Personalized marketing Did You Mean Personalized?

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Personalized marketing (also called personalization, and sometimes called one-to-one marketing) is an extreme form of product differentiation. Whereas product differentiation tries to differentiate a product from competing ones, personalization tries to make a unique product offering for each customer.

Personalized marketing is most practical in interactive media such as the internet. A web site can track a customer's interests and make suggestions for the future. Many sites help customers make choices by organizing information and prioritizing it based on the individual's preferences. In some cases, the product itself can be customized.

Don Peppers and Martha Rogers, in their ground breaking book on the subject (Peppers, D. and Rogers, M. 1993) speak of managing customers rather than products, differentiating customers not just products, measuring share of customer not share of market, and developing economies of scope rather than economies of scale. They also describe personalized marketing as a four phase process: identifying potential customers; determining their needs and their lifetime value to the company; interact with customers so as to learn about them; and customize products, services, and communications to individual customers.

Some commentators (including Peppers and Rogers) use the term "one-to-one marketing" but this is a misnomer. Seldom is there just one individual on either side of the transaction. Buyer decision processes often involve several people, as do the marketer's efforts.

References

Peppers, D. and Rogers, M. (1993) The one to one future : Building relationships one customer at a time, Doubleday (Currency Books), New York, 1993 ISBN 0-385-52528-7

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