What is one-to-one marketing?
One-to-one marketing is an approach that is used primarily with customer relationship management strategies/tactics usually where a firm has access to customer database information, or where a firm has the ability to tailor its offering. This is explained in the following description of one-to-one marketing:
- “One-to-one marketing advocates tailoring of one or more aspects of the firm’s marketing mix to the individual customer. One-to-one marketing represents an extreme form of segmentation, with a target segment of size one." (Arora, et al., 2008)
It is important to note that while some niche marketers may use one-to-one marketing, they are quite distinct concepts. One-to-one marketing basically refers to approaching the customer as an individual and having a tailored marketing mix designed for that one customer.
However, many large businesses could undertake one-to-one marketing activities, without being a niche marketer. For example, a large bank, with millions of different customers, could easily engage in one-to-one marketing due to the amount of customer data/information they have. As part of a direct marketing promotional campaign, they could send each customer a unique offer (of account type, interest rate, fees, and other conditions) that is based upon the customer’s particular needs, profile, and campaign response history.
In this example, the bank would approach many customers at once as part of the same overall campaign, but technically each customer has received a unique offering. Clearly the bank is not a niche marketer: they are simply tailoring their marketing mix to meet the unique needs and responsiveness of each of their customers.
The other area where one-to-one marketing is common used is where services can be tailored. If you go to a hairdresser, they will cut and style according to your particular preferences. However, the hairdresser is also not a niche marketer, as they are targeting a particular market segment (say females aged 30 to 50 years) and would be directly competing with other hairdressers in the area.
The area where one-to-one marketing is the most common is in B2B markets, as highlighted in the following quote:
- “When a company creates an entirely unique product or marketing program for each customer in the target segment, it employs one-to-one marketing. This approach is common in business markets where companies design unique programs and/or systems for each customer." (Ferrel & Hartline , 2008)
Therefore, it is important to remember to separate the two concepts of niche marketing in one-to-one marketing. Because one-to-one marketing is sometimes referred to as a segment of one, it the impression that this is somehow related to niche marketing. However, as discussed in this section, niche marketing is a unique form of strategy and target marketing.