The Story
Here is a summary of the key points we have discussed:
- B2C/D2C Businesses are hurting with rising CAC, increasing discounts, attention recession and data poverty
- All these are driving them to keep spending increasingly larger parts of their marketing budgets on adtech (new acquisition)
- Half of the money being spent on adtech is being wasted (“AdWaste”) because of reacquisition (of inactive customers) and wrong acquisition (of customers who churn quickly)
- The focus on adtech has resulted in many profit killers
- These spends and the focus on growth-at-all-costs is hurting profitability
- What businesses need is a framework for profit-centric marketing, with profit creators
- This can only come from existing customers – combining retention, repetition, referrals, reactivation (as opposed to reacquisition) and replenishment (targeted new acquisition)
- This 5R focus needs the 4P framework: pipes, partitioning, properties, and prospecting
- Email 2.0 (AMP, Ems, Atomic Rewards, Hooked Score and Progency) and Loyalty 2.0 (tokens for attention and data) are the building blocks for profit-centric marketing
- Martech platforms help businesses with relationship building with their existing customers
- Existing martech platforms tend to be focused more on features than on outcomes
- They do not factor in the power law of marketing: 20% customers generate 60% of revenue and deliver 200% of profits
- What marketers need to do is to therefore go beyond retention (of all) to extreme retention (of few)
- eXtreme Retention (XR) needs a new SBU for Best customers to empower marketers to manage the upstream of transactions with a loyalty program which combines gamification, asset appreciation and tradability, thus enabling the creation of differentiated experiences
- In short: better experiences for better customers
- XR is the key to growing revenues and profits from Best customers because these customers stay longer (higher CLV), spend more with the brand, and bring in their network (family and friends) who are also more likely to be future Best customers
- XR needs two tokens: a data-time token (Mu) to incentivise micro-actions by customers that are not directly connected to transactions, and an XR Token (XRT) which opens doors to a world of royalty (going beyond loyalty) for the Best customers
- The best moat in a business is extreme retention: when existing customers don’t switch, keep increasing their spends with the business each year, and bring in others like them leading to high “earned growth”
- The XR mindset, implemented via Mu and XRT, enables the creation of the moat, and therefore profits – leading to exponential, forever profitable growth
- This is the transformation needed in marketing – from growth alone to sustainable profitable growth, from adtech to martech, from all customers to Best customers, from retention to extreme retention, and from a transaction-only focus to the upstream
- This transformation will need the third generation of martech platforms: the first generation was about point solutions and the second generation was about full-stack platforms. The third generation will be about platforms which are Web3 powered and enable the tokenisation that marketers need to make XR (and therefore profit-centric marketing) a reality.
