Are you paycheck to paycheck?
60% of Americans live paycheck to paycheck. There’s a good chance that if you’re not living it now, you’ve lived it at some point. So you know what it feels like to have that nagging thought eating away at you. You know what it feels like to have that bit of uncertainty too frequently at the end of the month—it’s not quite an emergency, but it’s certainly uncomfortable. You’re looking for something long-term, stable … something to grow on. Something concrete.
When you live paycheck to paycheck, you’re vulnerable to macroeconomic events in a way that leaves you unable to build the foundation you want. Now for a quick thought experiment:
What’s worse? Living in this scenario and knowing? As the weeks and months pile up, you realize you’re not exactly getting ahead or building anything stable. Or living it and just not knowing? You just go through life until, one day, a recession or pandemic hits, and you suddenly realize the dire nature of your situation. Call me a worrier, but I’d rather know. It’s tough to build a moat when you don’t even realize you need one, right?
In my experience reviewing retention programs (read email and SMS), a vast majority of them are “living paycheck to paycheck” without even realizing it. Daily campaigns and automations, and even some split testing thrown into the mix, won’t get you out of the financial tailspin. In my opinion, the dollars collected from outgoing messages are worth only 40% of the true value of the messages. You send an email or SMS, you see a spike in store revenue for the day, and then move on to the next. So you’re collecting a paycheck, and then quickly working to collect the next one—over and over, until the next crisis hits and shakes everything up again.
We can do better, I know I can do better, so let’s work to correct this right here, right now!
The Financial Instability of "Paycheck to Paycheck" Marketing
Alright, so it’s Thursday morning, and sales just aren’t what you’d expected from the weekend. You’ve already sent an email campaign on Tuesday and an SMS yesterday, and you’re plotting your next move. Maybe you’re a solopreneur staring down your email list, trying to decide if it’s worth the effort to milk some more $$ with another shoehorned campaign, Or you’re a marketing manager with Slack notifications pending from your director, expecting your ideas on how to “boost sales ahead of the weekend” because we always seem to be “heading into the slow season.”
This sucks. You’re stuck. No good options here. And then it hits you. This is the moment when you realize that you’ve been here before, and you’ve had this negotiation in your head before. It’s like opening an AT&T bill and thinking, “I just need like three more days until payday, and then I can pay this.” You’ve been living paycheck to paycheck so long that you don’t even realize it anymore; it’s become normal. So you open up Canva and get to work on designing another “paycheck”, hoping it’s worth as much as the last one was.
Does it bug you a little bit in the back of your mind? You tell yourself you have your email & SMS list, but do you really? How many are engaged? What are their preferences? What’s the most valuable message you can send to them next?
It’s time to start answering these questions and building up some security around your retention program. The topics we hit on in this series will be focused on the long-term investment but will also help with the short-term “paycheck” side of things. When thinking long term, if, in your heart of hearts, you believe that Bitcoin is the most valuable asset to HODL for the next 50 or 100 years, then use Bitcoin as your metaphor here. But I’ll go a more traditional route and say that today we are focusing on the 401K of your email and SMS program: Personalization (surprise!)
The Case for Investment Strategies in Marketing
Look, you don’t have a choice in most of what happens out there. There wasn’t a vote on COVID popping up before it did its thing and shut down the economy. And nobody held a meeting ahead of the dotcom bubble burst. Shit happens, and then you find out just how prepared you are. In the world of financial planning, you’re looking to create an optimal mixture of income, short-term investments, and long-term investments. I don’t know what your ideal mixture is, but there is one. Some folks don’t need any short-term investments and are happy riding out VTSAX forever, and that’s great. It’s your thing, do what you wanna do. It largely depends on your personal goals, and I encourage you to figure that out on your own; I can’t tell ya who to sock it to. But I can tell you that you need some long-term investments in the mix, and I don’t think that’s a controversial stance to take.
In the landscape of retention marketing, you’ve got a few avenues to grow value over time. We’ve discussed the paycheck bucket (money coming in from messages delivered today). The next category I’ll talk about briefly is the short-term investment bucket; the buy and sell market, the Teslas and the GameStops of the world. This is how I view split testing within email & SMS marketing as I see it implemented across many retention programs today: you might hit and win big, you might not; that’s the market. There are a lot of ways to practice and get “better” at this over time, and a lot of people will sell you a lot of courses promising just that. Some split tests are not very risky with limited upside (standard subject line tests); others are more risky with more upside (splitting up your most valuable flow into A/B variations). I mostly view this as an area to spend time once you’ve set up your long-term plan. Lock in the retirement plan before you start playing around on Robinhood. As you build up the retirement fund, things you learn will make you a better trader when the time is right.
I’m not saying you shouldn’t split test or that there is no place at all for testing within your retention program. What I am saying is that out of all the business owners I’ve ever met, exactly zero have had the required resources to own both a meaningful split-testing structure AND a robust personalization effort. It’s just not realistic. I’m telling you that you will have to make this choice, and even that is assuming you have the luxury to dedicate the time needed to make this choice consciously. More often than not, these decisions are made for us without our knowledge. There are fires to put out, emails to answer, employees to manage, and roadmapping the future doesn’t always fit in. You’re living paycheck to paycheck, after all. There’s an expected level of “frantic” to that, right?
Building your long-term investment—your life-long investment—in your business is pretty straightforward. Focus your energy on creating the most personalized experiences possible for as many of your customers and audience members as necessary. This is important! Your goal is not to create personalized experiences for EVERY customer and audience member (unrealistic goals lead to wasted effort), but to create the most personalized experiences possible for AS MANY customers and audiences as necessary.
Look at your retention strategy today with fresh eyes; what are you gaining from the messages you’re sending out? If you’re just cashing paychecks, I’d say some marketing resilience is in order. I’ll follow this post up shortly with a complimentary post helping to lay out how I view the process of building this resilience right into my email + sms programs.
Questions? Shoot me an email at hello@jasondonapel.com
Talk soon
