Of Hotlines and Properties

Published November 9, 2022

1

Websites and Apps

With the rise of digital over the past 25 years, brand properties have come to the fore. The Internet’s proliferation starting in the mid-1990s brought about the “.com” websites. The smartphone’s popularity in the 2010s made the app (and a mobile-friendly website) a must-have for brands. The properties were where media brands monetised attention and commerce brands ensured transactions. Even with the rise of social media platforms, the properties remained the core of the digital presence.

The importance of the properties was also because the push channels (email, SMS, push notifications) were all largely one-way broadcast. The purpose of communications sent on these channels was to bring consumers to the properties. Not much could be done within those messages except a clickthrough to a landing page. These channels saw very little innovation through the years: email went from text to HTML, SMS stayed within its 160-character limit (with RCS as an innovation being still-born), and push notifications saw a bit of rich media. The result: attention recession in consumers, and data poverty for marketers.

For marketing managers, the focus was clear. Collect digital handles (email address, mobile number, device ID), send messages to get consumers to the brand properties, and focus all energies on conversion on the websites and apps. This is where martech came in. From collecting data about every click and action to orchestrating journeys to offering personalised recommendations, martech platforms were about the next best action – how to nudge the consumer along to completing the transaction.

The challenge was that the incoming traffic was quite small compared to potential. The push messages sent were largely ignored by consumers with flooded inboxes. This rendered brand-customer relationships inactive over time. Either more money had to be spent on top of the funnel awareness or offers and incentives had to be rolled out to accelerate bottom of the funnel transactions – both costly propositions. Most marketers ended up choosing a third way – pouring money into new customer acquisition via Big Adtech platforms (Google and Meta). This delivered a predictable inflow which kept the numbers moving – although at a high cost. When easy money was available and growth was the only objective, the spending did not matter even as CAC (customer acquisition cost) rose rapidly in the face of competition from other brands. But with the focus now shifting to profitability and marketing budgets called into question, CMOs face a quandary on how to keep the growth machine humming.

Brands need to be able to bridge the gap between the AdWaste faced with adtech spending because of wrong acquisition and reacquisition, and the demand for more traffic and transactions on brand properties. While better martech platforms are working to address the latter, there remains a chasm: how to make the push channels more effective to ensure an increasing percentage of existing customers become returning customers and bring their friends. In other words, what can brands do to make retention, repetition (loyalty) and referrals (zero CAC) work more effectively?

Luckily, help is at hand. Some of the push channels are changing. The one-way broadcast can drive two-way engagement, thus moving the conversion funnel closer to the customer. This is the new world of hotlines, powered by Email 2.0 (and some additional help from WhatsApp).

2

Email 2.0

Email, long seen as dead or dying, is being reborn – thanks to a new technology called AMP. First introduced by Google a few years ago and supported later by Yahoo, AMP enables the creation of interactive emails. This is a huge leap forward in what was hitherto a bland communication channel. Emails can now come alive with AMP. From forms to calculators, from search to chatbots, from carousels to accordions, emails can now take on a new life of their own. Brands can eliminate the need for clickthroughs and landing pages. Actions and conversions can now take place within the email itself. Removing the friction of changing context from the inbox to a brand property has the potential to increase engagement by 3-10 times. This is a massive boost for marketers seeking to build better relationships with existing customers. Emails can now be used to collect zero-party data, get ratings and feedback, deliver customised quotations, speed up cart additions (and even payments). This is email on steroids, or Email 2.0, as I have termed it.

As I wrote in a previous essay [AMP Essay LINK]: “AMP in Email accelerates the conversion funnel. In fact, it does better: it brings the conversion funnel into email. Currently, for brands to convert customers, they need to bring them to their website or app. That is where all the interactions happen. The interactivity of AMP ensures that brands can work towards closure right inside the email by coding mini-apps. These actions do not need a clickthrough to a landing page. An item can be added to cart with a single click. An interactive calculator can show results right inside the email. In fact, with search and payments integration, a transaction could even be completed without the need to go to the brand’s properties.”

