How One to One Marketing Works

By Leland P Nelson 

One to one marketing or most known as personalized marketing is an extreme form of product differentiation. One to one marketing differentiates products from competing ones by giving unique product offerings for each customer. It is an approach that focuses on providing services or products to one customer at a time by identifying and then meeting their individual needs. One to one marketing had been most useful in interactive media such as the Internet.
This kind of strategy is applicable in all parts of organization like marketing, sales, production, service, finance, etc. Furthermore, One to One Marketing recognizes the lifetime values of loyal customers who make repeat purchases far exceed that of changeable customers who constantly switch suppliers in search of a bargain.
One to one marketing has four main steps to accomplish its desired outcome. Firstly is Identify. In this stage the main concern is to known the customers of a company, to collect reliable data about their preferences. Second is Differentiate. Distinguish the customers in terms of their lifetime value to the company, to know them by their priorities in terms of their needs and divide them into more restricted groups. Third is Interact. The aim in this stage is to know by which communication channel and by what means to contact with the client is best made. It is needed to get the customer's attention by engaging with him in ways that are known as being the ones that he prefers the most. Lastly is Customize. Personalize the product or service to the customer individually. The data that the company has gathered about a customer, needs to be put into practice and the information held has to be taken into account in order to be able to give the client exactly what he wants.
Two forms of one to one marketing are personalization and customization. Personalization is when the company's decision is based on the previous collected data from the customer, what marketing mix is suitable for individual. Example of this is Amazon.com which uses collaborative filtering to find out what book and music to recommend to customers. Customization is when the customer proactively specifies one or more elements of his or her marketing mix. Example of this is MyYahoo feature at Yahoo.com which allows users to specify elements of their home page such as the weather forecast, reports on their favorite stocks, or priorities given to local sports news.