Love and Loss
One of the most important commercial relationships is between a brand and its customers. Brands may not notice their customers, but many customers do notice the presence of brands in their lives. Therefore, there is an element of sadness when that relationship is broken. It is typically the customer who decides to end the relationship and move on. The sad part of this is that rarely does a brand notice, even though the signals were there much before.
A brand goes to great lengths to acquire a new customer. Plenty of ads, great offers, discounts, and very friendly messages. For the customer, it is like being caught in a whirlwind love affair. And then once the relationship is cemented, instead of getting to know the customer better, the brand moves on to the next conquest leaving the now ‘old’ customer feeling neglected. It seems like business as usual – nothing special. All those promises to spend a lifetime together – they all seem so hollow. And that’s where the separation starts. Because some other brand has started wooing the customer with ads, offers, discounts and messages. And so it goes on – the cycle of love and loss.
A few brands do manage to stop the loss and build an ever-increasing pool of customers. They become the leaders in their industry. They are the ones who are said to have erected moats. They have great customer relationships with every customer feeling they are special. Happy customers recommend others, creating a growth flywheel. These are the brands others try to copy, but with limited success.
We have experienced both kinds of brands, and the love-loss that goes with them. I may have exaggerated some of the emotions but that does not take away from the key point: most brands do a lot to start a relationship but not enough to sustain it over long periods of time. This, to me, is the mystery. It is so much easier and profitable to retain a customer than to keep moving on the treadmill of constant new acquisition. In the B2C world, a customer churn is just a statistic. (In the B2B mid-market and enterprise world, someone will at least get questioned and an inquiry will seek to establish what went wrong.)
In the pre-digital and pre-pandemic world where digital relationships constituted a small percentage of the overall base, it didn’t matter because most brands did not even know their customers. But all this has changed and will change even more in the years to come. Every relationship has the potential to become digital even for brands who sell through marketplaces and intermediaries – because every customer now has a digital identity and footprint. It is up to the brand to get to know the customer, or else newer direct-to-customer (D2C) brands will and in doing so, grab market share and customer value from laggard incumbents.
My contention is that by ignoring the power of Attention Messaging, brands are missing a key chapter in their playbook. By spending almost 10X more on the acquisition of new customers than on retention and growth of existing customers, they are simply feeding the profit machines of the tech giants (Google, Facebook, Amazon). By not building deep relationships, they are leaving their customers open to being targeted and acquired by competition, thus leaving their own future vulnerable. Attention Messaging holds the secret for brands to create the twin moats of profits and monopoly – are marketers paying attention?