One-to-one communication should be the Holy Grail of marketing – if it is all about me, then I will buy it. But why not reorganise all your communications as 1:1 communication? Why should we ever do it differently? In this post I will focus on why it isn’t that simple to only communicate 1:1 with your customers – new and existing. What should it take to make it possible in your company – and how will it be profitable to go down this road?

Can one-to-one communication pay off?

In relation to the preparatory work for my book “Make it all about me – and I’ll buy it!”, I did some research on this subject and I gathered some of the experts within the field of digital communication for a Roundtable event. This blog post is based on the sometimes quite lively discussions we had and of course on the research I did for the book. The by far most general subject of the day was profitability, which inspired me to write this post. Is 1:1 communication profitable? What needs to be done?

What if no one knows my brand and my product?

If no one knows your brand and your product, it will naturally be quite difficult to make 1:1 communication because that means that you’re not in contact with any cus-tomers – it will definitely not be quite profitable to contact everyone manually – un-less you have a very large order size and have to use a very small volume of customers to keeps it going around – then grab your phone!

That is why it is so fundamental that you recognise your customers and, in particular, contact them directly on a one-to-one basis – 1:1. You will need to use some form of permission to contact them – whether it is on the mobile, in the mailbox or in the news feed. Therefore it is essential that you collect permissions as a separate discipline. Be-sides, it is important to reach a certain volume to be able to ensure profitability. In Denmark, the databases are huge with over 1 million recipients – how many customers and prospective customers could you contact directly without paying for it?

What if I don’t know my customers?

Data, data and data – it will be difficult to talk about anything else than yourself and your services if you have not had any form of history with the customer in order to control further dialogue. The explosion in recent years in the number of digital devices which consumers use to search the market can give you the ideal opportunity to listen a little before you speak. Make sure you collect the digital footsteps of your customers systematically and save them systematically so that later you will know exactly who is interested in what. You do not have to just listen – a question once in a while can be appropriate – asked either directly in surveys or quizzes or more discreetly in the form of specific observation, e.g. click patterns – does this customer click on the male col-lection or the female collection? Does she look for skirts or blouses? Etc.

When you later have to use the data to communicate, then volume again becomes a determining factor for profitability. Consider data as the quality factor for your leads, where the volume naturally is the quantity factor. If at the same time you have a big permission base, you can benefit from your collection of data, often through your own media, often making it cheaper than collecting new leads to customers and permissions.

It is too expensive to produce content for every single micro-segment

With all the different possible combinations of products, interests, motivations and behavioural patterns, it quickly becomes chaotic, not least expensive to produce rele-vant content for every single conceivable opportunity – whether or not you are plan-ning to work with a dynamic content and only replace parts of the content, e.g. in the newsletter. In an automated setup, which you will definitely need all content will not be used in the same way from day one – there will always be some combinations or micro-segments that will occur more frequently than others. That is why it is necessary to consider the production of relevant content from a profitable point of view – and this has to be based on insight. Insight into where the income lies in your products and what the sale of the single product means for further customer behaviour and the total lifetime value for the customer. Begin where there is volume and where the sale is expected to have most impact on the impact expected further down the line. Good gymnastics with Excel and Google Analytics can be enough to start with, but data mining integrated data in a data warehouse may well be necessary for prioritisation in the longer term.

I cannot figure out who should have which message at which time

Timing is essential – if you do not know when which of your customers will be open to receiving your message, you will once again run the risk of not achieving your pur-pose. Again, it is not profitable to manually conduct this monitoring and later trans-mission/exposure of the right messages – it easily gets too complicated. The answer is marketing automation, which makes it possible to communicate 1:1 in a profitable way. Therefore, you will need to invest in a marketing automation tool, which can deal with the rules for who should be exposed to what, at a given time. It can easily become a bit nerdy and the data integrations are not necessarily simple and often they are not concerned with your other deadlines – but it is all worth it if you have much permis-sion and enough data.

It takes too long to put into system and we have to sell something now

It soon becomes a long process when you first have to collect permissions, then collect data and afterwards find insights and lastly organise automated communication. This can conflict with the often more short-term goals that you are working towards. These goals are often based on common sense – if you do not sell a certain amount this year – then there will not be enough money to cover operations and earnings and you will never reach your expected and long-term prize.

So the answer is not to stop communicating with the masses, but immediately start thinking about collecting permissions and data as part of the traditional above-the-line campaigns. If your advertising agency has not moved with the times, they might resist a bit – since they are probably not so interested in making the next attention-grabbing commercial film and they will argue that brand messages are better off without inter-ference from subordinated messages about giving permission, becoming a member and suchlike. But make sure you think about dialogue when putting together your cam-paigns – make sure you have something valuable to give your customers in exchange for their attention, their permission and their data, e.g. trying your new burger for just a dollar or the chance to take up an excellent offer further down the road or some-thing even more appealing.

