The Chasm
Marketing budgets of brands have been focused on three categories. With the rise of digital-first customers, the bulk of the spending is for new customer acquisition via the likes of Google, Meta (Facebook) and Amazon who together account for $360 billion of the $450 billion annual digital spend, which is about 60% of the global $750 billion spend on advertising. The second spending category is on sending push messages (primarily email and SMS) to their database with the hope that these push messages get opened and acted on. And then finally, there is the spending on the martech platforms which focus on the engagement, journey orchestration and personalisation on the brand’s properties (website and app). The first is focused on new customers, while the other two categories are focused on existing customers. As I have written previously, half of the spends on new acquisition are being wasted because of reacquisition and wrong acquisition – both an outcome of not building better relationships and gathering the right data from existing customers.
There is a chasm: marketers spend to acquire new customers, and then spend on the properties where the customers transact by either spending money or time. Very little attention has been paid to bridging the chasm other than blasting out lots of messages to every email address or mobile number they have. Yes, there have been improvements in segmentation and personalisation over the years, but the limitation has come from the capabilities of the channels. The only big innovation in email in the past 20 years has been the shift from text to HTML. SMS has largely remained the same. In India, we have gone backward ever since TRAI banned 2-way SMS interactions for brands almost a decade ago. Apps have enabled push notifications but these are being increasingly blocked by consumers. WhatsApp is working to bridge the chasm with its popularity and interactivity but it can be quite expensive for sustained usage and the risk of a centralised intermediary changing the rules is ever present.
For marketers to cross this chasm means converting the 1-way broadcast relationship with their customers into a 2-way conversation. This is what has been missing in the relationship. With brands firing away their messages, customers have become trained to largely switch off leading to open rates in single digits – meaning that 9 of 10 brand messages are ignored. This is therefore the crux of the challenge: how to make brand messages 2-way, engaging, exciting and something that customers look forward to.
Until now, brands had no easy way to bring interactivity to their push messages. AMP in email changes this. With interactivity can now come incentives for actions that marketers wish to drive. Atomic Rewards via a pan-brand loyalty program focused on the customer’s time (rather than money) is the way forward. The same idea of micro-rewards can be extended to other push channels for an omnichannel hotline. In the future, a WhatsApp-like inbox exclusively for brands (what I have termed as Micronbox) can further improve the hotline experience. Taken together, AMP, Atomic Rewards, Omnichannel and Micronbox thus become the pillars for bridging the chasm and building the hotline.
