Have you ever bought someone a gift, like a sweater, and it’s not your style? However, you receive many emails with pictures of her in different colors and similar items that you will never wear. When a company spends a lot of money to analyze what you’re doing online but doesn’t know what you’re interested in, that’s a customer problem, said Katrina Wong, VP of marketing at technology company Twilio.
Digital customer engagement is creating business for brands looking to build direct relationships with customers. But due to the economic downturn and budget cuts, some companies are deciding to spend time and energy on retaining customers, not on acquiring new customers.
The 2022 Twilio Segment Growth Report found that 93% of marketing and customer experience leaders surveyed said their companies are beginning to prepare for a recession. And 67% said their companies prioritize retaining existing customers over acquiring new ones. 1,300 respondents work for B2B companies in the US and UK
“Customer acquisitions cost less than the average customer acquisition cost (CAC
He said: “In times of trouble, you have a lot of money.” “So, you can go out and buy clients and spend money. And if you lose a client, because you don’t have the right relationship, you can use the next dollar to get them back.”
If you’re texting Uber, Twilio is behind it. Twilio Segment is a customer data platform (CDP) that provides a single source of customer data for any channel and creates a customer profile. Companies can use this to communicate with them via email and SMS. Or link to marketing tools. For example, guitar manufacturer Fender uses CDP to create customer profiles by collecting activity data from its website, mobile apps, and servers, and pulling data from cloud apps and internal records. Fender Play’s music education program cut 29% of customer costs, according to Twilio.
Getting to know your customer
How do you build relationships with existing customers to improve LTV? By making sure you’re getting the right message to the right customer, at the right time, and knowing their preferences along the way, Wong says. An example? If a customer buys a pair of shoes online, the next step is to suggest an item of clothing that would go well with the shoes, he explains. Wrong message? “I buy shoes and they follow me online wherever I go,” he says. “So, I get an email that recommends the shoes I just bought.”
Companies need to understand their customers, he says. Otherwise, the holiday gift you buy your loved one this year will cost you dearly. “I gave him a shave last year for Christmas, and I still get all the ideas about all their products,” Wong said. “I’m like, ‘Oh, I’m not the right customer for these ads and commercials.’
In these economic times, “what we’re seeing is success and profitability are the new North Stars for all businesses in all industries,” says Wong. “If you can understand what drives the customer lifecycle, that’s the key to good ROI [return on investment] and grow well.”
However in preparation for the recession, “Our [marketing] The budget is going down, isn’t it? ” Wong says. “This is normal. Therefore, we are expected to do more with less…The new move for marketers and CMOs is to use CDP, to improve sales performance,” he says. The survey found that 83% of respondents plan to simplify their sales technology within the next 12 months.
CFOs who focus on KPIs such as CAC and LTV are seen as more important than long-term KPIs. “The idea of the legacy of some KPIs, sales and profitability, yes, we will keep it,” Michael Schrage, a researcher at the MIT Sloan School Initiative on the Digital Economy, said on About Fortune A new CFO event last month. “But the way the finance people, the marketing team, the HR team have to be together and collaborate on KPIs has to change a lot.” Employee experience, customer experience, and customer lifetime value are among the upcoming KPIs, he said.
Keeping the customer at the center of the business process is not uncommon. But the way you deal with tech and data has changed.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
A big thing
Morgan Stanley’s E-Trade released data from its monthly share survey. The top three sectors in October and November were consumer goods (non-essential goods and services, such as automobiles and entertainment), energy, and materials. The results are based on the number of clients buying/selling stocks that own shares of the S&P 500. Between October and November, the energy sector rose from 2.95% to 10.02% and the materials sector from 4.55% to 7.73%. The discretionary consumer share remained at around 14%.
Courtesy of Morgan Stanley’s E-Trade
Going deeper
Here are a few readings for the week:
BlackRock’s Larry Fink predicts that many crypto companies will fold after the collapse of FTX—but it won’t be the end of DeFi and Sophie Mellor.
11 Bulletproof Stocks to Buy in 2023 by Anne Sraders and Scott DeCarlo
The best financial strategies for surviving a recession in 2023 from three top advisors Matthew Heimer
Mindfulness app Calm has partnered with the US Surgeon General on a new series to ease your year-end stress by Jennifer Fields.
Board
Here is a list of popular trends this week:
Carrie Wheeler was promoted from CFO to CEO of Opendoor Technologies Inc. (Nasdaq: OPEN), an e-commerce platform for residential real estate. Eric Wu, the current CEO, will transition to the position of president of the market, effective immediately. Wheeler served as Opendoor’s CFO for the past two years and as a member of the company’s board prior to that. He has financial experience with 25 years of private practice and board experience.
Amy O’Keefe, CFO at WW International, Inc. (Nasdaq: WW) (WeightWatchers), is stepping down effective Dec. 2. O’Keefe will remain employed by the company through Dec. 31. to support the financial team for the rest of the year. Heather Stark will be the chief financial officer. Stark has been with WeightWatchers for 12 years, most recently as chief financial officer for North America.
Niall Byrne was named CFO at the Qatar Investment Authority (QIA). Byrne joins QIA from JP Morgan Asset Management where he served as chief operating officer and CFO of global fixed income, investments, and assets. With nearly 30 years in the industry, Niall previously held various global roles at JP Morgan Chase.
Angela Korch was named EVP and CFO at Vail Resorts, Inc. (NYSE: MTN), employees on Dec. 22. Korch rejoins Vail Resorts from CorePower Yoga, where he served as CFO since May 2020. He first joined Vail Resorts in 2010 and has held various leadership roles. positions, including VP of corporate finance and mountains. Prior to Vail Resorts, Korch was a public relations consultant at Muzinich & Company.
Andrew Page, CFO at Foot Locker, Inc. (NYSE: FL), is stepping down from his position to pursue other opportunities. The site will retire after the company’s quarterly earnings report in 2022. Foot Locker is working with a recruiting firm to identify his successor.
Stephen Dorton has resigned as CFO at Enfusion, Inc. (NYSE: ENFN), a provider of cloud-based financial management software, operating Jan. 6. Dorton will pursue other job opportunities. Enfusion is looking for a new CFO. The board of directors has started discussions with several CFO candidates, according to the company.
Mark Hall was named CFO at Smithfield Foods, Inc., an American food company, effective Jan. 1. Glenn Nunziata, CFO for the past seven years, will leave the company at the end of the year. Hall joined Smithfield in 2014 as vice president of finance for John Morrell Food Group. In 2015, he was promoted to VP of finance for Smithfield Packaged Meats. In 2019, he was promoted to SVP of finance. Hall assumed his role as EVP of finance at the end of 2020.
It’s clear
“Some people will be allowed to go. We’re making the fewest cuts in the world. In most businesses, that’s what you do after years of growth.”
– Morgan Stanley CEO James Gorman said on Thursday at a Reuters NEXT conference that the company is cutting jobs worldwide without specifying how much, Reuters reported.
