Tag: Customer acquisition

In the past year, growth through acquisition has become more expensive as Cost per acquisition (CPA) increased across most channels, attribution became opaque, and cookies became less reliable. Furthermore, in the past 6 months, the financial outlook has drastically changed, and with an increase in the cost of capital, it has become less prudent for companies with limited runway to spend large sums on acquisition. 

Additionally, as Cost of goods sold is increasing and customers are not ready to absorb additional price increases due to the higher overall inflation, there is additional pressure for lean operations and reduced spending. Acquisition investment as high as 10% of total revenue has now become a challenge to maintain due to lower overall revenue and even smaller margins; hence, the focus of e-commerce operators and investors has shifted from the growth rate to operational efficiency, bringing about a big change in direction from the last few years. 

Focusing on retention and keeping your existing base engaged

Over the last 3 years, e-commerce saw an outpaced growth rate during COVID that is now becoming more stable. The question we are all trying to answer is whether it pulled the growth forward by a few years or actually changed customer behaviour. I would argue, like most things, it’s probably a bit of both, but companies who assumed that the growth rate will be maintained will face a challenge as they may have over-leveraged for growth that is now going to take a few more years to materialise. 

Most companies have to make a hard choice, whether to raise prices to maintain profitability or reduce margins to keep their base growing! I think the third less obvious option is to focus on retention and increase the profit per customer. By focusing on creating a relational e-commerce experience that delivers value to what customers deem as necessity and accepting that customers will cut their overall spending, companies can ensure that they don’t lose their existing customers and can, therefore, increase overall revenue by increasing the Share of Wallet (SOW) of existing customers. 

Brands in e-commerce that look to unlock this path will likely invest in owned channels that would keep their existing base engaged, developing automated programs to lead customers through the lifecycle from onboarding and growth to rescue to advocacy. Meanwhile, many companies use their CRM strategy as the only part of the business to engage existing customers, however, most CRM systems are not able to go beyond the basic e-commerce tools of engagement such as abandon browse and repurchase and reactivation type campaigns, unless paired with a comprehensive source of customer data. 

Leveraging data to boost brands’ customer experience

To create effective engagement, brands in e-commerce must bring together all the sources of data to create a contextual understanding of their customer’s needs and habits. Brands are able to collect zero-party data as customers engage with the site and triangulate their profile info, purchase habits, on-site browsing behaviour as well as the customer segment definitions to create a comprehensive view of their current customers and predict potential behaviours of future customers.

Brands can also use this data to identify which portion of the customer SOW is necessary and will likely continue and, on the other hand, which the customers will decide to curb spending on. This will allow them to optimise inventory, pricing, and promotions decisions for a financial downturn. For instance, one company may use points and special offers to discount categories that customers may be hesitant to spend, and on the other hand, drive orders of the essential categories to maintain profitable operations. 

Additionally, without a doubt, the best way to improve the retention of existing customers is to provide an excellent customer experience. The next few years will set a new standard for what customers expect from e-commerce platforms in terms of customer service, delivery speed and refund/return policies. To protect their market share, said platforms will compete to stay ahead of the customer’s expectations and their competitor’s capabilities. 

Hitting the home run in relational e-commerce experience

Brand recognition will also play a big part as advertising budgets shrink. The best brands will focus on customer experience and brand values rather than splashy advertising. This approach helps them to stay top of mind, bringing existing customers back to the site and focusing the smaller acquisition budget on truly new customers who are highly aligned to the near-future growth strategy of the company, and likely in categories that are less recession-affected. 

Finally, to fully leverage site traffic, e-commerce players must focus on increasing the conversion rate by reducing friction in the buying journey and focusing on increasing the basket size of customers. 

It is worth noting pricing competitiveness is still quite important as we go through a financial downturn but has historically been a smaller contributor to longevity over the brand and customer experience. Many successful brands in e-commerce will use loss leaders to harness demand and drive retention and lifetime value. 

The most successful brands provide exceptional relational e-commerce experience rather than a transactional one by knowing their existing customers better and aligning their strategy to where the customer expectations are going. 

In 2023, brands ought to focus their strategy to balance Customer lifetime value and Cost per acquisition to ensure sustainable growth without the need for constant injection of acquisitions cost. To navigate this complex plan, they must bring together teams from multiple disciplines to allow coordination of data modelling, customer engagement, and customer experience to best engage and grow the SOW of existing customers. 

This article is written by Negar Mokhtarnia, Director of Product at Pet Circle.

