are individuals with unique wants and needs, regardless if there are other similar customers. Additionally, with the growth of online shopping, as well as shifting human behaviors, many customers want to spend less time shopping and making buying decisions.
One-to-One marketing reduces the time needed to shop as a result of targeted products uniquely tailored based on previous buying decisions, but this can also come from stored data from previous interactions; such as delivery address or previous orders that are saved for future repeat buys. And finally, one of the focuses of this approach is to not only earn customer loyalty at each purchase interaction, but businesses that use this approach seek to reward their best customers for their loyalty.
Individualized and Personalized One-to-One Marketing Examples
There are many companies out there that utilize this approach, some more effective than others. For example, Macy's rewards program which is tiered based on how much you spend annualy seeks to reward loyal customers with hefty coupons and individualized ads. Another is Target, which is famously known for a major faux pas where their algorithms was able to predict pregnancy based on customer buying habits, and one particular teenage customer started receiving individualized advertisements for expectant mothers, before her father knew. This story is captured at How Companies Learn Your Secrets.
One of the first, and most successful organizations in executing this strategy is Amazon. The website began its success by selling books online and they implemented an algorithm that would recommend books based on similar books purchased in the past. As a result of these individualized recommendations (I'm hesitant to call them ads), people were interested in the similar books so they would buy more, which helped to catapult the company to the number one spot for selling books online, but it also helped Amazon garner loyal customers in mass quantities.