October 9, 2005
1:1 Marketing Goes
As an influential thought-leader whose groundbreaking books include, Enterprise One-to-One: Tools for Competing in the Interactive Age, and Return on Customer: The Revolutionary New Way to Maximize the Value of Your Customers, Don Peppers advises a Who's Who of international marketers – AT&T, Ford and 3M, among others – who count on him for insight on using technology to build unbreakable customer loyalty.
But that proposition is about to become increasingly complex – and powerful – he says, as the convergence of wireless technologies and global positioning systems transform the notion of reaching customers where they live.
Author Rick Mathieson interviewed Peppers as part of a series of exclusive, Q&A-style interviews with some of today’s top marketing and business strategists for the book, BRANDING UNBOUND: The Future of Advertising, Sales, And The Brand Experience In The Wireless Age (AMACOM Books, July 2005). The following is an edited excerpt of that interview.
Rick Mathieson: How will mobility change our idea of what constitutes the “brand experience?”
Don Peppers: The most compelling aspect of mobility is the continuous management of evolving relationships with individual consumers. You can be continuously connected with a customer, not just when he's sitting in front of a computer. You can actually get feedback, and real transactions, on a real-time basis – it’s as if you're tethered to your customer's life. And that means there is tremendous opportunity in using mobility to increase the value of each customer, and your value to him or her.
Today, most of us can barely imagine life without a cell phone. Consumers are getting used to always-on communications, and those communications are gaining utility. As a result, companies that provide services and maintain relationships with customers are going to have to participate in this channel. And yet, companies are going to have to do it in a way that is non-intrusive, because nothing will give a customer a bigger red face with respect to a company than if that company begins to interrupt him or her in order to try to sell them stuff.
Our central mission becomes finding ways to increase short-term profits, while promoting behavior that increases the long-term value of that customer. It happens when we earn the customer’s trust, treat the customer the way they’d like to be treated, and actually act in their best interests in a way that’s mutually beneficial.
For instance, if I'm AmeriTrade, and I have a customer who trades three or four times a day when he's in his office, but he doesn't trade when he's traveling, I'd strongly consider giving him a Black Berry and a wireless trading account. It's win/win for both of us. The customer gets convenience, and the company gains potential new revenues.
RM: Many think mobility will enable further disintermediation of services. But you envision the rise of ‘Digital Aggregation Agents’ that enable companies to deliver 1:1 services based on my needs and location – as long as they play by my rules. What's the business model for these DAAs?
DP: Instead of giving out personal information to every vendor that I might deal with in the mobile medium – my news service, my broker, my concierge, my travel agent – I'm going to want one entity that remembers my preferences and needs, but that provides me anonymity.
One entity that knows my account numbers for all the different companies I deal with, across a lot of different platforms and different mobile media. And that entity is something we call the ‘Data Aggregation Agent.’
The DAA is going to simplify the consumer's life because it will save them a great deal of time and energy. I'm not going to want to fill in my speed dial numbers, my friends’ names and email addresses, my credit card numbers, my social security numbers, my everything, for everybody. The DAA will store all that information for me in one place, and then partition out data to companies as I see fit. It's just a hypothetical, science fiction possibility, of course. But I think it's a compelling new business model for the future, and could have a tremendous impact on the nature of competition in this medium.
RM: You’re talking about some pretty valuable information. Seems like a lot of companies would fight over playing the role of DAA.
DP: You bet they will. Already, there are a lot of infantile battles going on among businesses that all think that they can be Data Aggregation Agents.
But in the end, everybody can't win. The most compelling business model is one where the consumer gets the value. And the value I'm getting if I'm a consumer is convenience, relevance, and not having to fill out the same form or keep track of different account numbers. So there are a lot of reasons why the Data Aggregation Agent model is going to work. That role could be filled by a wireless carrier like Verizon. It could be filled by an airline. It could be AOL or Yahoo. Or it could be filled by completely new
RM: As wireless moves into the in-store experience, what opportunities will there be to maximize the experience for customers?
DP: I think RFID technology, in particular, has a great deal of potential for that. The future of RFID is that I have my credit card in my wallet, I walk into the grocery store, I put a bunch of shopping products in my bags and I walk out the door and take them home, and I’m automatically billed for them. I don’t need to stop at the check out counter, and I don’t have to do anything but walk out with my products. I think that will be highly desirable for consumers. But there is a big-brother aspect to the technology that is awakening some of the Luddites in the business, who say, gee, I don’t know if I want companies tracking every movement that I make, and so forth. But I think on balance, consumer convenience is going to be the trump card. That said, whether it’s in-store, our out in the world via [RFID or] consumer cell phones, companies will have to be very careful about how they apply wireless technologies.
In this medium, you're playing with fire when it comes to privacy. It's impossible to architect the regulatory structure in such a way to ensure that you're not going to get hit with some kind of privacy problem.
The best defense is to adopt a holistic view of your business. In my conception, every business would visualize their service in terms of treating their customers the way you'd want to be treated. The golden rule of marketing, if you will. With that in mind, you simply can't go wrong.
RM: The same applies to 1:1 mobile marketing, no doubt.
DP: If you're driving down the street and an ad comes on because you're a block away from McDonald's, you're going to be extremely irritated.
But unlike a lot of folks, I don't think that means push is going to always be excluded from people's requirements – as long as it's pushed at the customer's initiation and doesn't trespass on the legitimate use of their time.
For instance, if I execute a trade on my cell phone, and you're my online brokerage, I don't mind you piggybacking an ad for an offer I might be interested in at the bottom of an order confirmation. Or if you're Amazon, you might recommend an additional book based on my profile. Or American Airlines might send an email about cheap tickets I can buy because they haven't sold enough seats to the locations on my preferred destination list.
I can see a lot of potential for that kind of push message – as long as the customer say's it's okay to send them. Because whether we're talking about an ad message, a service, or a transaction, it's all about using mobile technologies to add value to our customers' lives based on what they want, where – and when – they want it.
If you get it right, you win big. If you get it wrong, you're history.
For the complete Don Peppers interview, and other exclusive Q&As featuring Seth Godin, author of Permission Marketing and All Marketers Are Liars; Tom Peters, author of In Search of Excellence and The Brand You 50; Christopher Locke, author of The ClueTrain Manifesto, and Gary Hamel, chairman of Strategos and author of Leading The Revolution – as well as the inside scoop on marketing’s new mobile age – pick up BRANDING UNBOUND today. Wherever books are sold. www.BrandingUnbound.com
“BRANDING UNBOUND is an indispensable guide to the emerging opportunities in wireless marketing. Rick Mathieson has given us a forward-looking perspective that succeeds in being both visionary and grounded in reality.”
– Ingrid Bernstein, Senior Vice President, Director of Creative and Strategy, iDeutsch, NY
“The road map to the right now. Provocative. Up to date, to the last nanosecond.”
– Steve Simpson, Partner & Creative Director, Goodby, Silverstein & Partners, SF
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Adapted from BRANDING UNBOUND: The Future of Advertising, Sales and the Brand Experience in the Wireless Age © 2005 Rick Mathieson, Published by AMACOM Books, a division of American Management Association,