Relevance has always been the key to successful marketing.  Long before the rise of advertising and mass distribution local merchants knew their customers needs because their customers were their neighbors.  The relationship was 1:1.  It worked but it didn’t ‘scale’.

Now, 21st century technology has made relevance possible once again.  And what we’ve learned with a certainty is that the more relevant the offer, the more successful the campaign.

It’s not enough to personalize a mailing with the customer’s name.  Individualization – the ability to make appropriate offers to each customer – can make the message more relevant.  It’s the key to creating true one-to-one direct marketing campaigns.

Whether you are campaigning to win-backs or one-time buyers, to underperformers or to your top customers, accurate predictions about which products customers are likely to buy can send response rates and revenues off the charts.  Our customers have seen it happen.

We’re often asked how Loyalty Builders’ customers are able to send unique, individualized communications to each of their current customers.  (Obviously it’s not feasible to create 100,000 different messages, or discount plans for the 100,000 different customers.)

Products are key

The answer is to use product propensities.  Each postcard or email features the unique products or services that analytics predicts will be attractive to the recipient at the time they receive the communications. The recommendations come from analyzing customer behavior.  Our predictive analyses can produce 100,000 or 1,000,000 individualized sets of product recommendations, each one tailored to the recipient’s likelihood to purchase.

There are two types of product recommendations. Up-sell recommendations suggest products that are identical to or similar to products the customer has already purchased.  Cross-sell recommendations offer products that a customer has not bought before.

It’s easier to predict the success of up-sell recommendations and they usually generate high response rates.  Cross-sell is the harder task, but very important for building share of wallet and deepening a customer’s relationship with your company. You should make both kinds of recommendations.

No matter what kind of recommendations you plan to make, individualized marketing should deliver double-digit response rates.  If not, someone’s made a mistake somewhere in the process.

At Loyalty Builders, we’d like to see a lot more campaigns based on individualization before we declare traditional methodologies dead.  But we’re convinced that individualization is the future, which makes it an exciting time to be in this marketspace.

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