Why Omni-channel Personalization Is the Future of Marketing


All customers want a unique, personalized experience, irrespective of how they interact with a brand – be it in-store, on an app, via a website, or wherever. With the prevalence of mobile and connected devices which give marketers access to vast customer data, and technologies such as analytics and machine learning, it is increasingly possible for companies to offer omni-channel personalization. But marketers also need to focus on identifying their “best customers,” instead of spreading their resources thin, says Rajesh Jain, founder and managing director of Netcore, a global marketing technology firm.

Jain defines “best customers” as those who “spend more, stay longer with you and spread your message more.” These customers, says Jain, have the greatest lifetime value for a company. In a conversation with Knowledge@Wharton, Jain talks about how technology is shaping and transforming the future of marketing.

Below is an edited version of the interview.

Knowledge@Wharton: Last year, McKinsey published a report that said advances in technology, data and analytics will soon allow marketers to create more personal and “human” experiences across moments, channels and buying stages. When you think about what’s happening in the world of martech or technology-driven marketing, how far has the promise of personalization been realized?

Rajesh Jain: I think we are at the early stages. The end game is omni-channel personalization and it will take us some time to get there. The drivers are that everyone has devices — and whether it’s a computer or a mobile phone, these devices are connected. There’s a lot of data that these devices are generating. Every click that you do on a site, every action that you take on an app, is being recorded somewhere. This is helping lay the foundation for digital customers and digital companies. The disruption in the world of marketing has been brought about not by traditional companies but by digital-first companies — either mobile-first or app-first companies.

There is also the world of ad-tech, where companies use Google, Facebook, etc., for customer acquisition. My belief is that as we go along, budgets will shift from adtech to martech. Adtech is about acquisition. Martech is about customer engagement, customer retention, development, and maximizing customer lifetime value. There are only so many customers you can acquire in the world. You also have to maximize value from each of these customers. So that’s the first point — that budgets will shift.

The second issue is that in doing so, companies are going to recognize that not all customers are equal. The work being done by Wharton’s Peter Fader around customer centricity and the best customers is critical. You need to focus on a certain set of customers who are your best customers, who have the largest lifetime value. For me, the “best customers” are those who spend more, stay longer and also spread your message more. They have the greatest lifetime value, so you want to concentrate on them.

How do you do that? That is where martech comes in. What these customers want is omni-channel personalization — whether they interact via a website, an app, email, SMS, in-store and so on. They want to be treated uniquely. That’s where brands can use the entire data stream, those digital footprints that their customers are leaving. You can use machine learning and algorithms to predict what future action the customer is likely to take, what is the next best action the customer should be prodded towards. That’s the world of personalization that is coming up.

“Every click that you do on a site, every action that you take on an app, is being recorded somewhere. This is helping lay the foundation for digital customers and digital companies.”

Knowledge@Wharton: There is a lot of buzz about artificial intelligence and related technologies. Do you see AI starting to make an impact on marketing and building customer engagement? Where do you see the greatest promise and potential in redefining customer journeys?

Jain: The potential in terms of machine learning in mar-tech will be around the next best action – for example, using historical data to predict what the customer is likely to do next. In other words, what is the next best action that is most beneficial from a company’s standpoint? It could be just a marketing message, but then how do you send the message? What content should be sent out? What is the right time to send the message out?

At Netcore, for example, when we send out emails to our customers, we use machine learning to optimize the send time. Machine learning figures out when you open your emails. The likelihood that you will act on an email is higher if the marketing message from the brand comes to you in that window when you are likely to see emails. This is different for every user. Humans cannot do this at scale, but machines can. Machines tend to learn. If you change your behavior, it learns from what you are doing — be it subject line optimization or the right channel to interact with you. All of us have a preference. Some prefer emails while others may like app notifications.

The whole objective is to create a unique experience for each customer. And that, in the customer journeys, can only be done at scale if it’s fully automated. It can either be rule-based, which becomes somewhat limiting as we go ahead, or machine learning-based, which becomes better every day.

