Rajesh Jain

Building Blocks

A series of technologies and actions can bring the micron-verse to life in the coming years.

The first building block is a micron publishing platform. Most email campaign management platforms tend to be quite complicated because emails themselves have become complex to create over time. Microns are simple: short and with a single element (text or image or an interactive component). The publishing platform also enables “story microns” – a sequenced set of microns where every subscription starts with the first in the series. This contrasts to the “daily fresh” microns where all subscribers get the same micron on any given day. Every micron should have an ‘AMPlet’ – an AMP-enabled element which converts static content into dynamic interaction. This also brings in that extra surprise and excitement in every micron – making it more likely that every micron gets opened.

The second complementary block is subscription management. This will typically happen via the brand – an email address is what is needed to activate the subscription. Every micron also has a clearly visible “Unsubscribe” option putting the control with the recipient. Email addresses can also be added automatically by brands via an API – thus logged in users don’t have to re-enter email addresses.

The pubsub (publish-subscribe) blocks are what get the micron system going for both brands and their subscribers. The next set of blocks improve on both publishing and consumption.

The third block is a toolkit to improve micron making. Microns can be automatically created from existing content which can be serialised. Microns can also be made by humans – connected to brand managers via a marketplace. What’s needed is a content factory that keeps the microns coming. An added touch can be a no-code AMP publishing system that simplifies the creation of standard AMP elements like quizzes, surveys and feedback.

The fourth block is a rewards system. As we saw earlier, just 1 in 7 brand emails are opened. Our objective with microns is to eliminate waste (unopened emails). Gamifying the process wherein every micron is opened and each action earns points which can then be encashed for rewards is a way to incentivise the right customer behaviour (from a brand’s perspective). Additional points can be given for ‘streaks’ – consistently opening brand mails daily without a break.

The fifth block is the micronbox, a custom inbox for viewing and engaging with microns. Brands should be able to directly publish to this micronbox – as long as they have permission to do so. Customers can get a significantly upgraded viewing experience than the conventional email inbox with its linear list of incoming emails. The micronbox has the potential to transform brand-customer engagement the way WhatsApp upgraded person-to-person mobile communications from the SMS inbox.

The sixth and final block is the profile sharing system. Every individual can maintain a catalogue of personal information which they can selectively share with brands based on trust and rewards. The more the profile sharing, the better will be the incoming microns. At a basic level, it could just be age, gender and location. At the next level, it could be static preferences. At an even higher level, it could be my current requirements – where the brand gets to know that there is a near-term product or service need they can fulfil.

These six building blocks offer a significant and mutually beneficial upgrade to the brand-customer relationship and bring the full power of the micron-verse to life. They also offer new opportunities for entrepreneurs to construct the different components. There are many more ideas from our current world that we can re-imagine in this new micron-powered future: paid microns (where content creators become the ‘brands’ and offer microcontent for a fee rather than free), affiliates (who can provide a smoother middle layer for connecting buyers and sellers), game developers (who can fill those gaps with puzzles and creative interludes) and product-led agencies (who can offer micron publishing for free in return for a success fee for specific outcomes like reactivation of a dormant subscriber base).

The 15% Inbox

85%. That is the percentage of emails sent by brands to their customers that are ignored. This means 6 out of 7 emails are not opened. That email is still such a powerful and critical communications channel despite this waste is because of the low cost of sending emails. The return on investment (RoI) is the best as compared to all other channels.

The question I have been thinking about is: what would it take to bring the 85% down to 0? How can every brand email be opened by customers? It would mean not just increasing the numerator (the number of emails opened) but also reducing the denominator (the number of emails sent). What would a new world of 100% opens and therefore 0% waste look like? Is it worth striving to create such a world?

Email inboxes are a free-for-all. Anyone with your email ID can send you a message. At times, it becomes difficult to distinguish fake messages from real ones leading to loss of trust – and in some cases, money. Email lists get sold as is evident in the rise of incoming spam. Gmail and other email service providers have worked hard to create algorithms to maintain a clean inbox but many irrelevant and spurious emails still get through and some good emails get re-routed to other folders.

If we look at our email inboxes, we will all agree that much can be done to improve the inflow. Gmail has now created multiple folders to automatically redirect emails based on its assessment of the importance and our previous actions. This makes it harder for brand communications to make it to the primary inbox folder – which is a lose-lose scenario for both brands and customers. Customers may miss out on relevant information and brands miss out on their communication and potentially future transactions.

