Strategic Inflection Point
In a world of digital customers and relationships, martech, not adtech, is the secret to customer delight and business success. The second generation of martech solutions will create their own ecology: full stack rather than point solutions to provide a unified customer view, CDP to create a single vast repository from the data hose, AI engines to predict behaviour from the actions of the many, APIs to glue different components, and new avatars of the digital agency which are built on proprietary martech products and deliver results for retention, reactivation and referrals. These new martech platforms, along with the upheavals in the adtech world, are creating a strategic inflection point for businesses.
An inflection point, according to Investopedia, is “an event that results in a significant change in the progress of a company, industry, sector, economy, or geopolitical situation and can be considered a turning point after which a dramatic change, with either positive or negative results, is expected to result. Companies, industries, sectors, and economies are dynamic and constantly evolving. Inflection points are more significant than the small day-to-day progress typically made, and the effects of the change are often well known and widespread.”
Rita McGrath wrote in Fortune: “Strategic inflection points—changes that alter the taken-for-granted assumptions underlying a business model—can feel sudden. In reality, however, they tend to build up slowly, gathering momentum until a transformative shift becomes clear. Andy Grove, who coined the term, said it referred to change that was 10 times more significant than a typical change encountered by a business.” She adds that companies tend to fall in three categories when these shifts occur: “The first are those that have missed the inflection point entirely. These firms often shrink or disappear … The second group comprises those that realize an inflection point is underway and place a huge, last-minute bet on catching the wave … The third set of companies are ones that have placed a number of small bets over time to position themselves to take advantage of shifts when they happen.”
Marketers obsessed with new customers will miss the seismic shift that is taking place. In a post-pandemic world where digital consumption has risen sharply, compressing many years of growth into one, it is easy to go after the next new customer. But if that is not accompanied with an equally strong focus on customer retention, what marketers will end up with is a leaky bucket of constant churn. It is easy to spend money on Google and Facebook and get “Gooked”. What marketers need to think of is “Hooked” – how to create hooked customers who have a net retention rate of greater than 100% and who work as micro-influencers to drive referrals from their family and friends to create the exponential growth that is so central to creating a profits monopoly in the category. A central idea that marketers need to understand is “jobs to be done” – that customers hire products to get something done in their life.