Published November 12-19, 2024
1
Dialogue
At a recent meeting with a senior leader at a large conglomerate, I shared my concerns about AdWaste – the biggest profits killer in digital business. I pointed out how CMOs are failing to address this issue, while CEOs often accept marketing spending as an inevitable cost of growth, without scrutinising the actual numbers. After hearing my thoughts, the leader suggested I meet with the CEO and CMO of their eCommerce business to discuss the problem in detail.
Reflecting on how such a conversation might unfold, I was reminded of a book I read years ago: “Adam Smith Goes to Moscow: A Dialogue on Radical Reform”. It explores the ideological clash between capitalism and communism during the Cold War era. The book “is a captivating dialogue between the head of a hypothetical, formerly socialist East European country and a fervently market-minded American adviser. Their spirited give-and-take highlights the monumental political as well as economic complexities currently faced by the former Soviet bloc countries as they struggle to transform themselves into free market economies.”
What struck me most about the book was its format. The dialogue-driven narrative allowed readers to actively engage with complex ideas, rather than passively absorbing information. By presenting contrasting viewpoints through a back-and-forth discussion, the book made complex economic concepts more accessible and relatable. It’s this approach that I found particularly valuable, and it made me to think about how I could use a similar dialogue format to explore the challenges and solutions in marketing today.
Here is a sample from the book.
Advisor: It is always tempting to regard one’s problems as unique. This is a mistake. After many years of research on a good number of countries desirous of reform, I have come to the following conclusion: The circumstances of these countries were not entirely the same, and each regarded its own situation as special. But certain common elements existed. For example, the principles of physics apply in all nations; by the same token, the basic principles of economics are applicable in all nations. The most essential of these principles is the relationship between economic prosperity and private property rights.
Prime Minister: You seem to be saying that the same boilerplate advice is relevant to all nations, irrespective of their history, culture, traditions, or stage of development—that there are iron laws of economics, which are universal and eternal. I don’t believe that. I am convinced that we must learn from the experience of other nations—that we must, for example, carefully and attentively study the recommendations of the International Monetary Fund (IMF). But I am also convinced that in order to grow an apple tree in a place with a different climate, you must choose the right kind of tree and not try, as some have already done, to grow apples at the North Pole.
Advisor: Let me draw on our experience in Latin America. Forget geography for a moment and put Poland in the place of Argentina, Hungary in the place of Uruguay. You will see states that are weak as organizations; political parties and other associations that are ineffectual in representing and mobilizing the people; economies that are monopolistic, overprotected, and overregulated; agricultures that are poorly designed to feed the people; public bureaucracies that are overgrown; welfare services that are fragmentary and rudimentary. And will you not conclude that such conditions breed governments vulnerable to pressure from large firms, populist movements of doubtful commitment to democratic institutions, armed forces that sit menacingly on the sidelines, church hierarchies torn between authoritarianism and social justice, and nationalist sentiments vulnerable to xenophobia?
The dialogue format inspired this column. I decided to bring together ideas from several of my writings – particularly my recent essay focused on a new direction for marketing – and craft a mock discussion between a CEO, a CMO, and myself. Through this conversation, we explore how marketing must evolve to meet today’s challenges.
2
AdWaste
Arjun (CEO): Hello, Rajesh. I’m Arjun, and this is Maya, our CMO. You’re already familiar with our eCommerce business. Our biggest challenge right now is profitability, even as we continue to grow. I believe you have some ideas on how we can change this. Perhaps we could start with Maya giving you a brief overview of the problem.
Maya (CMO): Hi, Rajesh. I’ve been here for a month, and the core issue we’re facing is Customer Acquisition Cost (CAC). While we’re acquiring a significant number of new customers, we’re not making enough money from them to cover the costs. The pressure to grow is relentless, so our focus has been on spending through adtech channels to drive acquisition. It’s the fastest way to show results, but I know this isn’t sustainable. What’s the pathway to change?
