Past Writings – 2
Marketing: Disrupted and Simplified: “If we were told to design the ideal business with no resource constraints, what would we do? The goal would be to maximise industry profits, thus leaving no surpluses (“oxygen”) for competition to invest and grow. As we have seen, not all customers are profitable if acquisition and servicing costs are factored in. So, the first task would be to identify the sector’s most profitable customers and acquire them. Once acquired, the next objective would be to ensure to keep them forever and get 100% of their spend in that category. This would necessarily mean providing them with the best possible experiences (“velvet rope marketing”) and perhaps combined with a loyalty program that keeps the goodies coming as they keep spending…The next stage would be to turn customers into advocates – thus dramatically reducing acquisition costs for the Next (Best) customers. Best customers are likely to know other potential Best customers in their friends and family network. Incentivising them to get more like them can create a continuous supply of new customers with similar characteristics in terms of spending and profitability…If all of this can be made into a repeatable process, the flywheel kicks in – and that’s the secret to super-normal growth and profits. It is what the best businesses do…suck out the oxygen of growth from competition and create a “profits monopoly” (profipoly).”
ProfitXL: “ProfitXL is built around five themes: the need for one-way push channels to become two-way conversational pathways thus bridging the chasm between acquisition and conversion, the transition from point solutions on the brand’s properties (website and app) to a unified martech stack, the identification of Best customers and creating differentiated experiences for them, getting close to zero CAC (customer acquisition cost) for new customers, and measuring growth based not on paid marketing spends but on repeat purchases from existing customers and revenues from referrals. This is ProfitXL’s SHUVAM framework: Story, Hotlines, Unistack, Velvet Rope Marketing (VRM), Acquisition (done right), and a new set of Metrics to measure progress. SHUVAM is the path for exponential forever profitable growth. If followed rigorously, it can help a brand create the ultimate endgame and moat in a business – a profits monopoly (“profipoly”). The ProfitXL mindset and SHUVAM strategy will help marketer’s increase revenues, reduce spends and improve shopper experiences. After almost two decades of digging the AdWaste hole, marketers can climb the profits mountain and aspire to reach the profipoly pinnacle.”
More: “Eliminating the “profit killers” in marketing is about instilling good habits in the marketing strategy which can lead not just to profitable growth, but also make it enduring, and eventually help the brand to creating a profipoly…ProfitXL is more than a single point solution or even a stack (multiple interconnected solutions); it is a bigger idea that the marketing industry has forgotten – how to ensure existing customers come back for more and bring their friends. ProfitXL is about creating a disciplined process which can deliver 25% year-on-year growth for long periods of time and at the same time cut marketing spending by 50%, leading to a dramatic improvement in profitability.”
PxL: “The PxL approach advocates the following: For Best customers, remove friction in their engagement and ensure omnichannel personalisation and the ‘perfect’ next action by maximising zero- and first-party data. For Rest customers, build better hotlines via the push channels to reactivate many of them. For 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. 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… 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.”
More: “There are three key challenges facing brands. First, boosting the Best: how to generate more sales from the top 20-30% customers as they account for the majority of transactions. Second, reactivating the Rest: how to rebuild relationships with those customers who have gone dormant as an alternative to retargeting them via Big Adtech platforms. Third, near-zero CAC for the Next: how to acquire the right new customers without breaking the bank and thus reducing AdWaste due to wrong acquisition and reacquisition. Solving these three intertwined problems is the crux to building an exponential forever profitable growth business en route to creating a profits monopoly (profipoly).”
Martech 2.0: “There are three major profit killers in a B2C/D2C business. Firstly, the potential of a brand’s app and website might be underutilised due to insufficient data collection on existing customers. This occurs due to isolated point solutions not sharing data, which obstructs effective personalisation. Furthermore, an ineffective onsite search engine might fail to showcase products that loyal customers are likely to purchase…Secondly, push channels are often used merely as broadcast mediums, lacking interactivity. Generally, the expectation is that customers, attracted by the message, will click through to the website or app. However, as we know, push channel open and clickthrough rates are usually low. These push messages are the most cost-effective way to lure customers back to your platforms. But, if customers become unresponsive, a brand is left with either expensive branding campaigns or retargeting via adtech platforms. Finally, a substantial portion of the acquisition budget is squandered due to AdWaste. Shockingly, almost 50% of the advertising expenditure proves to be ineffective. While optimisation strategies for ad spending might seem like an attractive solution, they only offer a minimal reduction, typically around 5-10%, which is insufficient. Retaining an existing customer holds much more value than acquiring a new one. Studies indicate that customer acquisition costs are five times higher than retention costs, and a mere 5% increase in customer retention can elevate profits by 25-95%… Transitioning to Martech 2.0 will transform profitability and customer experience.”
More: “Martech 2.0 revolves around increasing sales while reducing marketing costs, thereby enhancing profitability. It is about bringing back existing customers for more, and ensuring they get their friends. It is about laying the groundwork for exponential forever profitable growth, and eventually, a profipoly, by building remarkable products that function as profit generators, enabling brands to establish a competitive edge and ultimately, a profit monopoly (or ‘profipoly’).”
