Marketing in the late Nineties is all about nurturing the individual; the key phrase is one-to-one segmenting. There are a number of reasons for this shift from mass-marketing to targetting the individual, not least the fact that technological innovation and creativity have caught up with the sophistication of databases – and consumers are becoming ever more demanding.
But how do you achieve such an approach? Digital printing is being hailed as the solution that marketing directors have been searching for to achieve the “segment of one”.
It can, for instance, enable packs to include a variety of pictorial images and text alternatives tailored to the personal interests of an individual. Digital printing can also enable documentation to be produced within 48 hours.
Clients with high-value products, such as car manufacturers and financial service providers, are either considering targeting their market with tailor-made packages – or, in a minority of cases, are already doing so.
David Houselander, business development director at the Production House, a division of The Computing Group, says he has worked on a number of programmes where clients have used digital printing on a one-to-one basis. “We recently carried out a 50,000 print run for a car manufacturer’s fulfilment campaign. Customers showing interest in the product were sent a personalised brochure and voucher redeemable to test drive the car,” he explains.
Houselander points out that where digital technology wins is not just on the tailoring of the message but the timing of the despatch: “Communications can be despatched to coincide with the customer’s decision-making moment.” Although he concedes that current unit costs are relatively high he predicts costs will come down.
Another agency embracing digital printing is Manifesto, whose brand name for data-based digital printing is Total Visual Imagery. Deputy managing director Joseph Garton explains the concept: “We have used Total Visual Imagery to keep existing customers keen after they have expressed an interest in a product.”
The agency recently carried out what Garton calls a “segment of one campaign” for a car manufacturer using digital printing. “We sent out thousands of pieces of information over a period of months. Our one-to-one campaign was in a relationship situation – not a straight mailing as a result of a fulfilment campaign.”
And the cost? “We talk about relative value, not actual value. It becomes cost effective for our client because we have identified the customers of higher value.”
Garton believes this type of marketing is not just for cars and financial services, but could be broadened – if there was sufficient financial return. “The trouble is, people don’t really understand it. If you believe that personalised direct marketing increases response – just think what a four-colour image could do.”
Mention one-to-one segmenting to most people working in direct marketing and the name Goldfish comes up regularly. Indeed, Goldfish’s latest product, the recently launched Goldfish Guide, seems to be putting the theory of one-to-one segmenting on a wider scale to the test. The Guides are designed, developed and produced by publisher TPD – which also delivers the product. The Goldfish Guide offers impartial advice on aspects of shopping, including when to buy, what to buy and where to buy from.
The customer makes an enquiry about a product in the guide and 48 hours later they will receive a brochure with a personalised introductory letter bearing the specific product information they requested in the areas relevant to where they live.
The current production capacity is 20,000 mailshots a day. This is all made possible through Xeicon data interpretation software that turns the customer data into print.
DP&A is the direct marketing agency which handles the promotion of the guides. The agency’s client services director David May says: “When you talk about one-to-one segment marketing, this could be seen as state of the art. But this is not one-to-one relationship marketing; all that happens is that existing information is being used to fulfil a customer’s need. At the moment, this is the end of the relationship. This technology can be used for one-to-one segmenting but very few people are looking at one-to-one relationships.”
May, like Houselander, cites not just the prohibitive costs of digital printing as a barrier to entry but the quality of the printing as well.
“At the moment the quality is somewhere between conventional printing and colour photocopying. The real use for this is when you know enough about the customer already to make it worthwhile pursuing them into a true relationship, say for a high-ticket item.”
Another issue under debate is whether databases really do enough to separate individuals. Everyone has experienced the personalised letter where your name is misspelt, your sex has changed, or the product information is irrelevant.
David Moody, director of direct marketing for communications agency Perspectives, admits: “The whole exercise can really backfire. You get swamped with information that becomes annoying and intrusive. It can destroy a relationship before it has started.”
Meanwhile, Dawn Orr, director of database marketing and micromarketing for Claritas, believes the technology is there for people to produce tailor-made packages but says most organisations do not have a database which can execute one-to-one targeting.
The reason for this, she says, is because most databases are still transaction-based, not marketing-based. And it is difficult to use transactional data to develop a personal and meaningful message to a segment of one. What you really need, according to Orr, is that essential lifestyle and lifestage data – an understanding of the hierachy of decision-making within the household.
Adrian Jarvis, senior data planner with agency Tullo Marshall Warren, questions the basic requirement for one-to-one segmenting on a mass scale. “None of our clients is considering segment of one marketing because their consumers don’t need it. If you have 50,000 consumers you don’t need 50,000 different messages.”
Apart from the thorny issues of whether there is a genuine need for one-to-one segmenting on a grand scale or whether databases are accurate enough, cost comes up repeatedly as the great deterrent.
Neil Muranyi, marketing director of The Database Group, disagrees with the viability or cost efficiency of one-to one targeting at the moment. “The theory and the mindset is there, but when you look at people’s budgets they just can’t afford it. In an ideal world it would be great to have a relationship with a customer but you can’t afford to market individually to all of them. It’s not just a matter of collecting the data but also deciding how best to use it.”
He believes the advent of digital TV will the understanding of the customer. He maintains that the power of TV will be combined with an individual direct response mechanism.
Individual data can then be collected from prospects and used with broader segmentation tools to establish a dialogue based on those individual attributes.
But while marketing directors debate the needs, costs and considerations of one-to-one segmenting, a brave new world of e-commerce is approaching. According to Marc Andreessen, executive vice-president of products for Netscape Communications, customer relationships are already being formed on the Internet that will make it difficult for late-comers to break into the market. His message to marketers is to get onto the Web now.
As Moody points out: “There are millions of Websites out there. If someone logs on to your site, they are already a warm prospect. An outbound mailing could cost about 1 a piece while an e-mail is free.”
This puts all the arguments about one-to-one segmenting in a new light: increasingly, it will be the cold facts of advancing technology that will create the warm glow of that individual customer relationship.