From luxury to fast fashion, the durable segment, or the perishable ones - Black Friday presents a fabulous opportunity for retailers from all industries. But have you ever wondered: why focus on optimizing your sales for just that one day? Why not use Black Friday as a gateway to earn customers for life? Everyone wants this. But how?
Brands currently employ digital marketing tactics. However, this strategy faces threats in two ways. First is acquiring new customers, and second is retaining existing customers. The rising cost of customer acquisition to get new clients, poaching competitors' clients, and keeping existing clients engaged are forcing marketers to employ discounts and offers to lure them back. Both these threats are hurting profitability, creating a lot of angst among brands.
For over a decade, brands have been obsessed with acquiring new customers rather than nurturing and creating deeper relationships with existing customers. Thanks to the large adtech platforms of Google and Meta, which provide exactly what marketers want, high ROI for low spending, brands have pumped ravenous amounts of money, which has given these two platforms an almost monopolistic control over the consumer market. This spending has been sucking away more and more money each year to the point where brands have lost control over their existing customers. Half of digital marketing is being wasted - this AdWaste is a $200 billion problem.
The current framework has two components: new customer acquisition, primarily driven by Adtech platforms dominated by Google and Meta via performance marketing, and a small portion of it for digital branding. Existing customers relationships have two parts; push notifications sent by brands via SMS, Emails, app, and browser push notifications, and the actions are done on the brand's properties (website and app), which include martech capabilities like unified customer view, journey orchestration, search and omnichannel personalization.
With this framework, questions around getting loyal customers to return often for repeat purchases, communicating better by reducing email drop-offs, and identifying and treating the best customers differently on the website can all be bucketed into three problem areas - rising CAC, attention recession for loyal customers, and suboptimal experiences on web properties.
If brands want to tackle these problems, digital marketing needs to be disrupted. Optimizing new customer acquisition, reacquisition, or improving the experience of the customers on the brand properties is not the only solution here. While this is important, the crux of the solution for brand-customer relationships lies in creating "hotlines" - a two-way customer engagement where customers and brands can actually "interact" with each other and not just a one-way push communication. They are the antidote to AdWaste. Brands need to realize that the hotline is the crux of their customer relationships. If they can shift the mindset from "delete" to "delight" in their messaging, it would solve every other problem for them.
Four disruptions promise a change to improve the brand-customer relationship. First, Email 2.0 can drive more interactions with customers in emails through AMP email, solving attention recession and eliminating the need for customers to get redirected from their emails. Second, Loyalty 2.0 can enable brands to offer "micro incentives" (Atomic Rewards) at multiple touchpoints along the customer journey. While brands have traditionally offered loyalty and reward points, there is no equivalent for the upstream (attention and data) and downstream (reviews, ratings, referrals). Gamifying tokens will be an apt solution, where marketers will be in control and persuade customers to do the next actions to maximize the customer life cycle.
Third, a full-stack Martech 2.0 platform that provides automation and journey orchestration can provide a superior customer experience and drive more customer stickiness with adequate data available in a single platform. Velvet Rope Marketing is the fourth, which is all about focusing on the best customers and creating differentiated experiences to maximise lifetime value. This is because 20% of customers deliver 60% of revenue and more than 930 of profits. The key here is to calculate CLV (customer lifetime value) right and then follow it up by decoding the Best Customer Genome.
Brands should focus on existing customers to drive exponential forever profitable growth. Earned Growth (a metric based on revenue growth from existing customers and new customers coming in via referrals) should be the North Star Metric for marketers. Email 2.0, Loyalty 2.0, Martech, and Velvet Rope Marketing 2.0 are the four horsemen to lead marketers into this new world. Get this right, and events like Black Friday will be the best opportunity to bring existing customers back for more and ensure they bring their friends!
Netcore Cloud is a bootstrapped SaaS company that helps over 6,500 customers, B2C brands and marketers create AI-powered new-age customer experiences at every touchpoint of a customer's journey. Their customers include Aldo Shoes, Danube Homes, Eros Digital, Life Pharmacy, R&B Fashions and Tommy Hilfiger to name a few.
For queries reach out to salesatmiddleeast@netcorecloud.com