How some brands are lowering customer acquisition costs

The cost of marketing to consumers has become astronomical. It prevents many businesses 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 issue is so important now because brands historically focused on making great products and retailers did the marketing to consumers. But now, multi-brand retail is weaker by the day, and brands have to find their own way to get 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 money selling things. But now the cost of that marketing has exploded and it’s much harder to break even.

Brands now need an additional mainstay: great direct-to-consumer marketing. Sorry to say, it’s a whole different skill set.

The communication strategy must be unique. If a brand copies another brand’s state, it is much less likely to break through the noise.

But when I say that to brands, I’m often met with a puzzled look. So here’s what I mean.

Get Joy

Get Joy is a pet food brand. Although growth has peaked 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 partners with Dan Buettner, an author, explorer and researcher who has won three Emmy Awards for his programs on the human lifespan.

Together, Buettner and Get Joy produced a series on YouTube titled Aging on Paws that taps into several trends that are very popular with consumers right now:

• Long service life
• Humanizing Pets – By using a renowned human lifespan researcher to focus on dogs, the program capitalizes on the trend to treat pets as members of the family.
• High-quality dog ​​food – the highest income households are now spending more on freeze-dried dog food, one of the few areas of the pet industry that is still growing rapidly.
• YouTube – Okay, YouTube has been around for ages, but it’s the only medium that the majority of Gen Z get their pet marketing information from. (No other age cohort gets the majority of its pet marketing from any other single channel.)
• Short-Form Video – Many brands find that engagement with brands is highly correlated with entertaining short-form video series.

Combining all these trends, Get Joy benefits from engaging, relevant content that gives it legitimacy and authenticity.

The unique combination of attributes drives sales without spending a billion dollars on Facebook and Instagram.

Thalia

Thalia is the leading omni-channel book retailer in the German-speaking world. Using software from a company called Decommerce, Thalia created the “Booklovers Society”. The first phase of the program allowed customers interested in young adult books in English and romance 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 a connection with users based on what they love to do. The email open rate for the program is 95% (I don’t think my friends open my emails that often). Hendrik Muller, director of e-commerce at Thalia called the program “very successful” and plans to integrate it further and scale up the community.

Why this works

Common to these two strategies is that:

• They are very specific to the products and services of the companies that created them.
• They reinforce the attributes that consumers want: connection and authenticity, and in the case of Pet Joy, their consumers’ interests in longevity, pet humanization and short-format video.
• They create more engagement and gain more mindshare from consumers, which inevitably leads to revenue and growth.
• They are targeted at the consumers who are most likely to be interested in what the company has to offer.

These programs are very specific, very targeted and not too expensive, which is why they work.

Brands now need an additional internal communication infrastructure, and it must be part of the culture. It is not the public relations and marketing of the past, it is a way of communicating directly to consumers what is relevant about a brand.

The communication must be engaging for consumers, it must interest them enough to spend time with it. Get Joy makes you watch YouTube videos involving its brand. Thalia makes you spend time on what is effectively its own social media. It is very specific to each company. It is relevant, genuine and authentic.

Marketing creates ideas that connect to what consumers are interested in at the moment. It is not a department that services other parts of a brand. Once a product is created and designed, it needs a marketing strategy that is built in, 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.

This means that a new kind of talent and skills are needed in companies that have historically only focused on products, and this is a culture change that is so difficult to achieve. This 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 is no going back. To succeed, they need most of the skills that retailers have, and it’s a tough transformation. We see some companies doing 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 form deeper associations with successful brands. These relationships are how brands will avoid high customer acquisition costs and avoid churn.