Clusters of one

How do you deliver against a core motivation? The first step would be to define the specific motivation in the context of a delivery framework. There are a lot of companies out there that provide demographic segmentation services, grouping consumers into cute-sounding clusters for purposes of selling lists to retailers who can then target them as a whole. This is an adequate solution, if your smallest acceptable level of granularity is measured in the thousands, but even with this level of analysis and filtration, most retailers are lucky to get a response rate in excess of 2% (or as I prefer, a 98% failure rate). Why does this continue to happen, and why are retailers willing to accept such a dismal response rate? One option is to limit your initiatives to the 2% that you know are going to buy, which, if you can sort them out of the larger cluster, jacks your response rate up into the 90+ percentile. You actually end up with the same new/existing customers, but you haven’t wasted time and effort trying to get the attention of people who do not and are unlikely to care. It’s actually possible to have a cluster of one (I’ve worked with start-ups who’ve achieved this level of granularity), the problem-at that time-was the lack of technology to create a message for that one person cost effectively. A few years later, while working at another start-up, we developed the ability to create content at a granular enough level that micro-messages could be crafted on the assumption that the end destination was a cluster of one. So how do you link these two concepts? That’s one of the things I am working on now, and so far the results look very interesting. More on this later.

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