Rajesh: Arjun, Maya – thank you for inviting me. Your problem isn’t unique. Many digital businesses find themselves in the same situation. The key is understanding that the problem runs deeper than just acquisition. Let’s begin by looking at three essential metrics: AdSpend, AdWaste, and Earned Growth. First, Maya, what is your AdSpend as a percentage of Gross Margin (GM)?
Maya: We track AdSpend as a percentage of revenue. For a Rs 1,000 crore topline, we’re spending about Rs 200 crore on marketing, which comes to 20%. We haven’t been tracking it in comparison to Gross Margin.
Arjun: Our Gross Margin is about 60%, so that translates to Rs 600 crore. Which means our AdSpend as a percentage of GM is 33%.
Rajesh: That’s quite significant. While spending 25-50% of GM on marketing isn’t unusual in a growth phase, the real issue lies in what you’re getting for that spend. This brings us to the second critical metric – AdWaste. I estimate that half of your Rs 200 crore AdSpend is being wasted.
Maya: How can you say that? We measure ROAS (Return on Ad Spend) and track a range of industry-standard metrics. We’re in line with our competitors.
Rajesh: Maya, let me ask you two important questions. First, what percentage of your acquired customers – who are more like prospects – don’t end up buying and don’t give you any contact information? Essentially, how many of them are wrong acquisitions? This includes low-value customers who spend too little to justify the acquisition cost. Second, how many of the customers you acquire are actually reacquisitions? These are customers who had become dormant or churned, and you’re reacquiring them through adtech spending. Have you looked into these metrics?
Maya: Rajesh, we haven’t been tracking those specifics. Our focus has been solely on ROAS. We have the data to answer your questions, but we’ve never analysed it this way. I’ll pull those numbers now. Meanwhile, could you explain why these metrics are so critical?
Rajesh: AdWaste is the single biggest profit killer in digital businesses. Arjun, I know you run a tight ship, but AdWaste is often hidden within overall marketing expenses, making it harder to spot. My guess is that you’ll find around half of your marketing budget is wasted on wrong acquisition and reacquisition. And I’m willing to bet that 80-90% of your Rs 200 crore marketing spend is going to adtech platforms like Google and Meta. That means close to Rs 100 crore could be AdWaste. Imagine how your profits would look if a large chunk of that money went directly to your bottom line.
Arjun: Our profits last year were Rs 10 crore on a Rs 1,000 crore topline. If what you’re saying is true, we could potentially 10X our profits by eliminating AdWaste! But is that really achievable?
Rajesh: Absolutely. And that’s exactly what we’re here to discuss. The key lies in shifting your focus from acquisition to retention, and from AdSpend to Earned Growth.
Maya: Rajesh, I’ve pulled the numbers you asked for. You were right. Out of the Rs 180 crore we spend on digital marketing, Rs 40 crore was wasted on wrong and low-value acquisitions. Another Rs 50 crore went to remarketing efforts. That totals Rs 90 crore – 50% of our AdSpend is essentially AdWaste.
Rajesh: Not surprising at all. Before we dive into solutions, let’s discuss the third key metric – Earned Growth. This is where the real opportunity lies, and it’s how we’ll turn your situation around.
3
Earned Growth
Rajesh: As you’ve probably realised, our goal is to drastically reduce AdWaste – ideally to zero. By cutting your AdSpend in half, from Rs 180 crore to Rs 90 crore, you could increase your profits from Rs 10 crore to Rs 100 crore. And that’s without even factoring in the potential for increased revenue from building stronger customer relationships. We’ll delve into that shortly. But first, let’s talk about Earned Growth.
Arjun: I have never heard of that metric. What is it?
Rajesh: Earned Growth is the metric that truly reflects the health of your business. Unlike traditional growth metrics that rely heavily on paid acquisition, Earned Growth measures the organic expansion of your customer base driven by customer satisfaction, loyalty, and word-of-mouth referrals. It’s the growth that comes from your customers recommending your brand to others and returning to make repeat purchases.
This metric is powerful because it combines the impact of retention and referrals, leading to sustainable growth without the heavy reliance on adtech spending. By focusing on Earned Growth, you’re investing in long-term customer relationships that not only reduce your CAC but also increase your Customer Lifetime Value (LTV), ultimately driving higher profitability.
