Until the Industrial Revolution, merchants and craftsmen practiced one to one (1to1) marketing -- by treating different customers differently, based upon their needs. But Industrial Age technology shifted the economy's focus - from individual customers to the mass market. Businesses no longer cultivated customer relationships, but began to deliver the same product the same way to everyone.

Today, technology once again is changing the underlying premise of competition and business strategy. Successful Interactive Age businesses no longer rely on great products. They must have great customer relationships. Today's 1to1 enterprise develops a customer, then finds products for that customer.

One-to-one marketing works because the microchip now makes it possible to integrate three important business functions: market information, communication with customers, and production. The 1to1 marketing dynamic works as follows:

• Information: I know you. You're my customer, and with my database I can see how you differ from my other customers. I remember everything about our relationship.
• Communication: Using new interactive communications vehicles, you tell me what you want and how I'm doing.
• Production: Using mass-customization technology, I can offer you something according to your individual specifications. Afterwards, I ask for more feedback: "How was that? What can I do to improve my product or service?"
• These expanded capabilities help companies develop Learning Relationships with their customers. From the customer's point of view, a Learning Relationship works like this:
  • I tell you what I want.
  • You tailor your product, service or relevant information so I can now get from you something I cannot get from any other firm for any price.
  • I have now invested time and effort in a relationship with you. To get an equivalent product somewhere else, I must first reinvent the relationship.

The rapidly increasing power of computers is reducing business competition in nearly every industry to the level of the single customer. Computers make it possible to create an individual "customer feedback loop," that integrates various business processes. This feedback loop makes virtually every traditional mass-marketing principle obsolete.

An increasing number of enterprises are using interactive technologies like email and the Web to establish Learning Relationships. Still, building customer relationships remains an old-fashioned idea.

Toyama no Kusuri is a way of doing business in Japan, used primarily by medical supply companies. A customer receives a medicine cabinet filled with medications for a variety of illnesses. Salespeople visit periodically, open the cabinet and charge the customer for whatever supplies have been used since the last visit.

The salesperson documents the medicines each household consumes and enters this information into the Daifuku cho, the Toyama no Kusuri customer database. Based on the medicines a household uses, the salesperson may recommend other kinds of cures and medicines used by other households with similar

Toyama no Kusuri is unique because it began as a way of business in 1750. In fact, businesses today practice this strategy with the descendants of many of the same families it originally acquired as customers nearly 250 years ago. Toyama no Kusuri proves the tremendous competitive power of 1to1 marketing.

As the new millennium dawns, information technology is reconnecting businesses with individual customers, and proving the old adage that "the more things change, the more they stay the same."