By Create a Strong Marketing Strategy the Industry is meeting the challenge that customers want more information, communication and personalized service. Traditional marketing techniques don’t satisfy these needs. One to One marketing and relationship marketing endeavors to:

7.2.1.1 Reduce Cost

It costs six times as much to acquire a new customer than it does to retain a current one. So it makes sense to keep established customers satisfied.

7.2.1.2 Establish Loyalty

Customer loyalty is about you and your product, quality and value, service and recognition. When you

create a program that produces real loyalty, customers buy because of who you are — not because of price.

7.2.1.3 Educate Consumers

The more customers know you, the more loyal they become and the more likely they are to buy a wider

variety and quantity of products or services from you.

7.2.1.4 Create Lifetime Value

The longer you maintain your relationship with a customer, the less it costs to serve that customer and the

more profitable the individual relationship becomes.

7.2.1.5 Form a Unique Sales Force

When you develop customer relationships, you develop advocates. By encouraging their enthusiasm, you

create a loyal sales force of customers that sings your praises.

7.2.1.6 Build Your Customer Base

You must recognize the diversity of your customers, identify the best ones and develop an exclusive program in an effort to retain them. You can then focus marketing efforts on identifying and acquiring more like them.

7.2.1.7 Establish a Dialogue

When you establish a two-way dialogue, you can better offer specific products and services that meet your

customer desires.

7.2.1.8 ROI Measurement

The Bottom Line: Your Return on Investment

Just as every client is different, so is every marketing program. The more customized your marketing

program, the better your results. ROI is measured in savings, productivity and efficiency. You can determine your company’s success and ROI by looking at:

7.2.1.9 Savings

Every penny saved goes directly to your profit line. For instance, a company builds a web site that lets

clients track investments online rather than through a customer service rep, enabling it to cut costs associated with staffing and overhead.

7.2.1.10 Information Gathering

The more you know about customer demographics, interests and needs, the better you can position your

products and services. Information enhances every facet of your marketing efforts.

7.2.1.11Productivity/Efficiency

If a quality improvement initiative helps your staff do its job better, faster and more efficiently with fewer

errors, then you’ve just accomplished a great deal.

7.2.1.12 Revenue: How It Works

Everyone wants to see ROI in the form of bottom-line hard dollars. If you spend X amount on a program,

then it returns Y percent in incremental sales. A typical formula would appear as follows:

ROI = Contribution/Cost

If a company has a margin of 40 percent after cost of goods and overhead, the program costs $500,000

and the incremental sales gained by the program equaled $1.5 million, the contribution (at 40 percent) would be $600,000. Based on these figures, the program would have the following ROI:

Divide the contribution ($600,000) by cost ($500,000):

ROI = 600/500 = 120%

ROI can be used to refine and improve program performance over time. Quite simply, any relationship

marketing program should include a plan and timeline for determining ROI to achieve the individual

objectives.

7.2.2 Precision marketing by Debora Kania. Strenghts of the Industry

http://www.searchz.com/Articles/0525991.shtml The Secrets Of Peppers and Rogers

This article give an overview why this points is important strengths of the Industry One to One marketing

Psst…! If you want to make your web site more profitable, here’s the inside scoop. The Peppers and Rogers Group just released «The State of One to One Online,» revealing «the five secrets to competing online…profitably.»

Here’s what works for the top one-to-one marketing web sites. Loyalty. The Peppers and Rogers Group evaluated web sites based on the company’s four one-to-one strategies that can build loyal customer relationships — identifying, differentiating, interacting and customizing.Identifying — Know your customers by building detailed profiles over the duration of the relationship. Entice your web customers to register with your web site so you can identify them each and everytime they visit. The tracking capability of the web allows you to build rich customer profiles using registration, transaction and clickstream data.

Differentiating — Customers love to be treated like they’re special. Your web site should present personalized information and recommendations based on each particular customer.

Interacting — Each visit to your web site is an opportunity to interact with your customers. These visits help you learn more about your customers so you can treat them better the next time they visit your site.

Customizing — Tailor your products and services to meet the individual customer’s needs. Your web site should morph to each customer; content, commerce and other tools and applications should be presented in a personalized way.

«The State of One to One Online» report was the result of poring over the 500 web sites nominated by the readers of the Inside 1to1 e-mail newsletter to select the best sites. After reviewing 51 sites, the Peppers and Rogers Group selected the 32 best web sites that effectively build 1to1 relationships with customers.

