Marketer’s New Map
We are now ready to chart out a new roadmap for the marketer for cutting back out-of-control adtech spending by eliminating the 50% waste going into reacquisition and wrong acquisition. The big insight that a marketer needs is that the starting point is not focusing on optimising the adtech spend but to begin with the existing customer base. With only a tenth of marketing budgets being invested on building relationships with existing customers, it is little surprise that marketers are unable to maximise customer lifetime value and control churn. Pivoting to a martech-led strategy is the only way to pull back adtech budgets feeding the growing CAC (customer acquisition costs) monster.
The map has three stations en route its destination to exponential forever profitable growth: pipe, partitioning, and prospecting. Pipe is about solving the attention recession problem with existing customers. Only with an alert and active customer base can marketers persuade them with their messages. Partitioning is about segmenting the customer base into three: Best, Rest and Test customers. Best customers need a separate SBU focused on providing differentiated experiences since they are the ones who will deliver the profits. Test customers are the in actives, and need to be outsourced to a Progency for reactivation. The in-between segment of Rest customers is where business-as-usual marketing needs to be done to nudge them in their purchase journey towards the next best action. Prospecting is about the Next customers. This is where two ideas not being currently leveraged come into: an improved referrals program which persuades Best customers to open up their network of family and friends, and an adtech-martech bridge that targets the right set of customers based on the genome of Best customers.
This is a new map for marketers. Very little of this is being done today. In most brands, the pipe is non-existent because a very large percentage of brand messages are being ignored. Lack of attention results in a break in the brand-customer relationship because there is no other way to bring existing customers back to the properties (web and app) other than huge investments in branding. Partitioning is being done on trivial attributes rather than customer lifetime value. Without CLV, marketers are unable to correctly identify who the brand’s Best customers are. The experience thus becomes commoditised for all, and the high and loyal spenders tend to drift away because they are also the ones constantly being targeted by competition with attractive offers to switch. Also, the dormant customers are not being reactivated and instead end up being retargeted for new acquisition at many times the cost via the adtech platforms. Prospecting is being done in a vacuum, in many cases by an independent team that doesn’t talk to the martech team to understand the attributes of Best customers. Also, referral programs are non-existent in most brands.
Adtech and martech are both broken. Only by changing the starting point to martech can brands embark on a new journey. As Einstein said, “Insanity is doing the same thing over and over and expecting different results.” It is time for marketers to end the adtech spending insanity by embracing three innovations that we have discussed: Atomic Rewards (in the form of Web3 crypto tokens), Martech 2.0 stack, and Progency.
