The focus on Best Customers (identified by CLV) can also reduce advertising and customer acquisition costs. This is done by combining martech with adtech – ‘madtech’ as it has been termed.
The big idea is about using information about Best Customers (their demographics and behaviours) to prospect for more like them. Instead of scattering marketing budgets to acquire all kinds of customers, the smart marketers will use information from VRM to optimise their ad spends to acquire mirror images (‘lookalikes’) of their Best Customers. Given that ad budgets tend to be a large component of the overall costs of an enterprise, optimising media spends on customer acquisition can help increase profits.
The adtech-martech integration can yield two additional benefits:
- Attributes of acquired customers can be passed on to the CDP/CRM at the time of acquisition – thus resulting in a better starting point and possible early identification of those who could be future Best Customers. Based on this, a better onboarding experience can be created for such customers – capitalism marketing at work once again!
- It is very important for brands to have a continuous outreach and hotline with their Best Customers. In most cases, this will be through the brand’s own channels – email, app notifications, browser notifications, and so on. But at times, it may be necessary to do an outreach via paid channels through ‘madtech’ on Google, Facebook, etc. The incremental cost can be justified because of the higher CLV of Best Customers.
The full power of the integration between adtech and martech manifests itself across the customer journey as seen below to create a very powerful VRM flywheel:
Tomorrow: Velvet Rope Marketing (Part 7)