As a precursor to understanding funnel frictions, I wrote a 5-part email series detailing the five types of funnel frictions and their detrimental effect on marketing outcomes.
1. Attention Recession – Declining engagement because of repeated marketing communications.
2. Red Journeys – Disengagement with brand properties due to irrelevant content.
3. Dormancy and Churn – Customers become inactive or switch to other brands.
4. Adtech AdWaste – Occurs due to ineffective spending on customer acquisition, a result of wrong acquisition and misguided reacquisition.
5. Anonymous Shoppers – The anonymity of customers is a significant hurdle for eCommerce companies looking to build sustainable relationships with them.
In this article, I will examine Email 2.0, the fulcrum for fixing the five funnel frictions.
The Funnel Friction Problem
eCommerce companies have been bogged down by low profitability, arising from an over-reliance on acquiring new customers, and an inability to capitalize on the lifetime value of existing ones. The consequence of this inefficiency is a staggering $200 billion in AdWaste. This is half of the $400 billion spent on Adtech each year, siphoned from the P&Ls of major eCommerce companies.
The most urgent task for eCommerce firms and Martech vendors is to reduce this wastage. This would significantly augment profit and enhance business valuations. ‘Funnel frictions’ in customer journeys are silent assassins of profits. From unidentified customers slipping through the cracks to inefficient ad spending, these frictions create hurdles in establishing customer relationships.
This leads to disjointed customer experiences, increased costs, lower conversion rates, and eroded profits. Identifying and addressing these frictions is not just about improving customer experiences but also securing a brand’s bottom line. By addressing these funnel frictions, brands can build a profipoly and an enduring eCommerce business.
Here is a summary of all the frictions and their solutions.
| Attention Recession Low opens and CTRs due to information overload and non-personalized messages. | Inbox Commerce Email 2.0, Email Shops (AMP); Engaging Footers (Atomic Rewards); Hotlines; WhatsApp Shops | All (Best, Rest, Test) Special Focus on Best | |
| Red Journeys Poor customer experience leading to drop-offs and disengagement from brand properties | Green Journeys for Next Best Action iDarpan powered by Digital Twins, Large Customer Model, and Generative AI | All Special focus on Rest and Test | |
| Dormancy and Churn Existing customers become inactive or lost. They are then retargeted for expensive reacquisition. | Reactivation Progency Email (AMP); Data Enrichment; Microns with targeted content; Atomic Rewards Partner, which combines product and agency Adtech-style Performance Pricing | ||
| Adtech AdWaste Inefficient marketing spends on customer acquisition | Near-Zero Acquisition Cost Reacquisition → Reactivation Referrals from Best Customers BCG-influenced Acquisition | ||
| Identity Gap Unknown/Anonymous shoppers | Anon-to-Known Email 2.0; AMP; Atomic Rewards; Gamification; Micro-Newsletters |
Email 2.0: A game-changing solution
The funnel frictions in question need a central ‘pivot’ or ‘fulcrum’ to enable effective resolution. Like how cloud computing has become the essential bedrock for modern business applications or how smartphones have consolidated their position as the hub for personal computing and productivity enhancement, a pivotal solution is crucial in addressing the friction points in the customer journey and profitability realm.
This game-changing solution is embodied in the concept of Email 2.0.
Email 2.0 isn’t just another incremental update. It is a fundamental shifting and reimagination of one of the oldest and most reliable forms of digital communication. Its redefined approach to email leverages advancements in interactivity, personalization, and data analytics, creating an engaging and efficient communication channel.
Benefits of Email 2.0
Email 2.0 can potentially transform the landscape of eCommerce, acting as a pivotal point for all proposed solutions. Its novelty is riveting, but its absence has restricted marketers from addressing frictions plaguing customer journeys. This has led to a growing dependence on customer acquisition to fuel business growth, an inefficient and costly approach.
Email 2.0 enhances interaction between brands and customers, shaping a richer understanding of each customer and fostering stronger, meaningful relationships. Thanks to the seamless integration of AMP, Atomic Rewards, and Microns, Email 2.0 has emerged as an omnichannel solution that tackles barriers and navigates the journey from initial contact to purchase completion. These elements make Email 2.0 the bedrock of a revolutionary approach that mitigates funnel frictions, improves customer experience, and fosters sustainable growth.
It is critical to identify an axis around which marketers and Martech 2.0 vendors can craft solutions to reduce friction in customer journeys. This is where Email 2.0, a modernized avatar of a marketing channel as old as the internet itself, comes into the picture.
The significance of a ‘push’ mechanism is rooted in its autonomy from customer-driven actions. When customers overlook or neglect an action, a push message to their inbox could pique their interest, prompting a reaction. Email delivers an unparalleled return on investment. It blends the attributes of other channels, such as the richness of app notifications, the interactivity of WhatsApp, and the immediacy of SMS and RCS, while negating their disadvantages.
Why email as a channel stands out
Unlike notifications and WhatsApp, emails are impervious to blocking, and neither require cost nor answer to a central authority. They also circumvent the length and size limitations of SMS and RCS. Email is also virtually ubiquitous, with every user on the internet having at least one email address. Email’s outreach eclipses other platforms that may not be as universally adopted. Email is also persistent. While social media platforms bury posts under new content, emails reside in the recipient’s inbox until actively deleted. This gives them a longer lifespan and a higher likelihood of engagement.
Email is also highly trackable. Open rates, clickthrough rates, bounce rates, conversion rates, and unsubscribed rates provide insights into user engagement and campaign performance. This allows businesses to tweak their strategy and content for optimal engagement and performance. Because email is tied to an identity, personalization is possible. While this is rapidly changing, with mobile numbers serving as key customer identifiers, brands must prioritize email ID collection, ensuring dual avenues to the customer.
Email 1.0, while a long-standing tool, is restricted in its potential due to a lack of innovation. Overcrowded inboxes and rampant spam have long plagued users. Emails have also been restricted in their capacity for engagement. This is because clickthroughs to websites and apps are the only actions customers can take after opening a message in Email 1.0.
Emerging from these challenges is Email 2.0.
Continued in Part 2
