From the Author
This book is an answer for John Wanamaker.
"I know half my advertising is wasted. The problem is I dont know which half." How many times have you heard that famous lament, or repeated it yourself? Variously attributed to John Wanamaker in the United States and to Lord Leverhulme in England, it surely is the most quoted observation about marketing and advertising ever uttered. But that was a hundred years ago. Theres no excuse for still not knowing in the current data-empowered, technology-enabled environment, when information on everything consumers buy, do, think, and feel abounds, and a computer sits on every desk, ready to help analyze it. The half or more of advertising and all other forms of marketing communications which is wasted is that portion directed at consumers who, despite anything an advertiser ever says or does, will never buy enough to make a difference to the brands bottom line. You may not even be aware that there are consumers like that. I was a marketing and advertising professional for twenty years before I did. The simple truth is that most marketing people dont really have much knowledge about the underlying patterns of consumer buying behavior and consumer value that would allow us to spend our brand-building budgets more wisely. Our entire professional generation has been shaped by the unique challenges and opportunities of the current dominant medium mass television. Because success for the brand seems so dependent on cutting through the boredom and the clutter, we spend all our energy and budget - on achieving broadscale impact - cheaper GRPs, "breakthrough creative," or a :30 slot on the Superbowl or the Seinfeld finale, as though its only getting heard that counts, not who is doing the hearing. Most of us have lost sight of the one surefire path to success building the loyalty of the small number of buyers who drive our category and our brand often less than 10% of all households. But the times are changing. Some of us are starting to use the power of consumer databases to find those high-profit customers. Were integrating direct marketing into the communications mix and planning and buying traditional media in a non-traditional fashion. Were rediscovering that we can stop just counting the customers we reach and reach out to the consumers who really count and build our sales and profit. And the evidence is mounting that it does indeed work today, and even more importantly, in the future. The next dominant branding medium is poised to emerge from the current crop of new technologies, led by the Internet and addressable cable. The unique challenges and opportunities of that medium for brand managers will be very different from those of mass television. Instead of aggregating audiences it will atomize them. Instead of inducing apathy it will stimulate involvement. Instead of breaking down the door, advertisers will be invited in to consumers lives - or not be. Instead of one way communication, or even two-way, it will be more like an old-fashioned party line, linking individual consumers into a network of shared experiences, opinions, and brand decisions. Costs will rise, but so will capabilities, including the capability of identifying and selectively targeting those consumers who can truly drive sales and grow the brand and avoiding those who cant. I wrote this book so that the most famous and repeated observation about advertising will be heard no more. I truly believe that those of us who fail to understand that targeting is king wont be around to bemoan our ignorance in marketings Digital Age. - Garth Hallberg email@example.com
From the Back Cover
All Consumers Are Not Created Equal ". . .This book. . .will open your eyes to a new marketing concept which may turn out to be of major importance."––David Ogilvy All consumers are NOT created equal. Some are vastly more profitable than others, and the marketers who succeed in an increasingly brand–hostile and technology–driven environment will be those who know how to capitalize on the difference. Differential Marketing is a revolutionary new approach that separates the golden eggs from the goose eggs. It uses cutting–edge but practical technology and practices to build old–fashioned brand loyalty––and old–fashioned profits––by communicating more directly and persuasively with the brand′s most valuable customers. And it does so across all disciplines––advertising, sales promotion, and direct marketing. Developed at one of the world′s leading marketing communications agencies, Ogilvy & Mather, and proven in the marketplace by clients like Kraft, Unilever, Kimberly–Clark, and Seagram, this breakthrough approach to building stronger brands turns conventional marketing wisdom inside out: True or False? Most of the profits of many brands––even big brands––come from less than ten percent of all households. True or False? A brand′s most valuable customers give more of their business to the competition than they do to the brand. True or False? The overwhelming majority of brand volume comes from consumers who don′t count or don′t care. All are true. And what they add up to is the need for a radical alternative to current mass market communication methods. Differential Marketing is an overarching concept that combines the power of consumer databases, integrated marketing, and one–to–one relationship building to produce double–digit sales increases from high–profit customers. In All Consumers Are Not Created Equal, author Garth Hallberg provides the inside perspective on what makes Differential Marketing so effective. Best of all, he not only serves up a powerful new vision, but also offers practical advice about how to put it to work to build a healthier, more profitable brand. In the iconoclastic tradition of David Ogilvy, a radical alternative to current mass market communications Finally, a new approach to building brand loyalty that gives marketers a competitive edge in today′s high–tech, high–stakes, brand–hostile environment. Developed at one of the world′s leading marketing communications agencies, and proven in the marketplace by clients including Kraft, Unilever, Kimberly–Clark, and Seagram, Differential Marketing combines the power of consumer databases, integrated marketing, and one–to–one relationship building to produce double–digit sales increases from high–profit customers.