Companies will have to rethink customer engagement strategies: Rajesh Jain
Rajesh Jain, Founder & Managing Director, Netcore Solutions, talks about the upcoming MarTech trends and how companies can best leverage them
A serial technology entrepreneur, Rajesh Jain, Founder and Managing Director, Netcore Solutions is a thought leader in the MarTech space and has successfully led and driven the company through 20 years with innovative ideas and business solutions.
In a free-wheeling chat, he talks about the upcoming MarTech trends and how companies can best leverage them
Rajesh Jain’s idea of creating differentiated experiences for your best customers through ‘Velvet Rope Marketing’ and creating ‘Proficorns’ rather than ‘Unicorns’ are concepts that companies can adopt in these difficult and uncertain times to ensure profitable business. The Founder & Managing Director of Netcore Solutions is clear that this is the best time for a CMO to adapt and become a Chief Profitability Officer using marketing technologies on the existing customer base.
Here are some edited excerpts:
How are we looking at the MarTech scenario right now post the outbreak of COVID-19 pandemic and how do you think companies will have to pivot themselves for the future?
In the short term, of course, a lot of companies get hit because the volume of transactions will go down. But I think once the recovery process starts, we are going to see a much more rapid shift to Digital. Even companies which have been operating offline will have to work out a digital model. Some of the factors we are seeing emerging from the current situation like social distancing, lower-income and less discretionary expenditure are going to stay for much longer. Secondly, brands will have to position themselves as being an essential brand and not a discretionary one and will have to look at a digital way to engage with customers. We will have to think of this more like a third world war. It may sound scary, but the economic consequences are going to be really significant. Companies are going to have to rethink how they engage with customer and their core business models.
Any particular business model you see coming out of this situation? Any particular segment within the MarTech space you see getting more traction out of this?
I think one important shift, which even otherwise was going to happen, and has been accelerated due to the current situation is the shift from AdTech to MarTech. AdTech is about customer acquisition, while MarTech is about customer engagement. In these times, one of the first budgets to reduce is new customer acquisition. Rather than spending money on acquiring new customers, companies are going to focus on the ones they already have. In about 18-20 months, there will be the shift away from third-party cookies, which Google has said it will eliminate. So it is important for companies to build up first-party relationships as they go forward.
Also, generally, companies focus on ‘median’ customer marketing. They don’t tell you to separate customers based on Customer Lifetime Value (CLV) segments which are there. There is a tendency to protect customer churning. But when marketing budgets get minimised, the key idea will be to focus on your best customers and create a differentiated experience for them, which I call Velvet Rope Marketing (VRM). This means to segment customers by lifetime value based on Recency, Frequency and Monetary (RFM) value, taking the top 20% customers and deepening engagement with them by creating an amazing experience, the way they do in airline check-in counters, first-class and business class, etc. Also, VRM is much more than a loyalty program. In a loyalty program, anyone can sign-up and collect points. In a VRM program, it is the brand that decides which customers are eligible for the differentiated experience. That is the shift which marketers will need to look at doing.
The MarTech space is very competitive in India. Also, there is a huge presence of international companies. How and where do you position Netcore?
Our edge comes from the fact that we have a full stack of MarTech services. Over time, marketers and enterprises will need to limit the number of vendors they deal with because every additional vendor means an additional integration point and sharing company data with someone else. Also, now there is a big risk that companies could go bankrupt or run out of funds. A lot of start-ups in the next 12 months are going to face severe challenges. Also, there is a cost of doing integration across multiple different technology components in the stack. At Netcore, we build full-stack marketing automation, including owning the channels of delivery, automation and analytics built into the system and then AI and ML, personalisation and CSM. That Netcore is in a strong position financially will help us differentiate even more. Companies get caught up in trying to reduce staff and cost, which inevitably hamper their customer relationships. Our core belief is that done right, marketers can actually be profit drivers of the companies at these times. The CMO should actually become the Chief Profitability Officer at these times, and use new technologies on existing customers and generate profits.
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