There are 3 transformations happening that will have an impact on how marketers use technology to build relationships with their customers to drive revenue growth and maximise lifetime value: the shift from new customer acquisition at all costs via spending on digital ad platforms to a focus on existing customer retention, the switch from point solutions to full-stack solutions as marketers demand a unified customer view, and a consolidation amongst the thousands of martech companies. I have covered these three broad transitions that are underway in my previous three essays:
- The Coming Martech Era: Driving Exponential Forever Profitable Growth
- Martech’s Magicians: Microns, Micronbox and µniverse
- The Subscriptions Future: Customer Retention Forever
In the coming martech era, there is a fourth shift that will play out. The complexity of martech, the costs of integration, the scale of the data being generated with the tracking of every customer action, the limitations of internal marketing teams – all will necessitate a new kind of entity to deliver the retention, reactivation and referral outcomes that brands need.
Marketers end up thinking of messages, segments, campaigns, journeys, churn prediction, and analytics. What they need to focus on is something much simpler: how to provide unmatched experiences to the Best customers to they maximise spending with the brand, how to transition the Rest customers to becoming tomorrow’s Best customers, how to cut costs while dealing with the Test customers, and how to acquire the right Next customers based on insights from the Best customers.
This mindset shift will need a martech agency – what I call “progency”. This product-led agency will combine content and creative skill sets with number-crunching and software capabilities to build on top of a proprietary full-stack martech platform to deliver the outcomes marketers want with a performance (success-based) model. The progency will help marketing teams outsource the outcomes they want – just like is being done with adtech agencies that generate leads, app installs or new customers and are paid based on results.
The progency will be different because for the first time an agency will build solutions on top of its own product. In the past, agencies have not focused on having their own internal products. Adtech agencies have used products provided by Google and Facebook, and then overlaid their creative and analytical skills to deliver results. The progency will be tech-first, owning a martech platform. Ownership is important because only the developers will fully understand the power of what their platform is capable of. This is what will provide a sustainable competitive advantage to the progency.
Theodore Levitt famously said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” The progency is about providing the holes that marketers want.