Mass vs. Micro-Marketing
Posted by Pat Kitano at 3/29/2007 10:50 PM 
Categories: New Business Models, Disintermediation, Title Insurance
Categories: New Business Models, Disintermediation, Title Insurance
Corporate consumer marketing skills used to be identified with companies like Procter & Gamble, the makers of "Tide" and other everyday shelf products. Marketing to the masses via mass media like television is "old school" - effective in some cases, but being replaced or supplemented by micro-marketing to a targeted customer base and by viral marketing techniques. Google Adwords is a good example of how potential customers are being qualified for marketing campaigns based on their Google queries.
The differences between mass marketing and micro-marketing are strikingly different:
| Mass Marketing | Micro-Marketing | |
| Methodology | Big budget TV advertising, machine gun message to a wide audience | Small budget targeted marketing to specific customer segments |
| Product type | Commodity products that compete on the basis of shelf space | Products that are defined more by the taste or culture of the buyer |
| Efficacious for: | Brand marketing of common consumer products - beer, cars, shampoo - and establishing brand name recognition ("I'm lovin' it") | Brand and TRANSACTION based marketing requiring follow through step to sale - real estate sale, books, discretionary products |
| Customer relationship | One way message | Two way interaction |
| Customer identification | Broadcast to target demographic, i.e., the customer base | Customer identifies and defines themselves through interaction and their behavior within the marketing process |
Note that the typical real estate marketing process continues to be stuck in mass marketing mode, even at a local level. The mailings and the billboards on shopping carts cost a lot with very low hit rates. Realtors are beginning to understand that their clients are identifying and defining themselves by their behavior on the internet - for example, they may or may not leave leads at realtor websites for any number or reasons. Blogging exemplifies effective micro-marketing - it's cheap, the blogger can build a two-way communication relationship that can be nurtured into a transaction and the customer responds to blogs more than to a post card.
Title insurance companies have been faulted for lacking consumer marketing skills because they have historically never addressed marketing to their final user - the home buying/selling or borrowing consumer. Title insurance categorically is a mass market product - it's a commodity and thus, vies for shelf space, and it requires a branding message of "good will" - imagine home buyers telling their agents - "why, I just love those Stewart Title ads". Well, pop this dream...
Title insurance companies have always realized they don't need to sell title insurance to the consumer, they sell it to the real estate professionals. This business model won't change much. They now realize they can sell a whole portfolio of products direct to the consumer because they own the housing, mortgage and credit data the consumer wants to interact with. And they will micro-market to this consumer because both sides want to establish two way communication... "show me data and I'll buy your products".
Fidelity' Cyberhomes AVM looks pretty innocuous. According to Marty Frame, Cyberhomes' manager, behind the sleepy database functioning exterior lies an engine that is learning about how consumers use Cyberhomes. By understanding who that consumer is and what they are seeking, Cyberhomes can instantaneously and automatically market relevant loan, insurance and real estate products to that user. For example, some users check their own home price occasionally... Cyberhomes "sees" this, recognizes and analyzes that home owners' credit and LTV profile, and can offer refinance or home insurance products appropriate for their situation.
Fidelity and the title insurance industry don't need to go on a big budget offensive to brand their products until they become a market force working directly with that consumer. Give that development a couple of years and by 2010, you'll hear and see Cyberhomes and their cousins mass marketed as brand names like banks.
Related articles:
How to Compete within an Oligopoly - the title insurance i ndustry is an oligopoly
Cyberhomes and its Future - Cyberhomes is being positioned as a point of sale interface with the consumer
Cyberhomes learns from Real Estate Pioneers - Cyberhomes learns how to build their business model by watching the Real Estate 2.0 pioneers make mistakes
Technorati Tags: cyberhomes, mass marketing, micromarketing, real estate marketing, real estate, fidelity title, web 2.0, product marketing
Ideally, title should be the buyer's choice and lender's choice (since that who's being insured). Do you really think that a buyer wants to educate themselves on the different coverages, rate variances and company policies on top of everything else they must select in a purchase/refinance transaction?
Reply to this
In the Cyberhomes scenario described above, Fidelity wants to be the loan broker for the consumer. In this case, title insurance becomes a moot point, the pricing is built into the loan's closing costs. The buyer need not be educated on title, they accept the package as they would from any other loan broker.
Reply to this
Hi Pat,
Just read your mass-micro blog. This is what I have been advising my clients to do. I do not know why the real estate industry takes such an old approach to selling its products. I have designed an E-card companion to an actual printed post card for a current house for sale, targeted to specific home buyers. Here is the link on Irmgard Kenny's blog http://blog.nospinagent.com/?p=37
Reply to this
Hi All,
Title insurance is buyer's choice per the Real Estate Settlement and Procedures Act, aka RESPA.
I have been postulating in the classroom for many years now that large, national title companies, now known as "information service companies" are quietly building the infrastructure to ultimately be THE source for all things real estate information-related. I'm talking beyond settlement services like title/escrow/appraisal/credit. This stuff has been in place for years.
I simply must write a blog article....have been meaning to do this for months. Pat, maybe I could pen out my thoughts and send them to you for review.
Reply to this
Jillayne, you're one of the most qualified to develop this angle... I'm in complete agreement that there's a lot of new strategies being developed at the title insurance companies... we should talk soon...
Reply to this
Hi Pat,
Just read your mass-micro blog. This is what I have been advising my clients to do. I do not know why the real estate industry takes such an old approach to selling its products. I have designed an E-card companion to an actual printed post card for a current house for sale, targeted to specific home buyers. Here is the link on Irmgard Kenny's blog http://blog.nospinagent.com/?p=37
Reply to this
I couldn't agree more that there's a world of difference between mass- and micro-marketing but it's not just the method that makes them different.
As more and more marketing goes mobile and is distributed through RSS, it will become increasingly important to consider the size (i.e. the number of characters in your text) and the content required to effectively capture people's attention.
I think you need to boil your message down to thre words. I've written a blog post about it here: http://www.e-strategyblog.com/2007/09/micromarketing-.html
Reply to this