The cost of marketing to consumers has become astronomical. It is preventing many companies from ever reaching profitability or growing to their highest potential. Most days at least one person asks me how to lower customer acquisition costs.
The problem is so important now because historically, brands focused on making great products and retailers did the marketing to consumers. But now multi-brand retailing is weaker every day and brands have to find their own path to getting consumers’ attention.
It’s harder than it looks.
The Last Decade Created Unrealistic Expectations
When the direct-to-consumer business exploded about a decade ago, you could advertise on social media and make a profit selling stuff. But now the cost of that marketing has exploded and getting to profitability is much harder.
Brands now need an additional foundational pillar: great direct-to-consumer marketing. Sorry to say, that’s a whole other set of skills.
The communication strategy has to be unique. If a brand copies another brand’s mode, it’s a lot less likely to break through the noise.
But when I say that to brands I am often met with a puzzled look. So here’s what I mean.
Get Joy
Get Joy is a pet food brand. Although growth has topped out or is declining in many pet food categories, Get Joy benefits from selling freeze-dried raw food which is one of the highest-growing categories in the pet universe right now.
Get Joy partnered with Dan Buettner, an author, explorer and researcher who has won three Emmy awards for his programs on human longevity.
Together, Buettner and Get Joy produced a series on YouTube entitled Aging on Paws that capitalizes on several trends that are very popular with consumers right now:
- Longevity
- Humanization of pets – By using a recognized researcher of human longevity to focus on dogs, the program benefits from the trend of treating pets like family members.
- High-quality dog food – the highest-income households are now spending more on freeze-dried dog food, one of the few areas in the pet industry that is still growing rapidly.
- YouTube – Ok, YouTube has been around for ages but it is the one medium that a majority of Gen Z gets its pet marketing information from. (No other age cohort gets a majority of its pet marketing from any other single channel.)
- Short-form video – Many brands are finding that engagement with brands is highly correlated with entertaining short-form video series.
By combining all these trends, Get Joy benefits from engaging, relevant content that gives it legitimacy and authenticity.
That unique combination of attributes drives sales without spending a billion dollars on Facebook and Instagram.
Thalia
Thalia is the leading omni-channel bookseller in the German-speaking world. Using software from a company called Decommerce, Thalia created the “Booklovers Society.” The first stage of the program allowed customers interested in Young Adult books in English and romantic novels to:
- Recommend new books by tagging them
- Post book reviews
- Invite friends to join the community
- Participate in surveys
- Earn badges through contributions to the community
These activities personalized the shopping experience and created an affiliation for users based on what they love doing. The email open rate of program is 95% (I don’t think my friends open my emails as frequently as that). Hendrik Muller, Director of ecommerce at Thalia called the program “very successful” and plans to further integrate it and scale up the community.
Why This Works
What these two strategies have in common is that:
- They are highly specific to the products and services of the companies that created them.
- They amplify the characteristics that consumers want: connection and authenticity, and in the case of Pet Joy, the interests of their consumers in longevity, humanization of pets and short-form video.
- They create more engagement and get more mindshare from consumers which inevitably leads to revenue and growth.
- They are targeted at the consumers most likely to be interested in what the company has to offer.
These programs are very specific, very targeted and not overly expensive and that’s why they work.
Brands now need an additional internal communications infrastructure and it has to be part of the culture. It’s not the public relations and marketing of the past, it’s a way to convey to consumers directly what’s relevant about a brand.
The communications has to be engaging to consumers, it has to interest them enough to spend time with it. Get Joy gets you to watch YouTube videos that involve its brand. Thalia gets you to spend time on what is effectively its own social media site. It’s very specific to each company. It’s relevant, real and authentic.
The marketing creates ideas that connect to what consumers are interested in at the moment. It’s not a department that services other parts of a brand. When a product is created and designed, it needs a marketing strategy that’s built-in and not grafted on.
If it can’t be communicated to the consumer in a genuine way, it won’t sell no matter how great the product is.
It means that a new kind of talent and skill set is needed in companies that historically only focused on product and that’s a change in culture which is so hard to accmplish. It means that there are now more ways to fail and the risk of building a brand is greater.
Brands have now become retailers and there’s no going back. To succeed, they need most of the skills that retailers have and that is a hard transformation. We are seeing some companies do it, the programs at Get Joy and Thalia are examples of how new programs can change the relationship with consumers.
As consumers look to brands for more meaningful and personal relationships, it will be common for consumers to create deeper associations to successful brands. Those relationships are how brands will get around high customer acquisition costs and avoid customer churn.
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