The previous part covered the five themes that ProfitXL’s SHUVAM framework is built around: Story, Hotlines, Unistack, Velvet Rope Marketing (VRM), Acquisition (done right), and a new set of Metrics to measure progress.
Part 2 continues the thread of how to sell ProfitXL as a system for marketers to adopt and make it part of their day-to-day operations.
Selling the Problem
The first step towards selling a system is to sell the problem. In the ProfitXL case, the problem is that brand profits are being hurt by the twin problems of low revenue growth and high marketing spending on new customer acquisition.
In most B2C/D2C businesses, profitability is not the responsibility of the marketer. The marketer’s focus is to grow revenues. This can be done in two ways: get more from existing customers (a hard problem) or to get new customers (an easy problem, thanks to the digital advertising platforms). No prizes for guessing what really happens in brands!
This channeling of funds to auctions for customers has perhaps been the single biggest transfer of profits in history – from brands to Big Adtech. Marketers do not want to see their budgets slashed so they do not admit that half of the spending is actually being wasted – and unlike in traditional media, it is possible to track this waste in digital media.
CEOs and CFOs do not focus on the spending as much because of the belief that reducing spending will hurt topline growth, which would be extremely harmful for their careers! So, we have the perfect happy cycle of spend-to-grow for everyone (except investors and shareholders). Low profits? Blame it on the rising CAC (customer acquisition cost).
There was no escape route for brands and marketers – until now.
A number of innovations can drive more revenues from existing customers along with a reduction in AdWaste. The problem is: who will bell the cat?
Marketers will see this as much more grunt work as compared to calling an agency and giving them a budget for new acquisition. CFOs do not understand the world of marketing so they tend to stay away. CEOs worry about managing the Board and overall business growth. With investors hungry for growth, it is much easier to keep the spending train running rather than experiment with new ideas.
The question then becomes: how to break this cycle? My hope is that the funding winter and the consumption slowdown will make businesses re-evaluate their spending priorities and open up to new ideas.
ProfitXL is one such idea. It is that ray of hope that it is indeed possible to build a profits machine that can fund continuous product innovation to create a moat and monopoly.
ProfitXL is centered around the belief that businesses can build a profits machine leading to a profipoly if they take good care of their existing customers.
This means systematically weeding out everything that creates a broken customer experience. Each friction is a profit killer. ProfitXL is the system that eliminates all such pain points, thus converting the broken experiences into beautiful experiences. It is this idea that needs to be sold to CMOs, CFOs, and CEOs.
Show, Don’t Tell
Let’s say you are the marketer of an ecommerce brand. You have two options.
- Keep spending 85-90% of your marketing budget on new customer acquisition (with half of it being wasted on wrong acquisition and reacquisition, and CAC rising 40-50% year-over-year)
- Not fix the broken customer experience on your website/app due to poor catalog data and silo-ed interaction data resulting in sub-optimal relevance and omnichannel personalization
- Not create differentiated and delightful experiences for your correctly identified 20% Best Customers who account for 60% of revenue and 200% of profits
- Continue to be over-reliant on web/app for conversion, accept attention recession on push channels, and miss out on new super-effective funnels
- Live with less happy customers, hyper-competition, and lower or no profits
- Do the opposite of Option 1 choices
- Transform broken customer moments into beautiful experiences
- Create the ultimate business moat by maximizing industry profits (ProfitXL)
What do you choose?
The answer is, of course, obvious. The challenge is how to bring this to life?
For ProfitXL to work, it is not just adopting a single point solution, but buying into a system which inverts the funnel by making the Best Customers the priority and ensuring that paid new customer acquisition is the last resort.
This is the conundrum I have been working on for the past few months. My natural approach is to show the power of the products we build, rather than present the problem first.
For ProfitXL to succeed, I will have to make the problem visible and then talk about the system which leads to the solutions. In fact, more than talk, I realized I have to ‘show’.
My mind went to the Broadway shows I have seen. No written description can do justice to the experience of being there in person. The constraints of the stage space are blown away by the ingenuity of the show creators. For a couple of hours, the audience is transported into a different world of action, dialogue, and music – happening right in front. “Hamilton” transported me back to the America of the late 1700s, while “Some Like It Hot” took me back in time a hundred years to the Prohibition Era.