Maya: What is the formula for calculating Earned Growth?
Rajesh: Earned Growth can be understood as a combination of two key components: Net Revenue Retention (NRR), which is the revenue retained from existing customers over a period of time, including upsells, cross-sells, and renewals; and Earned New Customers, the number of new customers acquired through referrals, word-of-mouth, or organic channels, without paid acquisition costs. Here is the formula: Earned Growth = Net Revenue Retention (NRR) + Earned New Customers – 100.
Arjun: As Maya calculates this, why is this important?
Rajesh: The key to profitability is simple: Low CAC and High LTV. Unfortunately, many businesses have it backwards – High CAC and Low LTV, which makes profitability an elusive goal. No business can achieve sustained success without ensuring that existing customers not only return but also bring along their family and friends. This fundamental principle has been overshadowed in the frantic race to acquire digital customers.
Earned Growth is all about leveraging this concept – it’s the revenue generated from loyal, returning customers and the new customers they bring through positive experiences and referrals, rather than through costly advertising. By prioritising Earned Growth, companies focus on organic, sustainable growth driven by customer satisfaction and loyalty. In short, it’s about shifting your focus from acquisition to retention. From the numbers you shared earlier, your retention budget is a mere tenth of your acquisition budget. That imbalance is a big part of the problem – and correcting it will set the foundation for sustained profitability.
Maya: I’ve got the numbers Rajesh requested. Our Net Revenue Retention (NRR) was 75, and revenue from referrals was 10. That puts our Earned Growth at 75 + 10 – 100, which gives us a negative -15. Clearly, that’s a problem.
Rajesh: Yes, it is. A healthy business should not only have a positive Earned Growth number, but ideally, one closer to 30-40. For that to happen, your NRR needs to increase to at least 120, and your revenue from non-paid acquisitions should rise to 20. Achieving these numbers means shifting your focus to retention and customer-driven growth, which will drive both profitability and sustainability.
Arjun: I’m starting to get a clearer picture now. We need to stop getting caught up in the endless cycle of wrong acquisitions and reacquisitions, and instead focus on customer-centricity – driving more growth from our existing customers and through referrals. But is this really achievable? If it were so simple, wouldn’t everyone be doing it?
Rajesh: I’m glad you’re seeing the bigger picture. Understanding the problem is the first step towards solving it, and you’re already halfway there! Now, let’s dive into the actionable steps that will make this shift a reality.
4
Retention Re-engineering
Rajesh: The reason so many businesses rely heavily on adtech spending is because current retention marketing efforts are simply ineffective. It’s not easy to get existing customers to spend more, so the default solution becomes constant new customer acquisition. And adtech platforms make it incredibly simple: hire an agency, set a cost-per-click budget, and open the spending tap.
Maya: Yes, Rajesh, we’re definitely guilty of that. The martech platforms we use have potential, but they’re complex and difficult to fully leverage. Crafting customer segments, designing personalised journeys, creating content through our creative agencies, and then analysing and refining the outcomes – it’s hard work, and doing it every day feels overwhelming. I know our customers face friction in both our engagement and conversion funnels, and I’m aware that our data is siloed. But solving these issues seems daunting. I’m not even sure if effective solutions exist, and that’s why we tend to fall back on the ease of adtech spending and constant acquisition through auctions. I know it’s not ideal, but what’s the alternative?
Rajesh: Welcome to the world of Retention Re-engineering, where we transform random, one-off revenues into predictable, recurring streams, and pave the way for exponential, forever profitable growth. This is how we build a true profipoly. Now, let’s begin by reframing the challenges you face with retention. There are three core issues: first, a lack of deep customer understanding, which limits effective personalisation; second, the absence of hotlines, leading to what I call “attention recession”; and third, the underutilisation of your martech platforms, which prevents you from unlocking their full potential for driving retention.
Maya: We’re doing all the basics. We have a CDP (Customer Data Platform), and we’ve built a unified martech stack that enables journey orchestration and personalisation. We’re leveraging all the communication channels – email, SMS, WhatsApp, RCS, push notifications. So, what are we missing?