Knowledge@Wharton: What are some of the most interesting developments you’ve seen in the use of technology and data and analytics for marketing, and what is still a distant dream?

Jain: The ability for a brand to communicate at scale with a large customer base is something that was not there earlier. Brands knew very little about their customers. Now, because of digital devices, there’s a unique handle. There’s an email id or a mobile number that’s typically available for clients. That becomes the way they can start learning a lot more about the customer. As devices become more common, the costs for things like processing compute power, the computational complexity, have dropped dramatically. Now it becomes possible to do this at scale.

“The potential in terms of machine learning in martech will be around ‘next best action’.”

What should be the goal of marketing? What would I as a CMO love to do? I’d love to maximize the lifetime value of my customers, which means I need to identify from my current set, from my current cohort, who are my best customers. How can I get them to spend more? How can I engage with them more? Earlier, it was very difficult to do this. Every person was treated pretty much the same. The next question is: What are the characteristics of my best customers? How can I go out and acquire more such customers? A marketer now has the ability to almost craft the perfect company, the perfect organization, with a customer base of the best customers.

It’s a very exciting world. I think we are still at the early stages of this world. Google and Facebook have transformed the world of customer acquisition through adtech — being able to pinpoint our needs and then get the right targeted ads delivered to us through multiple channels. The same, I believe, is going to happen in the world of martech, but this time it’s the brand engaging with the customer, creating a direct relationship. That’s the opportunity for the future. That’s how marketing is going to evolve into this omni-channel, personalization future.

Knowledge@Wharton: There has been a greater push to digitize physical spaces through AI-enabled tools such as facial recognition. At the same time, there has also been a backlash against facial recognition on the grounds that such technologies violate privacy. How will this debate play out?

Jain: You have to follow the money. For example, you walk into a store. The store has no idea whether you’re in the top 10 percentile or in the bottom 10 percentile of customers. If you walk into a store and by doing face recognition you can get a differentiated experience — you get a shopping assistant to come and help you if you are in the top percentile — you will love that experience. You will not mind your face being recognized at places like this. Or take airline boarding. Someone was telling me recently that in China, they recognize your face and then tell you exactly where your boarding gate is, which direction you need to go into. This is how a lot of these technologies will be used.

The question is, what are the limits on this? At a protest, is it right to use face recognition to identify people — there are cameras now everywhere — and then take targeted action against some of these protestors? Society will have to address these questions. They will need to have limits put on this. But in the world of marketing, as long as customers feel that they are benefiting from personalized experiences through the use of new technologies like facial recognition, I think these are inevitable.

Knowledge@Wharton: You referred to Peter Fader and his work on customer centricity and the need for companies to focus on their most profitable customers. To what extent do you see marketing companies doing this today? Could they be doing anything that they’re not doing today to attract and retain their best customers?

Jain: A lot of the focus today in companies tends to still be largely on customer acquisition, probably because those are the metrics that investors are asking for. It’s an arms race for new customer acquisition. Not much attention is being paid, I think, to the cost of new customer acquisition. And as long as startups, the unicorns [or companies valued at more than $1 billion] and others have easy access to money, it’s going to be a race for just acquiring new customers.

This needs to change. Investors and company management — the CFOs — need to start asking: “What is the worth of each of these customers? What is the lifetime value of each of these customers? Why are we acquiring customers that are likely to cause us to lose money?”

There is a book by Sunil Gupta from Harvard on driving digital strategy. One of the points he makes is the 20/200 rule. Twenty percent of your customers account for 200% of your profits, which means there are probably a lot of customers who are actually causing you to lose money. That may not matter today, but at some point in time it will. Companies will start realizing that all customers are not equal and that they need to start analyzing their segments and figure out which customers they should go after. Which are the types of customers they need to attract and engage?

“As long as customers feel that they are benefiting from personalized experiences using new technologies like facial recognition, I think these are inevitable.”

Knowledge@Wharton: What are you and your colleagues in Netcore doing in martech? What lessons have you learned through your experiences that could benefit marketing executives in other companies?