Consumer attention has also moved away from the cluttered inbox to other channels – Twitter, Instagram, Pinterest, WhatsApp and other social channels. Brands are also moving to these platforms and devoting some of their serious attention there. Many businesses are making WhatsApp their primary mode of communication; there are many instances of businesses run solely on Instagram. Innovation on email has also slowed – its simplicity and openness which helped widespread adoption has also meant that there isn’t much to be done. A few ideas in recent years (BIMI and AMP) have come up but not yet been adopted widely.

The other big change in recent times has been the shift to mobile and the reduction in our attention span. Most emails tend to be viewed on the small screen yet brand marketers tend to design them for the desktop. Customers too have adapted by reducing the time they take to decide whether to open or ignore – 2-3 seconds is all that we take to make that call.

It is against this backdrop that I have been thinking about the idea of microns – micro newsletters (or nudges / nuggets). Making emails short, informational, subscription-led, story-format, sent once daily to create a habit, and identified are some of the starting ideas which can create a better inbox experience and higher open rates. But microns will still compete with all the other emails that are being sent. Is it possible to move from the current state to a new future state which makes for happy brands and customers? In other words, what will it take to bring this new micron-verse to life? That is the roadmap I will lay out next.

Summary

Think of your favourite businesses. These are brands you love and buy a lot of products from. Businesses where you are very likely among their top 20% customers. Think about whether you get a differentiated experience. Think of they have asked you for referrals to your family and friends so they get more customers like you. Think if the business will know if you switch to competition – will they call you?

We are all Best Customer of many businesses – either in terms of what we spend each year or the longevity of our relationship with the business. And yet, few created those customised experiences that show they know us and value us – as their Best Customers. For most businesses, we are just like every other customer.

Would we not spend more with businesses that provided us ease and exclusivity in our experiences? Would we not recommend such businesses to others? Why then do our favourite businesses not recognise us and make us feel special? In a world where we leave such a big data trail, why do they not personalise experiences for us, their Best Customers? Why are they okay if we churn to an alternative? Why do they not practice Velvet Rope Marketing?

For businesses, VRM is about creating differentiated experiences for the top 20% (Best Customers). It does not mean ignoring the long tail of 80% (Rest Customers). It just means that there is a disproportionate focus on ensuring the Best Customers are identified, retained, pampered and persuaded to maximise their spend. In fact, Best Customers can even be encouraged to drive referrals to get others like them.

Marketing technology (martech) can today automate many of these activities. Integrating martech with advertising technology (adtech) can also reduce the cost of new customer acquisition (Next Customers) – instead of acquiring everyone, the focus can shift to acquiring Next Customers with attributes like the Best Customers. This can create a “profits flywheel” with even greater growth in future profits.

Implementing VRM right is the secret to creating an invincible business. By building a double moat of getting the industry’s Best Customers and then maximising revenues from them, it becomes possible to create a profits monopoly (profipoly) which can cut off the oxygen that competition needs to grow.

The idea of VRM is not new. What’s different is how technology can now automate many routine customer engagement tasks to create magical customer experiences that treat Best Customers like royalty to drive greater loyalty and spending. VRM applies whether you run a B2C or B2B business. Even if your business has characteristics where every customer pays the same (a subscription business), you can use surrogates like engagement to identify who your Best Customers are and then give them a better experience that fosters upgrades, longer lifetime spending and more word-of-mouth marketing.

Think of VRM as Very Real Magic – accelerate the turning of the data and profits flywheel to create an invincible business and an enduring great company.

Profits Flywheel

Shalini’s experiences with the sports brand can be replicated by every brand in every industry. And yet, very few do it – as we ourselves have experienced. Our experiences with brands and businesses with whom we spend the maximum are for the most part ordinary and not extraordinary. It is little surprise then that we tend to switch – and the brands don’t even notice. When has any brand called us saying, “We miss you. Why haven’t you shopped with us?” Mind you, its not an automated email – that can go to everyone else. Why would brands not call up their Best Customers who may be on the precipice of churn?

Even as Best Customers contribute 60-80% of revenue, their profitability is likely to be 200% since many of the Rest Customers (the long tail) will likely be negative in their contribution if acquisition and servicing costs are factored in. That is why businesses need to create two SBUs (strategic business units) – one for Best Customers, and one for everyone else. Only then will the focus be sharp on retention and experience differentiation for the Best Customers.

