This is the concluding part of ‘4M and Netcore 2.0: A Framework for Exponential Growth,’ first mentioned in ‘Mystery of the Missing Profits.’ In the fifth part, I discussed challenges faced by consumer-facing digital businesses and why Netcore must transition into a new incarnation, Netcore 2.0. In this concluding part, I will talk about two products that can act as a starting point for Netcore 2.0 in its PxL avatar: Email Shops and a Reactivation Progency.
PxL, Email Shops, and Progency
Two products can serve as the starting point for Netcore 2.0 in its PxL avatar: Email Shops and a Reactivation Progency.
The ProfitXL (PxL) framework primarily focuses on three categories of customers: the top 20% Best Customers, 80% Rest Customers, and the Next acquisitions. PxL creates three teams to focus on each of the Best-Rest-Next segments. The mission for the teams: Maximize (Best), Energize (Rest), and Minimize (Next).
If done right, eCommerce companies can drive an additional 10% upside on revenue and gross margin and halve spending on new customer acquisition costs.
This addresses the twin problems of low conversions and rising CAC resulting in a multiplier effect on EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), supersizing profits and transforming the brand’s P&L. Five key interventions can help brands convert profit-killing moments into profit creators. These are:
- Addressing dormant users
- Engaging (email) non-openers
- Incentivizing (email) non-clickers
- Improving website and app engagement
- Reducing cart abandonment
Email has primarily been one way: Brands send a list of items or images and hope consumers will click through to the website or app. This friction has kept action rates low. Thanks to our early campaigns using AMP for emails in India, the increase in actions has been astounding across the customer journey.
The transformative solution in eCommerce is to think of websites and apps inside email – where the entire journey from search and browse to purchase can be completed within the inbox. This is made possible through AMP. Email Shops are the next storefronts that marketers can control because they can ‘push’ messages to their customers rather than rely on them to visit their brand properties.
Combined with Atomic Rewards and other non-transactional actions, Email Shops can increase conversions exponentially, reducing the need for expensive and continuous new acquisitions to drive revenue growth, becoming profitability drivers for brands.
“While Rest Customers generate some revenue, they could negatively impact profitability because of marketing and servicing costs. This is where brands must consider outsourcing the management of these customers to a ‘Progency’ which focuses on activating and engaging them and getting them to create carts ready for checkout using Email Shops.” (PxL – Transforming eCommerce P&Ls)
“Progency is a Martech services entity where the product (Unistack) meets agency, working like a performance marketing entity taking on KPIs and delivering outcomes that marketers desire. A Progency must combine software and analytical skills with traditional creative skills, uniting left-brain and right-brain resources, working as an extension of the marketing department, taking on specific tasks with success-linked compensation.” (ProfitXL: Supersize Profits with the SHUVAM Framework)
“The Progency can work on dormant customers and reactivate them using push messages, rewards, affinity-based content, full stack DXP (Digital Experience Platform), and a touch of paid media. It takes complete responsibility for the dormant database and delivers activated customers at a lower price point than what reacquisition would cost.” (The Coming Martech Era: Driving Exponential Forever Profitable Growth)
The PxL mindset of transforming a brand’s P&L builds on the ‘ubiquity, utility, and uplift’ theme. The two ‘blue ocean’ products are Email Shops, which bring the conversion funnel closer to the engaged Best Customers, and a Progency, which focuses on reactivating the Rest Customers.
If these are done right, the challenge of Next Customers can also be addressed, bringing down CAC considerably. Reactivation replaces reacquisition, referrals from Best Customers slash CAC, and the Best Customer Genome (BCG) can target new acquisitions via Adtech.
Day 1 Again
Over the past 25 years, Netcore has carved a niche for itself, blossoming into a $100 million revenue Proficon in the highly competitive tech landscape. However, resting on laurels is not an option when disruptive innovation is reshaping industries. To thrive in this era of ‘Generative AI, ’ Netcore must leverage its strengths and infuse them with ground-breaking ideas to stay ahead of the curve.
Netcore 2.0 must embrace the Day 1 mindset, the tenacity, agility, customer focus, and innovative spirit emblematic of a startup. Netcore is uniquely positioned thanks to its core strengths:
- World-class ESP (email service provider) platform.
- Support for all push channels (email, SMS, push notifications, WhatsApp, RCS)
- Full-stack customer engagement platform
- Unbxd’s strengths in onsite search and recommendations, and AI-based catalog enrichment.
- Our India base delivers a large, cost-effective talent pool and first customers.
- A global presence through Netcore International.
- Our profitability has helped us survive and thrive over the years.
Netcore 2.0 aims to be a factory of innovation and provide differentiation in its products. A host of new ideas and technologies provide the foundation.
- AMP in email enables mini websites and apps inside email (Inbox Commerce).
- Atomic Rewards to provide micro-incentives for actions delinked from transactions.
- Velvet Rope Marketing, which correctly identifies Best Customers based on their CLV.
- Generative AI to underpin all we do.
- A synergistic and complementary ‘Netcore Constellation’ through investments in ProfitWheel, Comsense, EasyRewardz, and Customer Capitals.
The first M refers to products that revolutionize the status quo and create substantial value for users. Email Shops, underpinned by AMP in email, allow the entire customer journey to occur within email. This reduces the steps, time, and friction inherent in traditional eCommerce transactions and leads to a remarkable increase in customer engagement and conversions.
This transformative product exemplifies the magical spark that sets us apart in the marketplace.
On the other hand, Reactivation Progency targets dormant customers, reactivating them and breathing new life into a segment that would otherwise require costly reacquisition efforts. In essence, we are converting a potential liability into an asset.
Together, they act as the key to the 4M journey and alignment with PxL, transforming the brand’s P&L. Companies have focused on the small pool of Martech spending and ignored the bigger ocean of Adtech spending (with 50% AdWaste). This is the opportunity for Netcore 2.0 and its partners.