This is only the beginning. While AMP can drive more actions within emails, another idea – Atomic Rewards – has the potential to dramatically increase opens. Atomic Rewards (in the form of Mu) offer pan-brand Web2 points and Web3 tokens which marketers can use to offer micro-incentives to drive desired actions. By combining gamification and asset appreciation, Atomic Rewards can increase email opens and actions by an additional 3-10 times. Thus, AMP and Atomic Rewards can deliver a magnitude or two (10-100X) increase in email engagement and transform 1-way email into 2-way hotlines.

Email 2.0 is the future of email. It has been the missing link in customer engagement. While brands have focused on their properties, they have lacked a hotline to their existing customers. Email 2.0 solves the problem. Even for app-first or app-only brands, an Email 2.0 hotline becomes a must-have – opening an alternate line of communication should the app be uninstalled or the push notifications be blocked. In times to come, Email 2.0 powered by AMP and Atomic Rewards will become the crux of the brand-customer relationship and pave the way for exponential forever profitable growth.

3

AdWaste

The mindshift among marketers needs to begin with the recognition that half their digital spends are being wasted. Without this realisation, they will not be able to bring about the changes necessary. Hotlines powered by Email 2.0 to existing customers can drive at least a 25% increase in revenues – without an increase in expenses or marketing budgets. This can lead to a doubling of profits. The table below captures the opportunity for marketers.

To bring about this rise in profitability, marketers need to accept that AdWaste is a disease that has permeated their organization and needs to be eradicated. A deeper exploration of the data will make this evident. All they need to do is answer two questions. First, what percentage of newly acquired customers stay with the brand after 30 days? Second, what percentage of newly acquired customers were customers in the past? Wrong acquisition and reacquisition are the two biggest buckets for wasteful adtech spending and answering these two questions will bring out the hard truths on the quantum.

Hotlines are the antidote to AdWaste. Smart marketers would have known that half their spending is being frittered away, but without the ability to make their push channels work, they had no alternative. This is why Email 2.0 is so important. It gives marketers control over their own budgets, rather than relegating them to becoming collection agents for the likes of Google and Meta. They can rechannelise the AdWaste spend towards their own customers and delight them. In other words, pay customers, not Big Adtech.

Marketers need to shift their thinking from Adtech to Martech. The metric they should be focused on is not ROAS (return on ad spending) but Earned Growth (the increase in revenue year-on-year from existing customers and referrals). Martech 2.0 with its focus on existing customers combined with Email 2.0 (AMP), Loyalty 2.0 (Atomic Rewards) and Velvet Rope Marketing (focusing on the 20% Best customers who deliver 60% revenues and 200% of profits) is the next frontier in marketing.

The new marketing program needs to focus on increasing email engagement (AMP and Atomic Rewards), rethinking rewards redemption (Email Footer Gamelets), thus building long-term stickiness (Web3 token appreciation). This is the brave new world for CMOs – remaking themselves as Chief Profitability Officers in readiness for the tough times ahead. And it all begins by getting off the treadmill of uncontrolled new acquisition and understanding the AdWaste that is happening right under their noses.

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A closing footnote on the other channel which can also power hotlines: WhatsApp. My belief is that it will have a very good run in the near-term but will face a backlash from consumers soon. The WhatsApp inbox for consumers is a sacred space for personal communications. It is why they moved away from SMS. With brand messaging now starting to flood this space, WhatsApp will be forced to keep increasing the cost for brands to engage with their customers in the times to come. Big Adtech (especially Meta) needs new sources of revenue, and WhatsApp is the next frontier. Brands will eventually have to pay up more and more for the engagement, just like they have been doing for new customer acquisition. This is where smart marketers will seek to build on the one channel that remains open, without Big AdTech control, and as cost-effective as ever: Email. Sometimes, old is truly gold!

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.