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Appealing to a ‘Segment of One’ | is it a lost hope?

 This post from Jean at Javelin, resonates with me.  During the early days the apparent truism that all a customers information could be simply assembled on one page, drove enormous assumptions that were over-stated.

In an ideal world, FIs would have all information necessary about each individual customer’s preferences, life stage, demographic and psychographic profile, and endless other details that make the market-of-one more of a reality and less of an ideal.

Source: Javelin Strategy and Research » Appealing to a Market of One

The early promise was in fact a theory more than reality. 

This from Information Week in 2000

mbanx is aiming at marketing to a segment of one, I.e. the individual client. It wants to be a person-to-person bank through the use of IT. By 2005, mbanx expects to be the largest segment of the Bank of Montreal’s business and is rapidly working to expand its services to provide even more personalization and benefits than it already offers at present.

Source:  InformationWeek

And this from yours truly in 1998, suggesting that we would magically collect sufficient data to support the ‘segment of one’  …

“Customers are a little bit leery about having too much information and power in the hands of banks,” says Colin Henderson, senior marketing manager at Mbanx, a division of Bank of Montreal. Mbanx is using forms to gather information to be used for generating personalized Web pages.

Source:  InformationWeek

Those were the heady, pre dot com days.  Internet could do anything.  Now that we had a web page consolidating each customers’ information, it was merely a question of pulling the right data from customer data warehouses’, running appropriate analytics, and presto, the customer would partake in a perfect world, seeing only what mattered to them.

Some reality checks:

  1. the costs of assembling and connecting the information was underestimated
  2. the ability to connect the information was underestimated
  3. the availability of the right information was completely underestimated
  4. the assumption that requisite analytics would provide the intelligence was underestimated

so what we have at best is customers being treated to suggested products based on assumed propensity to purchase.  This was part of the failure in the analytics point 4.  We assumed that customers are always sitting there ready to purchase, and once we get the right place, right time, sorted out, they would magically buy from us.  It is  clearly evident that the complexities of how people purchase things was not understood at all, and in most of the four respects above, we are still in 1998.

PS …  Can’t wait to see Ron’s view on this – he is an real expert in this field, having studied it, and Banks for a long time.

 

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2 thoughts on “Appealing to a ‘Segment of One’ | is it a lost hope?”

  1. Hmm. I still think there is more potential here than you imply. Banks, and others, are failing at this for many reasons not just those you list. They fail to really consider decisions (about cross-sell, pricing, upsell) as distinct from their processes and they have, as a result, far too many places where customers are treated as an undifferentiated mass. In those circumstances the occaisional targeted offer seems creepy not reassuring and attractive.
    Markets of 1 means ALWAYS treating customers based on what you know about them, not just when it suits you!

  2. @James … I agree on the potential. I remain skeptical about the capability of Banks’ however, for the reasons outlined. I hope I am proven wrong.

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