VRM should be the lifeblood of the Best Customer SBU. It is just like airlines who have a separate ground and inflight staff – the best and most experienced – to service Business Class customers. There is no request which is too small to service – as I found out on a Delta flight a year ago. I was flying Business Class from Atlanta to La Guardia. Given my dietary restrictions, I could not eat the in-flight meal. (I had changed my flight at the last minute to an earlier one since my previous flight had landed early and hence they could not process my special meal request.) I asked the hostess if they had a banana and if I could get a hot chocolate. Both were non-standard requests. When I did not get anything immediately, I thought my request had been forgotten. About 20 minutes later, I was served both. The hostess apologised that it took time, but she had got it from the economy class crew. A seemingly small request from a Best Customer (she may have known I had been flying Delta for more than 20 years) to create an experience that the customer (me) will remember. That is how extreme loyalty gets built – one great experience after another.

It is the tragedy of modern marketing that one only gets these experiences 35,000 feet above Earth! This is the opportunity for brands. Most industries are not focused on Velvet Rope Marketing – preferring the “all customers are equal” mindset to “some customers are more equal”. In the omnichannel world that is upon us with its deluge of customer data, VRM can be the key to building loyal customers who are they key to future profits. VRM is the big idea that needs to be a must-do for CEOs because it can provide lasting differentiation in a world getting increasingly commoditised. Marketing’s power law can be the CEO’s profit lever – a 10% increase in revenue from the top 20% customers can increase total revenues by 5% and profits by 33%. Done right, VRM can actually do much more – not just drive higher spends from Best Customers, but also help identify tomorrow’s Best Customers early, ensure the right New Customers are acquired, and get better referrals from Best Customers. Taken together, the compounding effect of all this can be a profit doubler.

A Tale of Two Experiences

Rahul is a first-time visitor to a sports goods website. He has no previous history with the company. He enters his mobile number / email ID and gets the base version of the site. The only recommendations are based on popular purchases and categories. As Rahul’s browsing increases, so does the personalisation.

Shalini is a Best Customer of the same brand. She is auto-logged in when she visits the website. The home page shows a curation of products just for her. Her previous purchases are also shown and complementary products are listed for each purchase. A chat window opens up with a service agent who is familiar with her transaction history. The agent guides her to the next possible purchase ideas. Shalini can also interact with other Best Customers like her as part of the ‘Community’ option. She wants to buy new sports shoes but is not sure of the fit. The agent tells her that she can try them out for free and return in 15 days for an exchange in case the fit is not perfect. She is also entitled to expedited shipping and will get the shoes the next day. Shalini will only be billed after she is completely satisfied – a feature available only for Best Customers.

A few months later, Shalini goes to one of the outlets of the same sports brand. She enters her mobile number on a keypad at the entrance. She is immediately recognised as a Best Customer, and a customer service assistant comes to provide her to guider her through her shopping experience. The assistant has full access to her online purchase history and knows her preferences, and is able to ensure speedy service. When Shalini is ready to checkout, she is guided to the front of the queue for priority billing. Shalini is also told of a new fitness community that the brand has set up for their Best Customers, and she now has exclusive access to it. She can connect with others like her.

A week later, Shalini gets an email saying that one of her friends, Neha, has become a customer. When Neha made her first purchase, she mentioned Shalini’s name as her referrer. Shalini earned 100 points and will now get a small commission on Neha’s purchases. Shalini did not have to send any link or code to Neha – all Neha did was mention Shalini’s name when she did her first transaction.

A couple months later, Shalini gets an email saying that a new product is being launched, and she can get it before it becomes available to the mass market. All she has to do is to click and pay. Her size is already known so the entire transaction is frictionless and done in seconds.

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With such a wonderful experience, it will be no surprise if Shalini maximises her spend in the sports goods category with the brand. There is very little reason for her to consider alternatives. For the brand, her ‘extreme loyalty’ also yields rich dividends. Customers like Shalini make up just 20% of the entire base but account for 63% of revenue. A small increase from such customers is the key to doubling profitability. Shalini’s experiences, shared with her friends on Instagram and in 1:1 conversations, also gets the brand more customers like Shalini – who become future Best Customers, thus creating a profits flywheel which maximises the industry’s highest spending customers with the brand. This drives even higher profits and more importantly it also reduces the profit pool available for competitors. Customers like Shalini thus create a moat that lays the foundation for the brand to build an invincible business.