Other Use Cases
Besides reactivation, there are at least three other use cases which are equally compelling.
Retention for Branding: B2C and D2C spend a lot of money on branding – but all of it is targeted at acquiring new customers. There is almost no activity post acquisition to imprint the brand in the minds of existing customers. This strikes me as odd because unless it is a prepaid multi-year subscription business, I as a customer am being continuously targeted with brand messages from competitors and thus could easily be lured away. Acquisition does not mean lifetime loyalty, and retention does not mean maximisation of revenues. Brands have to work even after acquisition to build deep, meaningful relationships with their customers, and very few brands actually do it. This is where the progency comes in. It can open up a new channel of engagement with customers with a focus not on transactions, but on improving the mental availability of the brand. The “performance” can be measured via a “Hooked score” – the number of actions that a customer does over a 30-day period.
Referrals: Another area is to leverage happy customers to acquire new ones through their friends and family network. This can again be a parallel progency program since very few brands focus on referrals. The general perception is that it is easy to game the referral codes and thus brands tend to stay away. But there are ways to do referrals right. It is a measurable parameter, and thus can be outsourced to a progency.
Targeted New Acquisition: A progency can also help improve the quality of new acquisition. By analysing the existing customer data, it can help provide inputs on which new customer to acquire. This marriage between martech and adtech is a rarity today, but is critical if brands want to optimise acquisition spends. A progency can be incentivised based on the lifetime spend of the customer – almost like how a multi-level marketing program works. This aligns the progency’s incentives to not just drive one-off transactions, but ensure maximisation of the customer’s spending potential with the brand.
What I have not suggested as a progency activity is what I think should be the core function of a marketing department: customer retention and engagement. For this, the marketing department should focus on the top 20% Best customers and 30% Rest customers. There should be two different teams for each of these segments. Everything else can be outsourced to a progency. The good thing is that the work of a progency can run in parallel and does not impact the core marketing functions. It in fact augments the capacity by freeing up internal resources to do what they do best: imagining and crafting great experiences for the loyal customer base.