Publishing History All Consumers Are Not Created Equal Worldwide English language edition published in 1995 by John Wiley & Sons New York, London, Brisbane, Toronto, Singapore Todos los consumidores no son iguales Spanish language edition published in 1997 by Ediciones Deusto, S.A. Bilbao All Consumers Are Not Created Equal Chinese and Simplified Chinese language editions published in 1998 by Rock Publications Co., Ltd. Taipei I consumatori non sono tutti uguali Italian language edition published in 1999 by Editori di Comunicazione S.r.l. Milan

If you are a marketer of consumer brands, particularly a CEO, you had better read this book. It will open your eyes to a new marketing concept that may well turn out to be of major importance to you.

It is called Differential Marketing. It means building the loyalty and profits of your most valuable customers by communicating with them more directly. The key to it is the database — a computerized list of names and addresses and important marketing information about your most valuable customers.

Garth Hallberg, who wrote this book, came up with some remarkable information:

• Most of the profits of many brands — even big brands — derive from less than 10% of all households.

• The most valuable consumers rarely have a dominant brand — as few as 20 percent of them buy the same brand more than half the time.

•As much as 80 percent of brand volume is bought by consumers who don't count or don't care.

• Communicating directly with your best customers can increase their purchases as much as 40 percent.

• Procter & Gamble and Kraft Foods have already built databases or more than 40 million households. And there are other marketers close behind them.

• Consumers who are on the database do not resent the mailings they receive. On the contrary, they like them.

Garth's book is laden with information of this kind, but its most valuable information has to do with the economics of Differential Marketing. He reveals almost all he knows with prodigal generosity. What he tells you about the economics of Differential Marketing strikes me as conclusive.

Direct response has always been my first love and secret weapon. For many years I have wondered when ways will be found to use it for building brands. Now, at last, the great day has come.

All Consumers Are Not Created Equal
Excerpts from Chapter 1

Often, less than 10 or 15 percent of households – the "high-profit buyers" in the category – produce the overwhelming majority of current and potential brand volume and profits. As many as 85 or 90 percent of consumers are either immune to the blandishments of the marketer, or, if they do succumb, do not buy enough to make a significant impact on the bottom line.
Read More....

Why I Wrote This Book
by Garth Hallberg

"I know half my advertising is wasted. The problem is I don't 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. There's no excuse for not knowing which half is wasted 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 unproductive half of advertising — and all other forms of marketing communications — 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 brand's 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 don't 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 branding 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 it's 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. Innovative marketers are starting to use the power of consumer databases to find those high-profit customers. They're integrating direct marketing into the communications mix and planning and buying traditional media in a non-traditional fashion. They're discovering that the Internet is not only an efficient means of two-way communication but also an ideal opportunity to involve consumers with their brands. They're realizing that to build their sales and profit they can stop counting the eyeballs they reach and reach out to the hearts and minds of consumers who really count. And they're emboldened as the evidence mounts that these unconventional approaches do 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 TV. 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 and building the emotional loyalty of those consumers who can truly drive sales and grow the brand and avoiding those who can't.

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 the concept of Differential Marketing won't be around to bemoan our ignorance in marketing's Digital Age.