Rajesh: You’re doing the right things, but they aren’t enough. That’s why martech spending has become just a fraction of adtech spending. Think about it: as consumers ourselves, we receive countless messages in our inboxes that feel irrelevant. Most of them are generic posters or teasers with a single call to action – click through to a website or app.
Then, when we visit those brand properties, funnel frictions cause drop-offs at every stage. We don’t see personalised products or recommendations tailored to their preferences. The search functionality often feels clunky, delivering imperfect results that frustrate us rather than guiding us to what we need. Slow loading times, complex navigation, and unclear calls to action create additional obstacles. Instead of a seamless, intuitive experience, we encounter friction that causes us to abandon their journey before completing a purchase. These issues, though common, are major contributors to the high drop-off rates in digital commerce. Quick question: of all the customers who visit your properties, how many actually complete a transaction?
Maya: Around 3%.
Rajesh: So, 97% of visitors don’t buy. What happens to them? They arrive with intent, but something causes them to lose their way. Combine that with the fact that 90-95% of messages sent are ignored, and 60% of customers are “one and done,” and you begin to see the full extent of the problem.
Maya: Yes, our numbers are similar, and that’s exactly what we’re grappling with. We think we’re doing everything right, but clearly, something is off.
Rajesh: It’s not just you – this is an industry-wide challenge. This is where the need for disruptive innovation comes in. Fortunately, solutions are emerging. Three breakthroughs are about to transform the way you approach retention: AI Twins, Channels 2.0, and Kaizen Services. Together, they form the foundation of what I call “Retention Re-engineering.”
5
AI Twins
Arjun: This is exciting. Tell us more about these breakthroughs—AI Twins, Channels 2.0, and Kaizen Services. I’m familiar with Digital Twins, but what exactly are AI Twins?
Rajesh: Great question, Arjun. AI Twins are a step beyond Digital Twins. While Digital Twins replicate physical assets in the virtual world, AI Twins are dynamic, data-driven personas created for your customer segments. These AI Twins are built using observable and deterministic data, allowing them to mimic real customer behaviours, preferences, and decision-making patterns. By engaging with these AI Twins, you can simulate interactions, test different strategies, and predict customer responses in real-time.
The real power of AI Twins lies in their ability to evolve. As more data flows in from customer interactions, these Twins become smarter, enabling more precise personalisation and proactive engagement. You’re no longer reacting to customer actions after the fact; instead, you’re anticipating their needs and delivering the right message at the right time. This is how you start shifting from a “one-size-fits-all” approach to true N=1 personalisation.
Maya: Give me an example.
Rajesh: Sure. Let’s say you have a customer segment of high-value shoppers who regularly purchase electronics. With AI Twins, you create a digital persona that represents this segment, capturing key data points like purchasing habits, browsing behaviour, and product preferences. Now, instead of sending generic promotional emails to this entire segment, your AI Twin can help simulate the best timing, content, and offers that would resonate with them.
For example, if the AI Twin predicts that a portion of this segment is likely to upgrade their smartphone within the next three months, you can start a proactive campaign targeting those customers with personalised recommendations, exclusive offers, or reminders about trade-in options.
What’s more, you can ask the AI Twin to rank your content options by effectiveness. It can analyse previous campaign data and customer responses to determine which messaging, visuals, and offers are likely to perform best. This helps you optimise your marketing efforts and ensures that your communication is as impactful as possible. The AI Twin enables you to move from reactive marketing to predictive marketing, where you’re not just responding to past behaviour, but anticipating future needs and building loyalty in the process.
Maya: I’d love a twin for myself!
Rajesh: Ah, Maya, you’re ahead of the game! That’s exactly what’s coming –a Co-Marketer for you. With Agentic AI, we’re talking about a multi-agent system that can handle these interactions at scale, customising the right content for every segment, and eventually for every individual customer. Your Co-Marketer will be like an AI-powered copilot, orchestrating campaigns, testing strategies, and helping you make data-driven decisions with ease. It’s about taking the complexity out of personalisation and enabling you to focus on high-level strategy while the AI handles the heavy lifting.
