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WHAT'S IN STORE?

The One to One Future," by Don Peppers and Martha Rogers, Ph.D., is an excellent overview of what they see as the future of marketing -- building relationships one customer at a time.In the book, they make some interesting points, particularly about technology. "Today there is more computational power in a new Chevrolet than there was in the Apollo spacecraft that went to the moon. "For what it cost

The One to One Future," by Don Peppers and Martha Rogers, Ph.D., is an excellent overview of what they see as the future of marketing -- building relationships one customer at a time.

In the book, they make some interesting points, particularly about technology. "Today there is more computational power in a new Chevrolet than there was in the Apollo spacecraft that went to the moon. "For what it cost a 1950 marketer to keep track of all the individual purchases and transactions of a single customer, today's marketer can track the individual purchases and transactions of several million individual customers, one at a time."

Technology is changing the way we do business. A further example of this emphasis is in Brand Marketing, which covers technology in this section, and also in the new Productivity section (see Page 16). One important change is that the cost of telecommunications will plummet. Faster, cheaper communications will dramatically impact the way we market. Among other things, it means supermarket retailers could collect UPC-level data with frequent shopper programs. Few of them do so now because of space constraints on their in-store systems, and the cost and time it takes to communicate so much data. As you know, UPC-level data is needed for frequency programs to have value for manufacturers and retailers. Without it, retailers can't know the profitability of each customer. Manufacturers can't know, either, because they can't tell who is buying products only when promoted, and who is brand loyal.

Faster communications also impacts the manufacturer environment. Huge amounts of consumer-specific purchase data could be stored on one client-server system, and accessed by hundreds of brand managers with lightning speed. The faster we can move information, the better we'll be able to use it. If you're going to learn to differentiate consumers, not just products, you need information at your fingertips.

For one-to-one marketing, a lot of data and very sophisticated programs are needed. We have to market one-to-one correctly, or we could mistakenly lose the very customer we're focused on. Giving rewards to the best customers, and incentives to the other customers, are good ideas. But, in doing so, we have to be careful not to alienate either group. An example of a good-idea-gone-bad comes from a large European chain that sells many of their own wines. They sent a mailing for the equivalent of $5 off any wine to consumers who never bought their wine. Soon after, complaints came in from the regular wine-buyers, asking why their neighbors who never buy wine received this "gift," and they did not. Finally, there are lifestyles and lifetime value to consider. If we aren't sophisticated enough to apply this information, we risk making bad decisions about current and future good customers. Technology is moving rapidly, and will make exponential leaps in the next few years.

Carlene A. Thissen is president of Retail Systems Consulting, Naples, Fla.