ratios, and high turnover among employees. Some businesses responded by treating all consumers the same. Others used database
marketing to divide consumers into segments based on demographic characteristics such as ZIP code, income, and occupation and
marketed to each segment as a group. In some cases database marketing chiefly treats consumers according to their individual needs,
but in other cases consumers treated as part of a segment find that the business no longer understands their individual preferences,
needs, or desires.
One-to-one marketing (Peppers & Rogers 1997) attempts to overcome the impersonal nature of marketing by using technology to
assist businesses in treating each consumer individually. Part of one-to-one marketing is the capture and use of consumer
preferences (e.g., learning that a particular customer always wants gifts shipped overnight or that a particular customer collects an
entire line of porcelain dolls). Other parts involve changing business practices to use the consumer knowledge gathered by the
business.
Recommender systems are a technology that helps merchandisers implement a one-to-one marketing strategy. The recommender
system analyzes a database of consumer preferences to overcome the limitations of segment-based mass marketing by presenting each
customer with a personal set of recommendations. Of course, recommender systems are not a complete solution. It is still necessary
to record and use other consumer data, such as preferred credit card and shipping address, to deliver complete one-to-one service to
consumers.
Ad targeting, or more generally offer targeting, is an attempt to identify which consumers should be made an offer based upon their
prior behavior. Traditional marketers watch for a given “event” in a customer’s life and then aim specific advertisements or offers to
the consumer. When a consumer applies for his first credit card, he begins receiving offers from numerous banks for their version of
the card. When he purchases a house, he begins receiving offers for loan consolidation, second mortgages, life insurance and
aluminum siding. When he has a child, he finds himself inundated with advertisements for everything from diapers and formula to
book clubs and, once again, life insurance.
Offer targeting treats consumers as both individuals and as members of a market group. Offers are typically made to all consumers
whose names appear on a list (i.e., the “just acquired a mortgage” list). However, individual customers are added and removed from
these lists based on their individual behavior. Achieving a “life event” gets a customer added to a list. Consumers who continue to
ignore the offers will eventually be removed from the list.