Analysts found that there were five key visitor benefits, which they dubbed the top five secrets to competing online profitably.

Don’t just protect customer privacy — tell users how you’re going to do it.
People do business with companies they trust. As you’ve heard from me time and again, protecting user privacy encourages customers to participate in your one-to-one web marketing efforts, and it forges trusting relationships with your customers. The key to being a best 1to1 web site is to be very explicit about how the user information will and will not be used. The sites that Peppers and Rogers Group found to be the best at protecting user privacy were Peapod, FireFly, Dell, CDnow, S&P’s Personal Wealth, FedEx and E*Trade.

Explain your motives for wanting to create a relationship. The best sites are explicit in describing to customers exactly how the customer will benefit through exchanging personal information with the site. I have found that many sites using personalization do not provide enough information and education regarding the benefits that the user will receive. I suggest you don’t bury this information within a privacy statement on your customer service page or within another page. Put it smack dab on the home page! Peppers & Rogers Group found that Amazon.com, Lands’ End and When.com explained their motives very well.

Organize around customer needs — not products. The Peppers & Rogers Group selected Fidelity, Amazon.com, TicketMaster, Movie Critic, Garden Escape and 24.com as sites that exemplified the best practice of organizing the web site according to the customers. Organizing around customers rather than products enables the customers to find information quickly and find products that are relevant to their interests. I put this secret high on my list. It takes a great company that is truly in tune with customer needs to foster loyalty. Of course, to implement this type of system, you have to walk in your customers’ shoes.

Give customers individual control. Isn’t this a great secret? I highly advocate user-managed profiles, because the customer who invests time and information in your web site is or will be a loyal one. Peppers and Rogers Group found that the best of the best sites personalized content for individual users, allowed customers to update personal profiles, enabled customers to customize the site look and feel, and/or allowed users to store multiple billing and shipping preferences. The top selections included Realtor.com, When.com, 1-800-Flowers and AA.com.

Motivate customers to collaborate with you. This is where exit barriers come into play. Peppers and Roger Group believes the very best web sites observe user behavior, transactions and site interactions to anticipate needs, providing personalized information or recommendations. Some of the best include TheTrip.com, When.com, 1-800-Flowers, and Baan.Says Julien Beresford, Peppers and Rogers Group director of research and publications: «Typically these sites recognize returning customers, communicate that they want to create a relationship, anticipate user needs based on internal and external data, and make a bargain.»Making a bargain means that you provide an explicit benefit to the customer to entice them to register and share information. At a minimum, practicing secret #1 and #2 will do this. You can also provide online-only promotions, services, discounts, membership clubs, etc.

7.2.3 Other Strenghts

CIO Enterprise Magazine

http://www.cio.com/archive/enterprise/111598_market_content.html

More than anything, the Internet has precipitated the trend toward one-to-one marketing. It is certainly the most economical way to communicate with customers, says Tom Haas, vice president of consulting at Hunter Business Direct Inc., because it only costs about 5 cents to e-mail a customer, compared with as much as $5 for direct mail, $8 to $24 for telephone sales and $40 to $400 for a field call from a sales rep. And it’s definitely faster.

7.2.3.1 Benefits for the company/industry

Distribution
some products lend themselves to electronic distribution (thereby eliminating the middleman?)
cutting distribution costs to almost zero
transfers»selling» function to customers (is this good?)
capture of customer information (ethics, security, legal issues)
Marketing Communications
internal and external communications
interactive nature conducive to developing customer relationships at both parties convenience
available 24 hours a day
customized advertising and promotion
offers competition on speciality axis rather than price alone (is this what we are seeing?)
price may be least important (1995 survey) but is that the true picture
price still important for gathering information and making purchase decision
Operational
reduced errors in informational processing
eliminate delays between different steps of business subprocesses
Big numbers of customers
Know-how – about customers and trends
Speed
Cost savings
New customers
Access to global markets
24-hour shopping

7.2.3.2 The benefits from the customer’s point of view include:

greater selection of products and services
Competitive prices
Saves time
An enhanced shopping experience
access to dynamic (salient, relevant, timely) information
comparison shopping
hard-to-find products
customized shopping (and products)
time savings (if you know how to find it)
available 24 hours a day
intrinsic benefits? (just by using Web)
controlled by customers (but is it?)

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Research Project: Internet Situational Analysis of 1to1 Marketing/CRM from Jan Vig at Griffith University , Australia 1999/2000

Content

Chapter 7

SWOT

7.2

Strengths