Despite being introduced in enterprises large and small over two decades ago, the full potential of CRM is only beginning to be realized. Of course, every company must offer great products and services. But now, rather than pursue all types of customers at great expense only to lose many of them, the objective is to focus only on those particular customers with current and long-term potential in order to preserve and increase their value to the company.
In this fourth edition of their widely used textbook, Peppers and Rogers offer a careful context as well as modern thinking on how to grow the value of a company by growing the value of the customer base, how to increase profits by using modern technology and behaving ethically, and how to look ahead to what will be coming next.
Philip Kotler
S. C. Johnson Distinguished Professor of International Marketing,
Kellogg School of Management, Northwestern University (Emeritus)
Philip Kotler is widely known as the father of modern marketing. His textbook Marketing Management, coauthored with Kevin Keller, has become the foundational text for marketing courses around the globe. First published in 1976 by Prentice Hall, it is now in its 16th edition. In addition to his many books and university honors, Dr. Kotler has established the annual international World Marketing Summit, now in electronic format to reach audiences worldwide.
Note
1 1 Juliette Powell, 33 Million People in the Room (Upper Saddle River, NJ: Financial Times Press, 2009), pp. 8–9.
Preface
The One to One Future: Building Relationships One Customer at a Time was our very first book, and we sent it to the publisher in February 1993 (“paper manuscript only, please; no electronic files allowed”). During the three previous years it took us to write the book, we often referred to it as a work of “business science fiction,” in which we were trying to imagine how businesses would compete once interactive technologies became ubiquitously available. And while we thought the future we were describing was technologically inevitable, we also judged that it was still 10 or 20 years away and would most likely arrive when fiber-optic cables were finally connected to individual homes and offices.
On p. 5 of our book, we said that in the 1:1 future:
products will be increasingly tailored to individual tastes, electronic media will be inexpensively addressed to individual consumers, and many products ordered over the phone will be delivered to the home in eight hours or less. In the 1:1 future businesses will focus less on short-term profits derived from quarterly or annual transaction volumes, and more on the kind of profits that can be realized from long-term customer retention and lifetime values.
We went on to describe some of the social implications of truly ubiquitous, always-on interactivity, suggesting that our vision of the 1:1 future:
holds immense implications for individual privacy, social cohesiveness, and the alienation and fractionalization that could come from the breakdown of mass media. It will change forever how we seek our information, education, and entertainment, and how we pursue our happiness. In addition to the “haves” and “have nots,” new class distinctions will be created between the “theres” and “there nots.” Some people will have jobs that require them to be there—somewhere—while others will be able to work mostly from their homes, without having to be anywhere.
However, while we thought this future was still a decade or two away, the year after our book was published Netscape released its Navigator web browser, the first commercial product that truly allowed businesses to participate in a completely new interactive medium, the World Wide Web. And commercial interest in the World Wide Web grew explosively. There were just 130 websites at the end of 1993, most operated by academic or government entities, but by 1997 there were more than a million, and by 2001 there were nearly 30 million, almost all of which belonged to businesses.1
These businesses all needed advice, help, answers, and suggestions. They wanted to know what the best policies would be for succeeding in a world where their customers were now just a click away from the competition. Our book took off as webmasters working for companies around the world sought out new strategies and best practices for interacting with their customers one at a time, now that they could. The management guru Tom Peters called The One to One Future the “book of the year” in 1993, and in 1994 BusinessWeek called it the “bible of the new marketing.” In 1995 Inc. magazine put us on its cover, and George Gendron, the magazine's chief editor, said “Peters was wrong. This is not the book of the year. It's not even the book of the decade. It's one of the two or three most important business books ever written.”2
So we kept thinking about all this, and we wrote more books, and we began conducting workshops and giving presentations to businesses, associations, and conferences around the world. We formed a consulting company, Peppers & Rogers Group, all the better to help companies come to grips with the powers and limitations of this new type of marketing. Over the years we have consulted for, spoken with, and advised literally hundreds of companies in more than 60 countries around the world, from Algeria, Argentina, and Bulgaria, to Turkey, the United Kingdom, and Vietnam. We know what works and what doesn't, and we also know what works in some cultures but not so much in others. Moreover, when someone—anyone—comes up with a promising new idea in this discipline, we rapidly hear about it. And then we speak about this new idea, and we write about it.
We created the IDIC framework (identify-differentiate-interact-customize) in the mid-1990s as a part of our consulting methodology. We tested it and refined it during our consulting work for many different companies before it first appeared in print in our 1999 book The One to One Fieldbook: The Complete Toolkit for Implementing a 1to1 Marketing Program, which we wrote with the leader of Peppers & Rogers Group's consulting practice, Bob Dorf. The Fieldbook included checklists, questionnaires, exercises, and self-help tools to guide businesses looking to gain more of the advantages offered by the internet, mobile phones, customer databases, and mass-customization technologies. By 2004 this IDIC framework had clearly shown its merits, so we used it as an organizing principle for the first edition of this textbook, and it remains a highly useful organizing principle today.
As we write these words, companies all over the world are hard at work on their digital transformations, customer initiatives, and customer experience programs in an effort that was largely underway, but has been greatly accelerated by the COVID-19 crisis, and is likely to remain highly active even after the virus is finally gone. McKinsey estimated that e-commerce penetration levels alone increased so dramatically that in just the first three months of the COVID-19 crisis (2Q, 2020), the United States fully realized ten years' worth of e-commerce growth,3 virtually at all once. Online penetration in the U.S. consumer economy has increased by 35%, on average, from the onset of COVID-19 through July 2021,4 and figures from around the world show similar jumps. Whether you are contemplating a career in marketing, or your own company is hustling to get its digital act together, or you're simply trying to survive in a digital world where every quarter seems to produce a newly disruptive technology, we hope that the lessons