Jain: Netcore is Asia’s largest email marketing and marketing automation platform. We have multiple products and hundreds of customers in India and Southeast Asia. Most of the largest companies across sectors — BFSI, e-commerce, travel, OTT platforms, app-based video-streaming platforms — use our products.

The way we’ve built our stack is that you start with multiple channels — email, SMS, app notifications, and so on. Brands can use our platform to send out messages across multiple channels. We also have a product called SmartTech, which lets brands automate these customer journeys. The whole idea is about intelligent communication and engagement that needs to get done, and this is where analytics and machine learning come into play.

The third aspect of what we do is personalization. In late 2019 we acquired a company called Boxx.ai, which does incredibly powerful, personalized experiences for customers. It can give a 10% lift on revenue in multiple categories like e-commerce, travel, and OTT (over the top) media within a month. It analyzes customer data, showing you a different set of products and me a different set of products, because we are different. Just this action can help lift revenue for brands. Our dream is to help companies manufacture best customers through intelligent automation, intelligent personalization, and intelligent communications.

Knowledge@Wharton: Netcore is headquartered in India, but in recent years you have been expanding in other parts of the world, including the U.S. Could you tell us about your global journey? Where are you doing your most innovative and instructive experiments?

Jain: We started as an Indian company more than 20 years ago. We have had a dominant position for many of our products in India. A few years ago, we decided that we needed to go beyond India. We first looked at Southeast Asia, and we’ve had good success there. Countries like Indonesia, Malaysia, Philippines and Vietnam are growing very rapidly. Some of them have large populations with consumers interacting on mobile phone apps and mobile devices. Those markets have very similar characteristics to Indian customers.

Over the last year, we’ve commenced operations in the U.S. Our proposition to companies here is that we have a full stack solution. We are probably one of the few companies globally that can do communications, automation, and personalization in a single stack. In many cases, we also take up KPIs [key performance indicators] with the CMOs and their teams to ensure that outcomes are delivered. So it’s not just the use of technology. There are clear deliverables.

Knowledge@Wharton: What does your roadmap look like for the next three to five years?

Jain: I’ll answer the question in two parts. From a technology standpoint, the way we’ve built out Netcore is essentially having the engineering in India. There are very strong engineering capabilities to build out the whole B2C martech stack. And that part continues. In the next three to five years, we see a lot of machine learning coming in to make the job of the marketer much simpler. For example, being able to automatically identify best customers, being able to suggest what communications should go to these customers. Marketers are not doing many of these things at present. The platforms are of course complex to use but over time machine learning will help make many of these tasks easier. So that’s the first track. How do we transform marketing? How can you ensure that you develop a powerful relationship with the customer and that increasingly, a greater number of your customers become “best customers?”

The second track is around how we’ve architected the company. The word I like to use is “profi-corn.” Many of the unicorns have been burning a lot of cash. I felt we needed something new, a new way to build companies, the way we have built Netcore over the last 20 years.

A profi-corn has four characteristics. It’s profitable. It is private. It’s bootstrapped — there is no external capital, which ensures that the focus is on employees and customers, and not investors. And it has a baseline valuation — let’s say $100 million. Unicorns have a billion-dollar valuation, but the founding team is probably left with less than 10% of it. So if it’s $100 million (for profi-corns), and the founding team and the employees own 100%, it’s almost the same thing.

At Netcore, we’ve always looked at profitable growth, focusing on both profits and growth. One without the other doesn’t work. The second is a long-term mindset. It’s what Simon Sinek in his new book calls the “infinite mindset.” While you have to worry about what you’re going to do in the next quarter, in the next six months or year, there’s no finish line in business. It’s an infinite game that you are playing. So how do you think about the longer term?

And the third element is extreme employee centricity. At Netcore, we instituted ESOP – an employee stock option program — almost 10 to 12 years ago; today employees own some 25% of Netcore. With the profits we had accumulated through the years, we did a stock buy-back recently. The earliest employees — some are no longer with us — got 250 times return on their investment, on their stock. It gives us great joy that we can make this happen. Over time, I would like to list Netcore in the public markets. But for the next few years, the priority is to keep the profitability baseline and re-invest surplus earnings back into the company. It’s a great time to make the right bets for the next three to five years. Keeping the foundation is critical — long-term thinking, profitable growth, and employee centricity.