Arjun: What about the data? How will these AI Twins get created? Is this something we can start doing right away?
Rajesh: Excellent question, Arjun. The creation of AI Twins is built on the foundation of what we call the Large Customer Model (LCM). Think of the LCM as the next evolution of your existing Customer Data Platform (CDP), but on a far more integrated and expansive scale. The LCM consolidates data from every possible source – transaction history, behavioural insights, and adtech data, which tracks what your customers are doing across the Internet. This comprehensive, unified view allows you to create AI Twins that are significantly more intelligent, adaptable, and effective than anything a traditional CDP could ever deliver.
And yes, you can start right away. By using the LCM as your underlying data foundation, you can begin creating AI Twins for customer segments almost immediately. These Twins will represent different customer personas, built on real data and continuously evolving as more information flows in. Over time, as the AI learns and refines itself, you can transition from Segment-based Twins to Singular Twins – highly personalised AI-driven models for individual customers. Singular Twins of your most loyal customers would be the place to begin. The sooner you integrate your data into the LCM and start building these AI Twins, the sooner you’ll see the benefits of predictive, personalised engagement at scale.
Maya: So, the first big idea is to leverage the power of AI – to create a Large Customer Model with our data, a Co-Marketer for me, and AI Twins for our customers to drive towards the ideal of N=1 personalisation and solve the problem of customer understanding. What’s next?
6
Channels 2.0
Rajesh: The next big idea is Channels 2.0. While you’re already using communication channels like email, SMS, WhatsApp, and push notifications, you are doing so as a one-way broadcast. Channels 2.0 is about enhancing these interactions to make them more dynamic and interactive. This is where AMP for Email, rich messaging on platforms like RCS and WhatsApp, and embedded conversion actions come into play.
Imagine an email that isn’t just a static message but a mini-app that allows customers to complete transactions, provide feedback, or interact with personalised content right within the email itself. You can do something similar on WhatsApp as well. Channels 2.0 eliminates the friction of clicking through to websites or apps, making engagement seamless and driving higher conversions directly within the communication channel.
Arjun: I want to talk about email a bit more. We’ve been using it as a channel for years, but its effectiveness has dropped recently. The inboxes are flooded, and it’s hard for us to stand out. We’ve been relying more on WhatsApp, but that’s becoming expensive. What do we do?
Rajesh: You’re right, Arjun. WhatsApp is excellent for bottom-of-funnel conversions, but it’s not ideal for regular marketing to a large customer base. As for email, your observations are spot on. Email has become cluttered, and many messages feel like noise to the recipient. But this is where some key innovations can really transform your approach.
First, realise that many of your emails are essentially functioning as ads – teasers with a simple clickthrough prompts rather than valuable content. To change that, you need to make emails more interactive. One way to do this is by incorporating Epps (email apps) into the body of the email, allowing customers to complete transactions directly within the email itself. This could result in a 5-10X increase in actions.
Second, think about creating a wrapper around the email body – a concept I call the Email Envelope. Use gamification in the Subject line, with Atomic Rewards like Mu, to entice your customers to open the email. Add a footer with utility content, entertainment, or even games to encourage them to engage with the entire email, from start to finish. In short, make opening your email a habit.
Here’s a parallel: Ever wonder why the Times of India added a Calvin and Hobbes comic strip to their op-ed page?
Maya: You know, I’ve noticed that! I’ve been checking the page regularly just to see my favourite characters!
Rajesh: Exactly. The op-ed page has always had serious content, but presumably, readership was low. The comic strip acts as an attractor, drawing people in. Now think similarly for your emails. By creating an Email Envelope as a wrapper around your content, you can solve the problem of low open rates and engagement, and drive more in-channel conversions.
Maya: This is so exciting. For a long time, email has been our highest ROI channel. I think we took it for granted as we shifted more of our focus to adtech. We started using it as just another display channel – a static image with a clickthrough link.
Rajesh: That’s where Channels 2.0 comes into play. They’re key to building direct hotlines with your customers. The more they engage with your push messages, the less you’ll need to rely on adtech for reacquisition.
