Progency – 2
There are many elements that need to combine together to construct a progency:
Proprietary Platform: The uniqueness in the progency comes from its complete control of the full stack digital experience platform (DXP) – just like Red Ventures controls the acquisition platform via the ownership of the content sites. The DXP combines communications, engagement and experience into a single unified software structure. The entities which build the DXP have the best understanding of the DXP and are thus best positioned to partner for the progency. Most marketers tend to use limited functionalities of the DXP they buy because of internal limitations – talent churn, understanding issues, skill sets, and being too caught up in day-to-day operations. It will be easier for a SaaS company to add creative talent, then it will be for a creative entity to learn the insides of CPaaS and martech.
Multiple Skills: The progency needs to bring people with diverse skills together under one roof. Content creation, creative Imagineering, data analytics, software development, machine learning, visualisation, and story-telling – all need to combine to deliver on the promise of the progency.
Success-based Pricing: The progency must be driven by outcomes and therefore charge on the performance it delivers. This will make it easier for the marketer to outsource and measure. This replicates how marketers work with digital media companies for customer acquisition: cost per action.
So, what are the first use cases that marketers will be willing to outsource to the progency?
Reactivation: One of the big leakages in marketing spends is when customers churn and then end up getting reacquired via the adtech platforms. My estimate is that a third of adtech budgets are being spent on reacquisition. This is because the overall profitable customer pool is finite and the fact that a customer had been acquired previously makes that same customer a target for reacquisition. The problem is with the churn – what actions can be taken prior to a customer becoming completely inactive? This is where the progency can work well – work on the “Test” customers and reactivate them by using push messaging, rewards, affinity-based content, the full stack DXP, and a touch of paid media if needed. The key point is that the progency takes complete responsibility for the dormant database and delivers activated customers at a lower price point than what reacquisition would cost.
Referrals: A similar approach can be taken to driving referrals. Most brands have missed out on the power of getting their Best customers to recommend others like them. Success with referrals brings down the overall cost of new customer acquisition. Referrals, like reactivation, is a contained activity – and does not interfere with the core retention functions of engagement and cross-sell.
New Acquisition: What has been missing in customer acquisition has been the use of first-party data from the most valuable customers. The Best Customer Genome can be used to construct the Ideal Customer Profile. This martech-to-adtech bridge can help drive better quality acquisition, leading to higher profitability down the line.
To summarise: the coming martech era needs a new type of agency to make the best use of the DXP and complement the marketer’s focus on the daily drive towards more transactions. By working at the edges for reactivation of the “lossy tail” (Test customers) and focusing on referrals and smarter new acquisition, the progency can be a very powerful partner to the marketing department in the quest for exponential forever profitable growth.