Enterprise One to One: Tools for Competing in the Interactive Age

Don Peppers & Martha Rogers, Ph.D. (1997) Enterprise One to One: Tools for Competing in the Interactive Age, NY: Currency/Doubleday, ISBN: 0-385-48205-1. When I taught marketing strategy last fall, I had this student who already had a Ph.D. in pharmacology. As it turns out, this student was Steve Peppers, the brother of Don Peppers. Don Peppers, the one-man phenom of a rain-maker pitch man who was quite at home on Madison Avenue. When they were kids, Steve had competitively excluded Don from a newspaper route via strategic alliance (i.e., parents who forced Don to give Steve a chance). I'm guessing that this hasn't happened too often in Don's life. Having worked as Saatchi & Saatchi, Ciat/Day, Lintas: USA, and Levine, Huntley, Schmidt and Beaver, Don was a Madison Avenue mammal until the day he gave a talk in Toledo in 1990. The talk was on the death of mass marketing and in the audience was Martha Rogers, an assistant professor of marketing from Bowling Green State University. Don's talk not only made it to the advertising column of the New York Times, but it also pricked Martha's conscience about precisely why it is such a dead-end to teach Kotler. On the spot, the two began collaborating, producing first 77te One To One Future and then Enterprise One to One. Confession: I didn't finish The One to One Future So, when in class Steve (Don's brotiier) mentioned the book, I responded with finely honed academic tepid enthusiasm. Dimly, I recalled liking the book's introduction and the world-view, but as each chapter progressed, it seemed to become tangled in its own marketing minutiae. When, six weeks into the semester, the opportunity arose to have Don talk to my class, I took it, but without expectations. Don was stopping in St. Louis on his way home (Connecticut) from a one-week trip that included Mexico, Hong Kong, and.Iowa. Don opened his lecture with a 2x2 model that is the centerpiece of Enterprise One to One, but which does not appear until chapter 3 (see Figure 1). This model is meaningful because it makes sense of the changes in marketing that have been taking place in the last 15 years. The y-axis is the "skew" (in the statistical sense) of customer value. For example, airlines make 80 percent of their profit from 4 percent of their customers. The x-axis is differentiation of customer want, which in the case of air travel is low as people want to get safely from point A to B. When you cross these two dimensions you get a very interesting 2x2 matrix. In the lower left-hand comer you get businesses like Gas stations whose customers profit-homogeneous and who all want the same thing. This is THE QUADRANT that Kotler, McCarthy, etc. have been writing to since the mid 1960s. WHY TEACHING KOTLER IS LAME THE QUADRANT we've all been writing to, teaching and consuming from is in decline. The niche of marketing space is expanding and being split by new species of marketing more finely adapted to the nature of transactions costs and business payment models arising in the new competitive space. The Quadrant II marketing environment, with high differentiation of needs, naturally selects for target/niche marketing. Quadrant III is for 1-to-1 marketing and Quadrant IV is for frequency/loyalty marketing (see p. 65). So, mass marketing has become "clueless" because technical change is driving the y-axis up and the x-axis so far to the right that new marketing ecosystems have been created. So what? Well, "clueless" is what you are when you play by old rules when in a new ecosystem. When you think about it, the evidence of our cluelessness is all around. For example, Clancy and Schulman's (1995) Marketing Myths that are Killing Business, p. 64 "Myth: 39: The focus group interview is a serious marketing research tool. " Perhaps you too have witnessed a backlash, a resentment of, and even animadversion for marketing research and marketing researchers in the past 5 years. …