Theory
An eCommerce business has two categories of existing customers: Best and Rest. The Best customers are engaged and frequent buyers, while the Rest are less engaged or even disengaged. Then, there are the Next customers – those whom the brand acquires, typically via marketing spending on Big Adtech platforms like Google and Meta. Best Customers are important because even though they are a small percentage of the overall base, they account for a large share of the revenue and even greater share of the profits. [I have discussed this framework in my Velvet Rope Marketing series as part of my marketing essays.]
The challenges for an eCommerce brand are the following:
- Best customers: How to increase share of wallet?
- Rest customers: How to get them to engage more with the brand?
- Next customers: How to reduce “AdWaste” by reducing or eliminating wrong acquisition and reacquisition?
eCommerce brands have three ways of interacting with their customers:
- Properties: their website or app, where the transaction gets done
- Push Channels: the ways to bring their customers to their properties
- Plans: the media plans which target new (and some existing) customers
The PxL approach advocates does the following:
- Best customers: remove friction in their engagement and ensure omnichannel personalisation and the ‘perfect’ next action by maximising zero- and first-party data
- Rest customers: build better hotlines via the push channels to reactivate many of them
- Next customers: get as close to zero-CAC acquisition by driving referrals, reactivating instead of reacquiring customers, and using data from Best customers to sharply target acquisition
As it turns out (and we know because we are customers), most eCommerce journeys suffer from broken experiences. PxL is about beautifying every broken profit killing customer experience on properties and push channels to create a profipoly (profits monopoly). The focus of PxL is beyond just retention and engagement; it is about directly improving the economic engine which drives sales growth, cuts wasteful spending, and thus drives greater profitability. What is the point of engaging and retaining customers if they do not transact?!
The most important idea we will discuss in the PxL journey is Email Shops (as part of Inbox Commerce). By moving the conversion funnel from the website and app to the inbox, Best customers can be persuaded to transact more and Rest customers can be reactivated and engaged, and moved along their transaction journey. At every step, the focus must be on frictionless and personalised experiences. Email shops, powered by Email 2.0, combined with other innovations like Atomic Rewards, Full-stack Martech, AI-enriched product catalogs, and Progency can transform eCommerce businesses and help them transform their P&Ls.
