The world of marketing is changing. One of the biggest shifts that I see happening is that the extreme focus on adtech (new customer acquisition) will move to martech (customer retention and development). For one, there are only so many new customers to acquire – unless one is starting up. Second, brands are going to realise that there has been limited focus on monetising their current customer base in the mad rush to acquire new customers at any cost. Third, in the post-Covid world companies will find capital hard to come by which means they will need to focus harder on making the most of the customers they already have. That’s where martech will play a very important role going forward. The 80:20 split between adtech and martech will flip in the years to come.
Customer retention and development needs a very different approach. While the temptation is to focus on all customers, CMOs must differentiate. The “best” customers provide disproportionate revenue and profits. Identifying who these best customers are must become a priority. This has become easier with the data trails that customers leave. Analysing transaction data to compute customer lifetime value (CLV) and thus identify the top 20% customers has to be the core of the martech strategy.
The next question is: what to do with the best customers? This is where I want to bring in the idea of “Velvet Rope Marketing” (VRM). One could also term it as red carpet treatment or white glove handling. In all cases, the theme is the same: how to create a differentiated experience for the best customers? VRM combined with omni-channel personalisation is the future of marketing. We will discuss more on this in future posts.