On the other hand, you should not think that you need to offer something complex and very valuable in this trading exchange – consumers are used to being a part of these trading exchanges and do not expect to receive the Earth. Make it easy for them to understand the overall value plus the value of signing up – you will then see it hap-pen – unless you abuse their trust, then they will unsubscribe…

If you include permission collection and data collection in your existing campaigns in this way, you will fairly quickly achieve the volume and data – and as a result, achieve more effective 1:1 communication with a higher volume than otherwise. So, although adding the value of 1:1 communication is often incremental and long-term, you can do much to make sure that it becomes profitable in a faster way – you could even time it in line with your financial years so that it coincides as early as your first year.

My colleagues have other agendas and are planning something else

If you are sitting in an organisation where you are primarily organised so as to opti-mise production and operations, it can be difficult to find the willingness to enter into a collaboration – something that is absolutely necessary for working not only with permission collection and data collection, but also the integration of diverse data sources and orchestration of automated communication. Within the marketing de-partment, silos can be created both for the arranged KPI and the data . It can be diffi-cult to agree internally in marketing, when you are up against the often channel-specific goals, which have been set at the last appraisal interview and which maybe is decisive as to whether the individual receives her/his bonus or not. Maybe, the em-ployee responsible for the channel will realise that it will be easier to reach his/her goals when data is shared. Yet, this often means that more data must be collected and, unfortunately, usually also integrated – development and integration.

You probably won’t be able to avoid IT. Is your IT boss primarily measured based on the uptime of the business systems or on how well he/she can help marketing with keeping track of collecting and integrating data correctly and effectively, making it available before the deadline on Friday for your campaign? My guess is the first op-tion – not that the second shouldn’t also be done and considered etc. “But when the shit hits the fan…” then the focus will be back on the uptime and the ERP system and then your Friday deadline is not just secondary – it is not even important.

What if IT and Marketing were to have the perfect cooperation and help each other in such a way that they agree on creating the best conditions for marketing and sales – wouldn’t everything be in perfect order then? The last crux concerns organisation, including ensuring employees are competent and have incentive as they are the ones who meet your customers every day. Are your employees in customer service and in the branches rewarded for collecting data, permissions and, in particular, do they have the competence and the systems to use this data again – where it means the most – the direct contact? The retail side of things is soon to be the only channel providing a worse 1:1 service. You could of course be lucky, but way too often I meet some young Swedish guy studying at Copenhagen University, but who is making extra money on the side by working in a shop. The problem here is that he is not motivated or competent and he doesn’t have the right tools to start a dialogue with me and pick up from last I visited, when I had a social interaction with the brand he is representing.

It can be difficult to change the above – and it is probably the biggest barrier to mak-ing it profitable for you to organise more and more of your 1:1 communication. If you have organisational buy-in, it is easier to get by with competence development, system development and organisational development – otherwise you can follow the subver-sive technique.

Unless your company is newly established, you probably have access to one or more form of data on a small part of your customer base. Try to keep an eye on the experi-ments conducted on this data and document the relative effect that use of this data has. Then, calculate how things could have been, if you just had enough permissions and data. Then use this calculation in your organisation to get things moving by put-ting your project on the agenda for next year. And above all things – don’t panic! It is just as difficult in your organisation as it is in others.

Is it that profitable or what?

The answer is that it can be profitable and even to a degree you would not have thought possible. You see, the underlying business models behind 1:1 communication involve high automation and implementation, which incrementally, but safely, creates more and more value for the same effort. Lead maturation is an automated program that, when it first runs, creates continued value. Of course you would have to optimise and improve – but the value will still come – month by month.

So the answer is yes, but it means that you must have lots of permissions, that you have data on your customers and prospective customers and that you are capable of using it.

The chicken or the egg

So is it best to first concentrate on the communication that gets attention – and then start systematically working on maintaining and developing customers via 1:1? Or should it be the other way around? Should we turn on the water before putting in the plug?

The benefit of the first alternative is that you will make money quickly – especially if you have a product which has relatively a low entry barrier/price and, thus, does not require as big a lead maturation as e.g. selling a car.

In contrast, the other alternative ensures that when you first pull leads and interest via your pull communication, there is already a platform for ensuring optimal use and payoff from your media budget right away. If you have existing customers, but you have a problem when it comes to price per new customer, repurchase frequency or customer defections, there should be no doubt… Whether to choose one or the other your decision and will of course depend on your specific situation.

Whichever you choose – good luck!

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