My Take On: Why brands need to plug the leaky bucket and curb media spend
Jamie Hinton, founder of Sheffield-based technology firm Razor, argues that brands need to address the leaks in their technology before turning up the dial on ad spend.
Customer acquisition seems to be the dilemma of our age. Most business owners will recognise the scenario: we’re bombarded with requests for additional spend, in order to top-up our new business lists. But many businesses aren’t addressing the fundamentals first, and sometimes even neglecting the needs of the customers they already have.
Here’s a conversation we have with companies on a regular basis:
Us: How’s the new business pipeline?
Them: Great! We’ve got loads of new leads. Our business development team are going great guns!
Us: That’s great. How is business in general?
Them: So, so. Turnover is pretty static.
So it begs the question, how can we retain the customers we have, whilst generating new business? We call this the ‘leaky bucket’ effect.
So much effort can be put into attaining new clients that the (often simple) steps aren’t being taken to ensure there’s no leakage. Businesses can be sucked into spending vast sums of money on media, pouring more into the top of the bucket, rather than repairing the holes. The analogy is one that resonates with businesses, as it can lead to a streamlining of ad-spend, greater efficiency and a better product offer.
In this digital age, the time has now come for businesses of all sizes to take their digital infrastructure seriously. By ‘fixing the holes in the bucket’ that manifest themselves as things like insecure systems, poor digital experience, slow software or lack of customer data analysis, businesses can achieve a significant reduction in above the line spend.
These holes need to be fixed to realise commercial goals. Research suggests that just a one-second delay in a page can result in a 7% reduction in conversions, whilst 40% of people abandon a website that takes more than three seconds to load. No amount of ad spend will reverse these fundamentals.
Increasingly, we live in a world of churn. Businesses are bombarded with information from every angle: offers, incentives, kickbacks and (often unsustainable) deals. You could be forgiven for thinking that the days of long-term client relationships are over.
Technology has an increasingly important role in making sure that isn’t true. As a case in point, most businesses these days hold a huge amount of customer data, but simply don’t use it to its full effect. Using this intelligence to better effect can result in personalisation (customers no longer want to be thought of as just a number), integrated systems and increased automation. The output on offer is a better customer experience and better business performance, making the investment a no-brainer.
Good agencies shouldn’t fear the embrace of technology, as it should be there to complement a progressive and streamlined campaign, with clear benefit for their clients. Marketing and advertising has always been a collaborative effort, and fixing the holes in the bucket should be a natural extension of that.