The question that I started to think about was: could I create a (virtual) Broadway-like show to persuade decision-makers about the power of the ProfitXL system, and thus create a ‘landing idea’ before the product-centric ‘land-and-expand’ approach kicks in?
I decided to ask ChatGPT.
ChatGPT does The ProfitXL Show
Here is how ChatGPT suggested I do a Broadway-like show for the ProfitXL system.
Theme and Setting: The theme should focus on the struggles of traditional marketing and the potential benefits of ProfitXL. The setting could be a modern marketing agency, with a cast of characters including marketers, executives, and customers.
Story and Plot: The story could follow the journey of the agency as they transition from traditional marketing to ProfitXL. The plot could involve the struggles and challenges they face, such as convincing skeptical executives, overcoming AdWaste, and identifying and rewarding Best Customers.
Characters and Casting: The cast should be diverse, including actors who can play marketers, executives, and customers of various ages, genders, and ethnicities. You could also consider casting professional dancers and singers to perform musical numbers throughout the show.
Musical Numbers: The show could include musical numbers that highlight the benefits of ProfitXL, such as ‘From Acquisition to Profit’, ‘Flip the Funnel’, and ‘Velvet Rope Marketing’. The musical numbers could be choreographed with high-energy dance routines and catchy lyrics.
Visuals and Effects: The show could incorporate high-tech visuals and special effects to bring the story to life, such as holographic projections and interactive elements. The visual effects could showcase the agency’s journey towards ProfitXL, from AdWaste to frictionless omnichannel personalization.
Key Takeaways: The show should end with a powerful message that summarizes the benefits of ProfitXL and encourages the audience to take action. You could also provide resources or materials for further learning, such as a guidebook or an online course.
Not bad, huh?!
I further asked ChatGPT to tell the story from the point of view of a B2C/D2C brand with the characters being the CMO, CFO, and CEO, and show how the team transitions from the wasteful ad spending to adopting the ProfitXL system. Here is the output:
The story begins with the CMO, CFO, and CEO of a B2C/D2C brand gathered in the CEO’s office, discussing the company’s marketing. They’re all frustrated with the amount of money they’re spending on advertising, yet they’re not seeing the desired results. The CMO explains that they’re acquiring new customers, but they’re not retaining them, and the CFO expresses concern about the rising cost of customer acquisition.
Suddenly, the CFO suggests a new approach to marketing, inspired by a recent conference he attended. He introduces the concept of ProfitXL, which focuses on shifting away from acquisition-centric marketing to profit-centric marketing, with a strong emphasis on existing customers and frictionless personalization. The CMO is intrigued and the CEO agrees to explore the idea further.
The team begins to dive deeper into the ProfitXL system, meeting with consultants and experts to learn more about it. They start to see how ProfitXL could help them solve their biggest marketing challenges, such as reducing AdWaste and increasing customer retention.
As they begin to implement ProfitXL, they face some challenges such as retraining their marketing team and rethinking their budget allocation. However, as they start to see the benefits of the system, they become increasingly enthusiastic.
The CMO focuses on nurturing existing customers and identifying their Best Customers, while the CFO tracks the metrics that matter, such as AdWaste and Earned Growth. The CEO realizes that the ProfitXL system totally aligns with the company’s values of sustainability and long-term growth.
The team begins to see tangible results from their adoption of ProfitXL. They’re able to reduce their AdWaste by identifying and rewarding their Best Customers, and their customer retention rates begin to increase. They’re also able to reinvest the money they saved from reducing AdWaste into frictionless personalization and other initiatives that drive profit.
The CMO, CFO, and CEO are thrilled with the success of their new marketing approach. They realize that the ProfitXL system not only helps them drive profit, but also resonates with their values and strengthens relationships with customers.
The show ends with the team reflecting on their journey towards adopting the ProfitXL system and the audience is left with a clear message:
“By focusing on existing customers and shifting away from AdWaste, brands can achieve sustainable, long-term growth.”
Stay tuned for more on ProfitXL!