From internal combustion engine to electric vehicle
For over a hundred years, cars have used internal combustion engines. The burning of fossil fuels is harmful to humans and the environment. Tesla’s innovations in batteries and software have laid the ground for a new type of car: electric and autonomous, completely transforming the driving experience and creating a better future for us and our planet.
Modern marketing is on the cusp of a similar transformation moment. Brands have been plagued by ‘Adwaste’ – the half of their spending that ends up in the reacquisition of customers and wrong acquisition, causing great harm to company P&Ls. Customers are flooded with me-too messages from brands in their inboxes which they either ignore or delete. The result: customers have stopped listening to brands. This leads brands down a negative spiral of overspending on acquisition and less on retention, growth, and cross-selling, which increases brand erosion.
Marketing needs a Tesla-like solution to transform what is at the core of commerce – the brand-customer relationship. Welcome to Email 2.0.
Email 2.0
Marketers are wasting half their budgets in the mad race to acquire new customers. With customer acquisition cost (CAC) rising rapidly year on year, this ‘doom loop of ad spending’ is eating away most marketing budgets, leaving very little for building direct, data-driven, deep relationships with their existing customers. Unless addressed quickly, this ‘AdWaste’ will cause lasting damage to brand balance sheets – and even threaten their existence.
Big Tech is today’s equivalent of Big Oil – sucking away the oxygen of profits from everyone else. The flawed actions of modern marketers have meant that they have become collection agents of the ad giants – digital serfs, sacrificing their company’s profits at the altar of Google, Meta (Facebook), and Amazon, the Gods of the Tech Age.
The solution is not about trying to build the equivalent of ‘green oil’ by optimizing spends on adtech, reinventing cookies, and creating privacy frameworks. The answer to the problem of AdWaste lies not in building a better mousetrap but in eliminating it entirely. The only way to do this is to address the issue at the root of it all: attention recession on the part of the consumers.
Attention recession leads to retention recession which in turn causes continuous customer churn. So far, the only solution marketers have come up with is transaction-linked incentives in the form of discounts and offers. All these gimmicks do is negatively impact profitability without improving loyalty.
What marketers have missed is that addressing attention recession requires building a hotline to their customers and taking the 10-20% view rate of push messages to 80-90%. Only then will they be able to lower adtech spends to get their existing customers to listen, gather more data, drive greater revenue growth, and improve profitability. Without sustainable profits, a business becomes a money guzzler and eventually dies when investors pull the plug on new funding.
Solving the attention recession problem, eliminating data poverty, and reducing CAC are the pathways to driving profitable growth and must become every marketer’s top priority.
The starting point has to be reinvigorating push messaging because the only alternative to bring customers back to the website or app for transaction push messaging is massive spending on branding. Email remains the best of the push messaging channels and can, in fact, improve the efficacy of the other channels. Therefore, the focus must be on making email cool again – Email 2.0.
Email 2.0 is the Tesla-like innovation, changing the customer mindset from delete to delight, driving engagement and habit creation, and powering exponential, forever profitable growth. It is the only antidote to brand extinction because if customers are not listening, there is no point in a brand’s continuing to speak.
Email 2.0 creates habits by making the sent seen and the seen actioned. It drives mental availability for the brand by becoming a utility in customers’ lives. The power and value of Email 2.0 can transform CMOs into Chief Profitability Officers of their businesses, and perhaps future CEOs. Email 2.0, like Tesla, can truly make tomorrow’s world a better place for all of us as custodians of brands and customers of products.
Continued in Part 2
