I will begin by first focussing on a brand’s relationship with existing customers and then consider how this can help with new customer acquisition. Let’s first take a look at the current state of digital marketing and engagement.
Most brands (I mean B2C businesses) tend to treat all customers the same; there is one huge bucket into which all customers fall. Segmentation is done more on recent behaviour than on future lifetime value. Some brands use loyalty programs to create tiers and different rewards. “Experience” is spoken of a lot but the reality is quite different; differentiation of experience is the exception rather than the norm. Very few brands take the trouble of getting to know us; they don’t even ask us about our preferences. Martech platforms are used to do the obvious: some standard journeys, the obligatory cart abandonment mail in ecommerce, the bland confirmation when a transaction is done.
The reason for this is that retention and growth is not the exciting part of marketing; it is the stepchild. The darling department is new customer acquisition. That is where the bulk of the budget is spent – the shiny new numbers that can be presented in management review meetings and shown to investors. After all, it is a land grab out there. So why not grab as much territory as possible even if those are deserts, mountains or uninhabited waste land? In fact, to show the infinity of the market, knowingly or knowingly, many customers are re-acquired after being allowed to go dormant.
I had a conversation with a friend recently who had just joined a hot new startup. His traditional market sense was shocked when he saw the spends on acquisitions. VC money was being spent on Google and Facebook to prop up the DAUs and MAUs (daily and monthly active users) so that the next funding round could be at higher valuations. There was little attention being paid to retention. So what if 75% of the app users weren’t even active after a month? There were always new users to acquire to keep the hockey stick curve intact.
With 90% of the monies being spent on acquisition via adtech platforms, very little money is left for customer engagement, retention and growth (the domain of martech). Even this money gets invested in a variety of point solutions – “the next new thing” disease is contagious! The result is that integrating these tech solutions becomes a nightmare and data is siloed. The perfect state of a single customer view never happens. The daily campaigns continue, various numbers are tracked, and whichever looks good are presented to top management. If the going gets tough, it’s time for the marketer to move on – another shiny new startup is waiting with a better compensation package and a bigger acquisition budget.
And so the journeys continue – marketer and customer, the hunter and the hunted, moving ceaselessly, from one brand to another.