320 CHAPTER17 MANAGINGDIRECT ANDON-LINEMARKETING
- To identify prospects:Many companies generate sales leads by advertising their product
or offer and building a database from the responses that come in. The firm can sort
through this database to identify the best prospects and then contact them by mail,
phone, e-mail, or personal sales call in an attempt to convert them into customers. - To decide which customers should receive a particular offer:Companies set up criteria
describing the ideal target customer for an offer, then search their customer data-
bases for those most closely resembling the ideal type. Companies such as The
Limited and U S West are also comparing the marketing and servicing costs that go
into retaining each customer versus the revenues he or she represents. Twice a year,
for example, U S West sifts through its database looking for customers with more
profit potential. By looking at demographic profiles, the mix of local versus long-
distance calls, and the mix of services used, U S West can estimate potential spend-
ing. Next, the company determines how much of the customer’s likely telecom bud-
get is already coming its way. Armed with that knowledge, U S West sets a cutoff
point for marketing spending on this customer.^5 - To deepen customer loyalty:Companies can build interest and enthusiasm by remember-
ing customer preferences and by sending gifts, coupons, and special information.
Consider Mars, a market leader not only in candy but also in pet food. In Germany,
Mars has compiled the names of virtually every cat-owning German family by contact-
ing veterinarians and by advertising a free cat-care booklet to consumers who fill out
a questionnaire. As a result, Mars knows the cat’s name, age, and birthday. Mars now
sends a birthday card to each cat in Germany each year, along with a new-cat-food
sample or money-saving coupons for Mars brands. - To reactivate customer purchases:Companies can use automatic mailing programs to
send customers birthday or anniversary cards, holiday shopping reminders, off-season
promotions, or other timely offers. For example, Streamline is a Boston-based on-line
delivery service (www.streamline.com) that contracts with local groceries, video
stores, and dry cleaners to fill and deliver orders when customers send in their shop-
Mass Marketing One-to-One MarketingAverage customer Individual customer
Customer anonymity Customer profile
Standard product Customized market offering
Mass production Customized production
Mass distribution Individualized distribution
Mass advertising Individualized message
Mass promotion Individualized incentives
One-way message Two-way messages
Economies of scale Economies of scope
Share of market Share of customer
All customers Profitable customers
Customer attraction Customer retentionSource:Adapted from Don Peppers and Martha Rogers,The One-to-One Future(New York:
Doubleday/Currency, 1993). See their Web site: http://www.1to1.com/articles/subscribe.html.Table 6.4 Mass Marketing versus One-to-One Marketing