Profit Killers – 1
I have listed out several profit killers that many marketing departments are fostering. (Each profit killer can thus lead to a profit creator.)
- Wrong Acquisition: Many paid clicks to either the website or for app installs are being wasted because the prospect either goes away without doing a transaction or deletes the app in a matter of days. This is money wasted. The question to ask: what percentage of ad spends results in a wrong acquisition?
- Reacquisition: Many existing customers go dormant. These “inactives” could end up getting retargeted via the adtech platforms and thus getting reacquired. How much money is being spent on such reacquisitions?
- Discounts: While discounts do a good job of persuading a person to do the first transaction, how many of these relationships do not move forward? Unless it’s a digital product, the likelihood is that the discount is a loss-leader to drive future purchases. But what if those purchases do not happen? How much money is being wasted on offers which do not lead to a lasting relationship?
- Marketplace Fees: Marketplaces like Amazon are a reality. They have the traffic and they lead to product discovery. But they are also profit suckers because they deny the brand the ability to build a direct relationship with customers. As such, it is important for marketers to build their own direct traffic. Marketplaces also have the habit of creating their own branded products to compete in various categories (case in point: AmazonBasics – everything from USB cables to batteries to mouse to safes to tripods to vacuum cleaners to table lamps to notebooks .., and on and on it goes).
- Missing Hotline: When 10-20% of the push messages (emails, SMSes, push notifications) are opened, it means that 80-90% are ignoring the brand communication. This increases the cost of bringing customers back to the properties (website, app) for repeat transactions. What will it take to solve the attention recession problem and double or treble the engagement rates?
- Email IDs Collection: Almost every digital user has an email address and therefore an inbox. Many app-first companies don’t even ask for an email address at sign-up time. As a result, if there is an uninstall, they have no second channel to go back and engage with the person who had downloaded (and who was probably acquired via a paid marketing program). What is the extent of waste because of this mistake?
- Multi-channel Messaging: Brands send us the same message on multiple channels: email, SMS, PN or WhatsApp. Why? Other than the push notification, every other channel costs money. All it does is irritate the recipient (customer!) who then gets trained to ignore brand communication. Why not focus on the channel that the customer prefers and just send a single message first? Only if that message is unread or ignored should a second channel be used.
- In-mail Engagement: New technologies like AMP for Email (from Google) allow for interactivity within the email. No clickthroughs and no landing pages needed! This can increase engagement. Why are marketers not using this? Every missed engagement opportunity is a profit killer.