Resetting ESP and Adtech Industries (Part 9)

Waste Reallocation

In my ProfitXL essay which discussed how brands can supersize profits, I had outlined the SHUVAM framework.

I had written: “Done right, the SHUVAM framework unlocks the key to supersizing profits – and helps marketers reclaim control of their destiny which they have mortgaged to Badtech for many years. It will help them drive not just growth, but profitable growth. Happy customers will make that exponential and forever, thus laying the foundation for early adopters to build a firewall of profits in the category. By ensuring a “profits monopoly”, a profipoly can build longevity for itself. While not permanent (because innovators will always work to chip away), it can give incumbents a significant advantage against startups. In the tech world, Microsoft’s Windows and Office, Google’s Search, Apple’s high-margin iPhones all created profipolies which have helped them invest in new businesses. Modern marketers can do the same in hypercompetitive businesses. And the starting point needs to shift from LossXL to ProfitXL.”

The key to disrupting Adtech lies in reallocating the AdWaste. This $200 billion waste (growing at 25-30% annually) is split three ways.

The first is rewarding existing customers for their attention, data, ratings, reviews and referrals. As I have said in the past, brands should “pay existing customers, not Big Adtech.” Because if they don’t reward their existing customers, they will end up spending 10-100X more on new customers. So far, the challenge brands had was that it was hard to build deep relationships with their existing customers. The All-in-Email suite of innovations solve this problem by converting inert 1-way messages into enthralling 2-way hotlines.

The second is investing in better martech solutions and creating a new business unit for Best customers. Marketers need a unified stack rather than point solutions so they can get a single view of their customer across all channels. They need a better search, personalisation and recommendations solution. They need to audit their customer base, calculate lifetime value right, and decode the Best Customer Genome. They need to create differentiated experiences based on exclusivity, ease and access for their Best customers. Finally, they need to ensure that the new acquisition they actually do learns from data about their Best customers. Marketers need to invest in the right technologies to make all of this happen.

Once these investments in Atomic Rewards and a next-gen martech stack have been done, what’s left flows to the brand P&L. This is the third carveout of AdWaste. This is money brands can invest in R&D and new business acquisitions, thus building a foundation for exponential forever profitable growth and eventually, a profipoly. The All-in-Email intervention (as seen from the brand side) thus becomes the starting point to end AdWaste and supersize profits.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.