The insight is published as part of MARKETECH APAC’s thought leadership series under What’s NEXT 2023. What’s NEXT 2023 is a multi-platform industry initiative which features marketing and industry leaders in APAC sharing their marketing insights and predictions for the upcoming year.

If you are a marketing leader and have insights that you’d like to share on upcoming trends and practices in marketing, please reach out to [email protected] for an opportunity to be part of the series. 

As we enter the post-pandemic period, we are now dealing with an entirely new consumer – desires, needs, and motivations that have transformed to adapt to the new phase of the ‘new normal’.

Last April 20, MARKETECH APAC, in partnership with Braze, gathered marketing leaders from brands Astro Malaysia, BigPay, bolttech, Hmlet, Philippines AirAsia, ShopBack, Zeemart, and Zenius. to discover how brands are implementing their customer acquisition and retention strategies in this period of unprecedented changes as well as how they are building a culture of experimentation and optimisation in each of their organisations.

Watch the highlights from the roundtable that roped in marketing leaders from brands Astro Malaysia, BigPay, bolttech, Hmlet, Philippines AirAsia, ShopBack, Zeemart, and Zenius.

Hybrid experiences to deliver high customer engagement 

When during the height of the pandemic, consumers and businesses were thrust to interact entirely in a virtual manner, the less restricted post-pandemic meant that brands now must take into consideration the dynamics of the engagement brought by the physical experience and integrating that with the uncovered powers of the virtual space.

Allenie Caccam, head of marketing of Philippines AirAsia, shared that in order to bring cohesiveness to your customer engagement, it doesn’t stop with what is done in the brand’s app or website, but almost always culminates with an on-ground activation or face-to-face interaction “to personify the brand as a lifestyle.”

“We do drive cross channel customer engagement by identifying the critical points of engagement and addressing it through hyper-personalisation and experiential marketing,” said Caccam. 

Priyanka Nadkarni, marketing lead of insurtech bolttech, echoes this and says that it is important to follow your consumers offline, as in their case, the discovery process for insurance products doesn’t stop within digital bounds. 

“We need to remember that we’re not only digital anymore…for us, it’s really about where [do these] insurance and protection products really make real sense for the customer, and it’s not always online,” said Nadkarni.

Meanwhile, fintech BigPay also agrees with the same marketing direction. Jia Nina, country marketing lead of the brand, said that they don’t rely on the app alone, and remarked that marketing also goes beyond the app.

Raymond Muliadi, head of product at edtech Zenius, shared, “Offline will always be there. And we will not be able to dismiss online or offline. So we want to make sure that we build an ecosystem where the learning is complementing online and offline.”

Tapping into the fundamentals to effectively retain customers

During the roundtable, industry leaders were in unison about how it is to effectively retain customers in this period and that is to bank on the powers of the fundamentals – knowing your consumers inside out, and activating marketing that genuinely aligns what they want and value.

BigPay’s Jia Nina also shared her insights on this and said, “We really listen to customers… effective marketing is always a conversation, it’s not just you talking to people.”

Meanwhile, Astro’s Norsiah Juriani Johari, its VP for product marketing, believes that to keep customers coming back to your product, you have to be able to deliver authentic value exchange. 

She says that we now live in a world of transparency and that customers “can see right through you” and will know when a brand isn’t upfront about what it promised to deliver.

“Listening to the customers and really holding true to our core values at these challenging times has really helped us a great deal as a business and as a brand,” she said. 

Personalisation also came out as a top strategy among marketers for customer retention. 

Edward Tan, the associate director for growth marketing at co-living space provider Hmlet, says that personalised engagement is what is able to draw customers back to the product. 

“One thing we learned when it comes to customer retention, for locals especially, is to shift from purely selling them the co-living experience to the need for consistent and personalised engagement,” said Tan. 

When driving that cross channel customer engagement, he says, “The most important factor to us when it comes to cross-channel engagement is definitely reaching the right customers via the right channel at the right time with the right messages.”

Shopping and rewards platform ShopBack, which is currently an adopter of Braze’s consumer engagement platform, also shared to employ the same strategy, which is leveraging the best channel for customer needs and then finding the right timing and triggers for your communications. 

Its Head of CRM Scott Tan said, “For us, it’s creating a meaningful cross-channel engagement. It’s really about setting up your platform to make sure that you can (1) anticipate user needs, (2) [have] the right channel, and (3) find appropriate triggers and timing.”

