This is a continuation of Stop Loss: The Power of Attention Messaging, first mentioned in ProfitXL to Profipoly: Solving the Four Funnel Frictions. In the first part, I discussed the relationship between brands and their customers and how brands fail to maintain these relationships. In this part, I will talk about how the pandemic impacted customers and brands and why marketing must return to its roots.
Post pandemic
The pandemic upended the world and broke our long-established habits. Once cherished brands (airlines, hotels, destinations, multiplexes, restaurants, and malls) had to be forgotten. Instead, newer brands (eCommerce, OTT, food delivery apps, games, edtech) entered our lives. Our lives since the pandemic have been markedly different, changing us in different ways.
Before the pandemic, I was an avid traveler, making several trips on Air India. As a family, we watched tens of movies at Inox and PVR. We ate out at our favorite restaurant every alternate week and walked around Phoenix on Sunday afternoons. How many of these brands will come back into my life with the same intensity, and how many have tried to keep their hotline with me alive? How many of these brands even know I existed before the pandemic?
We should be able to answer these questions about our once-loved brands. More importantly, brands must be able to answer these questions about their once-loyal customers.
Air India sends me monthly frequent flier mileage updates as if the pandemic never happened. On the other hand, Inox and PVR don’t even know me. While I made some bookings via BookMyShow, there were several occasions when I booked tickets directly on their website. Could they have kept the relationship alive with stories of our past and the movies and moments we experienced together?
Phoenix also doesn’t know me, although they really should after ten years together. So many restaurants have lost me to Swiggy and Zomato. Quattro and SpiceKlub have made me a part of their loyalty program, and they know every meal I have eaten. Why would they risk losing me and handing over the relationship, profits, and value to someone else?
This did not matter a decade ago because only a few of us had digital identities. Today, we have at least two: an email address and a mobile number. It costs so little for brands to contact us and maintain relationships. A few emails and messages would cost them less than a rupee each month. Brands can keep us engaged for less than Rs.10 a year.
However, most brands choose not to, choosing instead to pay ten times more money to acquire us via tech and media platforms or pay commissions to marketplaces. As a result, they lose their connection with us and any future profits. If brands do not use their first contact with us to ask for an opt-in relationship, they are making a huge mistake because they would spend much more trying to reconnect with us.
The post-pandemic world is highly digital, with years of growth being compressed into months. The smartphone has become a lifeline, transporting us to places and expanding our world of possibilities, allowing us to discover new uses of the time created due to working from home. In this competitive world, the fast eat the slow, and the smart eat the ignorant. Brands that ignore existing customers fail to build relationships, prioritize acquisition over retention, and allow attrition over attraction will fall by the wayside.
A new world is upon us, where attention matters because our choices and distractions have grown. Brands must face up to this world of Attention Recession, and the answer lies in Attention Messaging.
Marketing needs fixing
Digital customers mean digital marketing. However, digital marketing has been reduced to handing over money to Google and Facebook to pursue new customers and then spending to reacquire them when they are lost. This creates a doom loop of spending, meaning 90% of digital marketing budgets are channeled to tech giants.
As a result, marketers are locked in an arms race of spending to acquire new but less valuable customers and a growing pool of inactive customers. Meanwhile, the revenues and profits of the tech giants reach record highs, and D2C marketers face a challenge with marketplaces such as Amazon eating away budgets in hypercompetitive search placements.
Marketing, the art form of getting attention, is broken. It has become an act of getting new acquisitions. Thanks to their wonderful dashboards and targeting abilities, it is easy to spend on Google and Facebook. However, getting customers to pay attention to brand messages in overflowing inboxes takes a lot of work. This ‘pandemic’ of Attention Recession leads to customers ignoring brand messages and cutting marketers’ lifeline to pull them back to brand properties for transactions.
For want of attention, transactions are lost, with expensive acquisition taking its place.
Marketing must return to its roots because customers have needs, time, and money. Marketers could capture customer attention through copy, imagery, and creativity to grab attention, surface the need, and channel the money. However, as customers became digital, data and cohorts became the focus. While budgets moved from traditional to digital, marketers missed a step.
Digital customers leave pheromones for tracking and have an identity with inboxes. For the first time, real-time messaging was possible to a segment of one or few, a subset of the traditional ‘all.’ Brands should have utilized his identity-inbox combo to ensure that the cost of engagement becomes a fraction of that of acquisition.
Research shows that firms have a 60-70% chance of repeat selling to an active customer, a 20-40% chance of repeat selling to a lost customer, and only a 5-10% chance of closing the sale on a new customer. Simply put, a transaction via retention can be 3 times more cost-effective than reacquisition and 6-10 times more cost-effective than a new acquisition.
Retention means getting attention. By breaking or not building the hotline with existing customers, marketers have just one choice: push more money to Google and Facebook. This is where Attention Messaging comes into the picture to help marketers get the attention of existing customers.
Continued in Part 3
