Marketing needs Fixing
Digital customers mean digital marketing. And digital marketing has been reduced to handing over money to Google and Facebook for acquiring new customers. And then re-acquiring them when they are lost. This creates a doom loop of spending which has meant that 90% of digital marketing budgets (which can be half of funds raised by startups and growing companies) is channelised to the tech giants. Marketers are getting locked into an arms race of spending for acquiring less valuable new customers and a growing pool of inactive customers, even as revenues and profits for the tech duopoly reach record highs. Even D2C marketers face a challenge – marketplaces like Amazon vacuum away budgets in hypercompetitive search placements.
Marketing – the art of getting attention – is broken. It has now become the act of getting new acquisitions. It is easy to spend money on Google and Facebook with their wonderful dashboards and magical targeting abilities, even as it is hard to get customers to pay attention to brand messages in overflowing inboxes. This pandemic of “attention recession” leads customers to ignore brand messages, and cuts the lifeline that marketers have to pull them back to the website or app for transactions. For want of attention, transactions are lost – and expensive acquisition takes its place where the attention is there – on and via Google and Facebook, and marketplaces.
Marketing needs to return to its roots. Customers have needs, time and money. Once upon a time, marketers captured attention through a combination of copy, imagery and creativity to grab attention, surface the need, and channel the money. As customers become digital, data and cohorts become the focus. So, while budgets have shifted from traditional to digital, marketers missed a step. Digital customers not only leave pheromones for tracking but also have an identity with inboxes. For the first time, real-time messaging was possible to a segment of one or few, a subset of the traditional “all”. The identity-inbox combo should have been utilised to ensure the cost of engagement becomes a fraction of that of acquisition.
Research has shown that a firm has a 60% to 70% chance of successfully repeat selling to an “active” customer, a 20% to 40% chance of successfully repeat selling to a lost customer, and only a 5% to 10% chance of successfully closing the sale on a brand new customer. In other words, a transaction via retention can be 3 times more cost effective than re-acquisition and 6-10 times more cost effective than a new acquisition. And retention means getting attention. By breaking (or not building) the hotline with existing customers, marketers are only left with one choice: push more and more money to Google and Facebook.
So: what can marketers do to get the attention of their existing customers? This is where Attention Messaging comes in.