“Profi-corns are sort of like unicorns – they are rare sightings.”

Knowledge@Wharton: The “profi-corn” is a great concept. Can India produce multi-billion-dollar global companies as, say, China has been, using the model of the profi-corn?

Jain: Profi-corns are sort of like unicorns – they are rare sightings. But I think there is a great opportunity for Indian companies to become large, multi-billion-dollar global organizations. The first generation was in IT services — companies like Infosys, Tata Consultancy Services (TCS), Wipro, HCL and many others. We are seeing a similar trend now in the world of SaaS, software as a service, cloud-based companies coming out of India and targeting customers in the U.S. For instance, Zoho, Freshworks, Chargebee, and CloudCherry. These companies are very successful at using new age marketing techniques in the B2B world, using lead generation from India through SDRs [sales development representatives], in-bound marketing, account-based marketing, and so on. With a small team of front-end account executives in the U.S. and product engineering in India, they are able to take on market leaders in the U.S. in different categories with aggressive price-value combinations.

Knowledge@Wharton: Many international publications in recent months have focused on the troubles of the Indian economy. What do you think India can do to counter the slow-down?

Jain: When you look back, it’s clear that the slowdown has happened because of multiple reasons. These include the banking crisis, demonetization, GST [goods and services tax], problems with the NBFCs [non-banking financial companies]. A lot of these things have come together and they have started impacting consumer spending in India. All the pillars of growth are now under threat.

About a year-and-a-half ago, I put together an idea called Dhan Vapasi, which means wealth return. This is perhaps the most powerful idea to counter what we are seeing in India. The idea has two parts. The first part is public asset monetization. It is amazing to know that the Indian government controls assets worth $20 trillion. This is locked up in minerals, land, and public sector undertakings. When I say “land,” there are a lot of land parcels across the country in large cities, which are lying disused, unused, in many cases abused. Public sector undertakings — where the government has no business being in — is still a very large and growing sector in India.

Our idea was that you can start monetizing all these assets…bring out all the idle land or idle assets into circulation. As we start generating money from these assets, the idea should be to return it to the people. This is the people’s wealth. The government only controls these assets. It’s the people who are the owners. To counter the slowdown on the demand side, our proposal was that every Indian family can be given back Rs. 100,000 (approximately $1,400) every year. This effectively doubles the median income of a family in India. As they start spending, it starts the virtual cycle of consumption, manufacturing and job creation. I think if the government can do this it will put Indians on an irreversible path to prosperity. Do it for 10, 20, 30 years — that’s the kind of wealth which is locked up in India. That’s how you can replicate the Chinese success. You can pull out a few hundred million people from poverty in the next 10 years.

Knowledge@Wharton: Assuming that this is done, and it allows India to put her citizens on the path to prosperity, as you said, who will take the lead in making this happen?

Jain: There are two parts. One, the current government is a natural first decision-maker. The current government and the bureaucrats need to think about this idea seriously and make it happen. We have done all the groundwork. We have created a Bill, which we have sent to all Members of Parliament. The second part is a bottom-up demand from people. Look at what’s happening right now — the handouts, the subsidies, and the welfare schemes are not really doing the job. They are not creating enough wealth. They are not creating enough jobs. They are not creating enough opportunities. They are stifling people’s futures. But that’s a harder problem. You’ve got to change mindsets. You’ve got to get them to understand the real problem. The fastest way is for people in power to realize that this is how we can put India on a fast track to prosperity.

Knowledge@Wharton: To end, let us return to the topic with which we began, the future of marketing. If you had a platform to address chief marketing officers and CEOs, what would you tell them about which areas they should pay the most attention to in the next few years?

Jain: Identify and engage with your best customers. That is the differentiated proposition that a company can create. That is the way to create valuation for their own businesses and incredible value for customers via omni-channel personalization. You can’t deliver that to every customer of yours. So focus on your best customers and give them omni-channel personalization.

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