Extreme Retention = Profit-centric Marketing (Part 8)

Enablers

There are six enablers that marketers will need to bring this new world to life: Mu token, brand XRT, third-gen martech platform, Progency, Insights team and Rebudgeting.

Mu Token: This is a pan-brand token offered by a DAO (decentralised autonomous organization). Its purpose is to incentivise customers to share personal data and spend more time. Marketers can use Mu to nudge customers to do the actions they want. The brand controls who to give Mu and how many Mu to give. It is pan-brand because it is not possible for a single brand to make it attractive for customers from an earnings perspective. The DAO manages the marketplace and exchange. There is a graded increase encoded in rules of the total Mu in circulation – thus enabling some appreciation in value over time. Mu can be traded (unlike loyalty points).

Brand XRT (eXtreme Retention Token): This is a non-fungible token (NFT) specific to a brand. It is stored in a mobile wallet and cannot be transferred or traded. It uniquely identifies the specific customer and bestows rights and privileges for fostering differentiated and exclusive experiences.

Third-gen Martech platform: This platform adds support for the Mu token and Brand XRT. It also enables brands to create a separate SBU and differentiated experiences for Best customers. In fact, the CLV algorithm proactively identifies the Best customers. It is AI-first thus freeing the marketer from many daily chores of campaign management. Over time, the platform will also need to help marketers with the virtual assets – for example, land bought in metaverse platforms.

Progency: This is a new type of agency which combines creative, data and software skillsets to work as an extension of the brand marketing department. Part of its compensation is linked to outcomes. It is Web3-native in the sense that it understands the world of crypto, blockchain, NFT and the metaverse, and works to guide the brand into the new era because that is where tomorrow’s customers are to be found.

Insights Team: This is a team that focuses on customer and competitive research. With consumer tastes changing rapidly and with technology evolving continuously, brands need the equivalent of a marketing R&D team – which can imagine the future, run focus groups, conduct experiments and guide the other teams in future directions. This cannot be outsourced because of the pace of change and the speed needed for decisions.

Rebudgeting: Marketers will need to rebalance their budgets and split them squally between the Best customers, other existing customers (Rest and Test), and future customers (Next). This will be a big shift from the 80:16:4 split today – with 80% going for Next customers, and the rest of the spend split equally among all existing customers, thus leaving just 20% of 20% (=4%) for Best customers.

What the marketer will need to do internally is to align different departments to envision newer and better experiences for the Best customers. Adtech (new acquisition) will still continue but with lower focus and reduced budgets. The mix of new tech, external help and internal teams will prepare the CMO and the brand for tomorrow’s world – where retention trumps acquisition, where profitability trumps money-guzzling growth, where experience differentiation is as important as product, choice and convenience. This is the transformation marketing needs for the new world of extreme retention and profit-centric marketing.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.