Big Data Makes Way for the Segment of One

marketing_to_one_305086 As the famous Henry Ford quote goes, "I can make a car in any color you want as long as it's black." While we can all praise him for his confidence,  the truth is that in his time he had every reason to be confident. He had complete control over his domain. He was the only one making cars, everybody wanted one, and to boot he had mass production on his side with his invention of the assembly line.

In Henry Ford's world it was all about making the product then watching the consumers jump on it. Soon afterward, the small and relatively young marketing world required personal selling, one-on-one on the salesroom floor. Then it became about automation, mass-advertising and pushing the product at the masses.

Now it's come full circle and we're back to stressing personal relationships with single customers. Enter the segment of one, a marketing concept that basically means that a company micro-segments into such fine, small groups that each one only has room for a single person.

So who is doing this? Of course, the major players like Amazon, Netflix, and Pandora target users on an individual basis. Amazon, for example, collects your search history and past purchase history to create a consumer profile that becomes more detailed the more you interact with their website. They then put predictive algorithms to their vast stores of customer interaction data in order to accurately predict what you will want to see and buy, which they then deliver to you through a plethora of channels- ads, recommended products, emails, etc.

Netflix follows a similar approach. They know your show and movie watching preferences based on your past viewing material. They figure out (through comparison against their database) that if you like to watch Show X you will also like Show Y. Obviously their algorithms are more complicated than that, but that's their basic predictive principal that leads to their customized treatment of customers.

The thing about these processes, however, is that the companies get more accurate results the larger the data set is. Similar to the way that a larger focus group or amount of trials leads to more accurate results within an experiment, the key to these sorts of analytics is that the larger the customer base and the more data on each customer, the more accurate their targeting is. And the more you use their website, the more data they have on you, the more accurate the consumer profile they create, the smaller the group they can segment you into, and thus the more pertinent information they'll be able to offer you.

So what does the future look like for the Segment of One? Basically segmenting into groups of a single user is the height of personalized relationships and the closest thing we can get to having one-on-one conversations with every client in this modern world. Although the process is actually quite impersonal and automated, the more accurate the segmentation is the less automated it will feel to the consumer. The larger the database of comparison and the more accurate the analytics processes, the higher the ability to create a fairly accurate estimate of your likes and dislikes early on and the higher likelihood that you can be converted into a long-term high-value asset.

Relationships are the present and certainly the future of marketing. Companies need to focus their efforts not only on throwing their net out into the market to snare strays but also on luring in and sustaining repeat customers through conversation-centered marketing. If you know what a customer wants, you'll be able to imbue your encounters with them with relevant, interesting and thoughtful information that will apply only to them. And voila! You have nest of repeat customers, a web of segments of one.