Arjun: But there’s one issue. We like having customers click through to our website or app so we can showcase a broader range of products. If they engage directly within the email, doesn’t that limit what we can show them?
Rajesh: That’s a common concern but think about it from the customer’s perspective. Do they really want to see everything you have? How many of those products are actually relevant to them? Instead of trying to drive everyone to your website, think of email and WhatsApp as new, valuable properties where you can deliver personalised, high-value experiences.
Maya: Maybe we should ask the AI Twins what they like!
Rajesh: Exactly, Maya. AI Twins can help you figure out not just the Subject lines and content that will resonate, but also the best timing and channels for each customer. You can use specialised LLMs for email and other channels, combining them with performance data from past campaigns to achieve hyper-personalisation.
And there’s one more thing. You can use ActionAds within your emails to generate additional revenue. These ads are built around the 4 Ps: PII, push, in-place, and payments. Think of it as creating your own “email media network,” where you can run ads from non-competing brands. Since these ads don’t require a click out of the email, they provide a seamless experience for your customers. This way, ActionAds become a win-win – adding value to your emails while creating a new revenue stream for your business.
Arjun: This is so exciting! You mentioned a third breakthrough as part of Retention Re-engineering. What is it?
Rajesh: That’s where Kaizen Services comes in. Let’s dive into that next.
7
Kaizen Services
Rajesh: Maya, one of the challenges you mentioned is that martech platforms are difficult to use to their full potential. And you’re right. Martech vendors are often focused on selling the software, but they tend to have little interest in offering the services needed to maximise its use. The reality is that running effective retention marketing requires constant effort—it’s labour-intensive and time-consuming. This is where the concepts of Kaizen Services and Service-as-Software come into play.
Maya: Kaizen – that’s a Japanese word meaning continuous improvement. How does it fit in here?
Rajesh: Exactly, Maya. Kaizen Services embody the philosophy of continuous improvement, but with a modern twist – using AI to automate that process. AI = Automated Improvement!
Think of it as applying AI to consistently optimise your marketing efforts, adjusting strategies in real-time to reflect changes in customer behaviour. The idea is to have your martech vendors add a thin layer of services on top of their platforms. After all, who knows their platforms better than they do?
Here’s where it gets interesting: these platforms are powered by AI models that need constant tweaking to stay relevant and effective as customer interests and actions shift. But instead of you having to handle all that complexity in-house, imagine being able to collaborate with your martech vendor to fine-tune these models and improve outcomes continuously. By incentivising them to work with you on driving results, you essentially transform your vendor into what I call a “Progency”—a hybrid of product and agency.
This is where the concept of “Service-as-Software” comes in. Rather than just offering a static software solution, the martech company delivers ongoing, AI-driven services that evolve with your needs. It’s no longer just about selling you a platform and walking away –it’s about partnering with you for long-term success, constantly improving the AI models, and ensuring your retention strategies stay ahead of the curve.
Maya: I love the idea of continuous improvement with AI driving it. But practically speaking, how do we get our martech vendors on board with this? I’ve dealt with vendors before, and most of them are focused on selling licenses rather than providing hands-on support. How do we incentivise them to care about our success beyond the initial sale?
Rajesh: That’s a valid concern, Maya. Most martech vendors operate on a software-as-a-service model, and their primary focus is on scaling their platform rather than offering tailored services. But that’s where the opportunity lies. You can change the dynamic by moving beyond the traditional vendor-client relationship and structuring a partnership model. This is where the idea of Progency comes in – a hybrid of product and agency, where your vendor becomes an extension of your team, invested in your success.
To make this work, you need to rethink the compensation structure. Instead of just paying for licenses, you can create a revenue-sharing or performance-based model. For example, if their AI-driven services help improve your retention rates or increase your LTV, they share in the upside. This incentivises them to continuously tweak and optimise their platform to deliver better results for you.
In essence, you’re turning your martech vendor into a partner that’s as committed to your long-term growth as you are. They’re no longer just providing software; they’re actively involved in helping you achieve your business goals. This alignment of incentives is what makes Kaizen Services so powerful.
