Wednesday, September 03, 2003

One to One Marketing

You meet clients and get asked for business advice in the funniest places. The most bizarre situation I have experienced recently was under a full moon at the Stanford Mausoleum at a discussion group about intellectual property and the Internet.

This past weekend, it was a poetry reading. The executive in question was talking to me about his market position and how they were doing lots of market research on their customers. He talked glowingly of his web site as a source of information about his customers, that was going to help the company figure out what to sell them.

And then he mentioned some large generalist producers moving into his niche market.

I suggested that perhaps he ought to turn around his thinking. It's not like doing market research on your customers actually creates any value or relationship with them. I suggested he ought to be thinking about how he could own the relationship with his customers. Rather that thinking about selling more products to them, I suggested maybe he should be thinking about selling the experience, his customer were buying products to achieve.

He sat back in his chair. You could see the light bulb almost going off in this head as he realized he was talking a product-centric rather than a service and relationship-centric view of his customers. And his one big advantage was his focus. He and his company cared a whole lot more about the experience his customers were trying to achieve than his new and larger emerging competitors.

He thoughy out loud: "So what you are saying is that maybe we should be selling them the full service rather than just the product - the holiday, the organizating of the travel, the information about when to travel, the feedback from other customers."

He liked the idea.

What he had not thought about is what Tracey and Wiersema talked about in their book, The Discipline of Market Leaders, many years ago. You have a choice: you can be the product leader (like Apple), the process leader (like Dell) or the customer intimacy leader (like IBM deciding to buy PriceWaterhouseCoopers Consulting). Each strategy has its merits, but in a world where commoditization is always a risk, owning the relationships with customers and doing one-to-one marketing is increasingly attractive.

You still have to be in the ball park in producing the product, but owning the relationship means that if your products fail to be competitive, you can resell someone else's and not lose the relationship.

Something to think about for man at the poetry reading.

Alistair Davidson

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