Building a culture of experimentation and testing

Now that consumers have increasingly become more nuanced and that the staying power of trends is going away at lightning speed, these have put down greater importance on brands’ practices in experimentation and testing. 

For Zeemart, an F&B procurement platform, and a pre-series A startup, it’s about encouraging a positive attitude toward ‘failing forward’.

“I think the advantage of being a startup is that you’re always building, learning and iterating,” said Tan.

“Develop this attitude of failing forward, because no one really knows the answers…facilitating feedback, gathering results and going out and fixing it, and testing it again,” he added.

Meanwhile, bolttech’s Priyanka Nadkarni summed it up briefly on the topic, “To be a pioneer, own it, link together and think outside in.”

As we move towards the post-pandemic period, virtual and digital are here to stay–but only better. Consumer experiences are set to become even more ingenious and innovative now that the period has enabled us to once again bring back physical engagement and interaction.

Among the insights the industry leaders shared, non-negotiable principles of marketing stood out, agreeing that no matter what the changes, marketing will always be and should remain experimental. We don’t get to the bottom of the ‘AHA’ moment if we stick to what has already been successful or what is deemed to be the best at present, as the future ahead will only become unpredictable and challenging for marketers but also groundbreaking with the emergence of unimaginable digital interactivity. 

Watch the highlights from the roundtable that roped in marketing leaders from brands AirAsia Philippines, Astro Malaysia, BigPay, bolttech, Hmlet, ShopBack, Zeemart, and Zenius.

Take a look at Braze’s latest marketing report, ‘2022 Global Customer Engagement Review’ which shares the top three trends that are shaping customer engagement in 2022 as well as opportunities companies can seize for growth by industry and region. The report is free to download here.

As the usage of third-party data gradually moves out of the picture, this affects the way marketers approach industry disciplines, and this is across the board – from changing the way brands implement audience targeting and retargeting, the demands in order to keep every marketing funnel in optimum shape has greatly transformed.

David Harling, the former CMO and now the managing director of MoneySmart, enlightens us on one particular area – growth marketing. In an interview with Harling, he identifies the weak spots as well as strength areas of a brand’s growth marketing strategies now that the digital environment is about to fully transition to a cookieless and first-party data world.

Customer acquisition vs. customer retention

According to Harling, now that the industry is preparing to adopt first-party data strategies, the cost of customer acquisition will now increase, hence where brands are overly-dependent on gaining new customers, they must now shift the focus to customer retention.

“I think one of the main challenges that most brands are experiencing at the moment, and [something] we’ll find more challenging moving into a cookieless world this year is being too overly dependent on customer acquisition, and [not having] put enough focus into customer ownership, retention, and engagement,” said Harling.

This is true and in a particular study of SEA marketers by AppsFlyer, specifically in the area of fintech, it was found that marketers in the region spent over US$244m in gaining new users.

There is no complex reason as to why lessen the focus on customer acquisition other than continued dependence will make the “ability to grow to cost more.”

“And so clearly with third-party data going away, the targeting abilities and the ability to scale and grow customer acquisition will be more expensive. And so the overall unit economics mix of that in order to try and grow would be more challenging,” said Harling.

Balancing performance-based marketing and brand investment 

One of the challenges as well, Harling cites, in growth marketing presently is striking the balance between focusing on performance-based marketing and brand investment, where as of the present, there’s more focus on the former.

In relation to putting more attention to brands’ customer retention efforts, Harling says that it’s important, therefore, to reevaluate ad budget investment to performance-based marketing and brand investment as brands would need to double down on the latter in order to successfully keep and retain customers.

From an internal view, a qualitative study reflects Harling’s insight. According to a report by  NEON leaders, marketers are actually revealing their fears of losing a generation of strategic marketing leaders, all because of the heavy precedence on output-heavy and metric-based marketing.

“I think another big challenge is how do brands begin to be comfortable again with investing into their brand profile. Clearly, that’s harder to account for or to measure, but in terms of future growth, it’s so important to get the balance between performance-based marketing and brand investments,” shared Harling.

He adds that brands must take action despite brand and customer experience taking much more time and being a lifetime value discipline.  

“Being visible and driving awareness around products and brands is as important, but more challenging and difficult to measure. And again, it becomes more important as you move into a customer retention model,” said Harling.

Much like in a sense of doing the big things well so that the small things can take care of themselves–having a good customer onboarding strategy in place, Harling believes, is key, in order to fully make the focus on customer retention work. And effective customer onboarding can be achieved when marketing and user experience work in concert.