Arjun: And as they say, 1% better every day means 37 times better in a year.
Rajesh: You’ve nailed the math, Arjun! That’s the essence of Kaizen – small, consistent improvements that compound over time into massive gains. When applied to retention, this philosophy can create exponential growth in your customer relationships and profits.
So, what do you think? With these breakthroughs – AI Twins for deep personalisation, Channels 2.0 for seamless engagement, and Kaizen Services for continuous optimisation – a can these transform your retention programs and give you the edge you’ve been looking for?
8
Nayi Disha
Arjun: Rajesh, I have to admit that both Maya and I were a bit skeptical when we were asked to attend this meeting. I couldn’t help but wonder what new insights you could possibly share about marketing that we didn’t already know. But after this conversation, I see a glimmer of hope. For the first time, I feel optimistic about controlling our marketing expenses while simultaneously driving revenue growth. If we can get this flywheel of High LTV and Low CAC going, I’m confident that we can significantly boost our profits.
Maya: I agree with Arjun. I’ve been in marketing for two decades, and this is the first time I’ve encountered ideas that are truly transformative. I feel re-energised. When I first started my career in marketing, I saw it as the central to a business – just as Drucker said, innovation and marketing are the two most important functions in any company. But somewhere along the way, marketing seemed to lose its primacy. It became just another cost centre, and we, as marketers, turned into collection agents for the big adtech companies.
What you’ve shared today is more than just a playbook – it’s a blueprint for restoring marketing’s rightful place as the heart of a business. Marketing should be about understanding customers deeply and building lasting relationships with them, so they stay loyal and bring their family and friends. With these ideas – AI Twins, Channels 2.0, Kaizen Services – I can finally see a roadmap to make that happen.
Arjun: Exactly. And with that, we can finally drive profits growth, giving us the financial breathing room to reinvest in new product development – something we haven’t been able to prioritise for years.
By the way, Rajesh, you mentioned a term earlier that intrigued me: “profipoly.” What exactly does that mean?
Rajesh: First, let me thank both of you for being such attentive listeners today. Over the years, I’ve had countless conversations with CMOs, which have given me a deep understanding of the challenges they face. Some solutions – like Velvet Rope Marketing for your Best Customers – are obvious, yet often overlooked. But it became clear to me that what’s truly needed is a unified theory of marketing, one that addresses all aspects of the value chain: understanding your customers, creating direct channels of communication, and ensuring that martech platforms are constantly improving.
However, none of this can happen without strong collaboration between the CEO and CMO. CMOs need to see themselves as future CEOs, and CEOs need to empower their CMOs to think beyond the marketing silo. Unfortunately, in most companies, the CMO rarely ascends to the top job, and that’s reflected in the shortest tenure among C-level executives. But that can change.
What I’ve shared with you today is a Nayi Disha – a new direction for marketing. When done right, it has the power to transform profitless companies into profipolies. And by profitless, I don’t just mean companies that are operating in the red – I’m also talking about those that are handing over a large share of their profits to the adtech giants.
Now, to explain “profipoly,” Arjun. In every industry, there’s a finite pool of profits. The goal of a successful business should be to capture the largest share of that pool, thereby depriving competitors of the resources they need to grow. This is the strongest moat you can build – a foundation for exponential forever profitable growth. When a company achieves this, it has created a profipoly – a monopoly on profits in its industry.
Maya: Rajesh, listening to you has inspired me to make a decision. I’m no longer going to think of myself as just the CMO. From now on, I’m designating myself as the Chief AI and Profits Officer! For too long, we marketers have been caught up in the race for growth at all costs. That stops now. I’m determined to show my peers that there is a better way – a Nayi Disha for marketing. I’m going to take marketing back to where it belongs – the fulcrum and profits creator of the business.
And Arjun, if I succeed, you might just want to consider me as your successor when the time comes!
Arjun: Maya, that’s exactly the spirit we need to transform our company!
Arjun and Maya: Thanks so much, Rajesh. Our Retention Revolution and Profiquest begins now!