According to a recent 2021 study by Qualtrics, poor customer experiences cost businesses in Singapore US$11b annually, where it was found that 51% of customers in the market have cut spending after a single bad experience with a company.

“And so whatever user journeys or platform experience, or product experience you’re providing, you know, marketing and user experience need to work tighter. Once you have a good discipline to get customer onboarding, you’re making the efficiency of your customer acquisition costs stronger because you won’t need to recruit customers somewhere else,” said Harling.

Driving CRM and loyalty initiatives

Within growth marketing, Harling also shares his insights on the top strategies in successfully building CRM and loyalty initiatives. And he swears by the power of the basics –  understanding your customer better.

“Investing into good customer profiling and looking at the exchange of value that you provide to your customers in order to make them comfortable to provide you with certain things,” said Harling.

Certainly all the pivot in marketing disciplines will take place in accordance with the shift to a cookieless digital environment, and Harling believes that investment in tech such as customer data platforms (CDP) will be one of the best approaches as it puts more emphasis on first-party data as a strategy.

“CDP underpins that first-party strategy and drives good sort of contextual engagement, which again, allows brands to become more dependent or I guess grow their customer base and clearly grow their business based on retaining customers,” said Harling.

“The customer experience and customer relationship discipline – I think if you get that right, you have a good ability to profile your customers and get to know them, and I think your engagements in your CRM become more contextualized and more meaningful to get an outcome,” he added.

In addition, Harling also advises that moving forward, there will be much stronger need for the integration of marketing and product teams. While a lot of companies have jumped into the said unification, many are still not doing it right such as having disconnected KPIs and lack of common goals.

“There’s a lot of brands that say, hey, my product team is so integrated with my marketing team. And actually, if you look at it, it’s nonsense, right? And so this [needs] proper integration [and] accountability, and having common goals. I mean, you’d find a lot of these teams don’t have a joined-up or shared KPIs [and] they’re very separate in the way that they’re accountable,” Harling says.

Harling concludes that among targeted marketing strategies that brands can focus on at this period, it is starting to define their first-party data strategy that would prove to lay a strong foundation.

“And so I think any advice I could give any marketer moving into [2022] is really [to] get their heads around first-party data as a strategic driver, and really understand the relationship between good media activation of that data and also good customer onboarding,” Harling said.

He continues, “And then [figuring out] how do you use that data [to] profile your customers, and really begin to prioritize retention-based marketing, to grow your business. And I can assure any brand that takes that strategic direction, although it’s not easy, and requires a bit of time, you’ll find that you’ll grow your business based on good customer engagement.”

“Good loyalty in terms of customers coming back and driving repeat behaviors and repeat purchases – it will be less dependent on the cost of acquisition model, which I think a lot of brands are still strategically dependent on,” adds Harling.

This article is written based on an interview with David Harling, managing director of financial comparison platform MoneySmart.

The article is published as part of MARKETECH APAC’s thought leadership series What’s NEXT. This features marketing leaders sharing their marketing insights and predictions for the upcoming year. The series aims to equip marketers with actionable insights to future-ready their marketing strategies.

If you are a marketing leader and have insights that you’d like to share with regards to the upcoming trends and practices in marketing, please reach out to [email protected] for an opportunity to have your thought-leadership published on the platform.

Sydney, Australia – Creative agency The Works has been appointed by global wellness and weight loss company WW to handle the company’s creative campaigns, as well as customer acquisition.

The Works will initially manage the Spring and New Year campaigns for WW, and follows the announcement in June of commercial radio station KIIS FM star signing on radio host Jackie O as the new WW ambassador for Australia and New Zealand.

WW, formerly known as Weight Watchers, has helped Australians in its 55 years of business presence, to lose weight with its scientifically proven program for weight loss and wellness with digital, in-person and virtual workshops as well as personal coaching solutions.

Damian Pincus, founder and creative partner at The Works, stated “Now more than ever, many of us are reassessing our weight and wellness goals and are looking for expert help to do it. WW has already helped millions of people around the world with the latest nutritional and behavior change science, and we are excited to have been selected by WW to tell that story to Aussies and Kiwis looking to make positive changes in their lives.”

Meanwhile, Nicole McInnes, director of marketing and commercial at WW ANZ, commented, “The Works showed a clear understanding of the WW brand, our target audience and how they can support us across the entire customer acquisition journey. We are delighted to be partnering with the team as we work with Jackie O, our latest WW brand ambassador.”

The appointment comes after The Works had also won the brand communications account of electronic company LG in Australia more recently.