22 Jun Ep 24: Omotenashi economics or how to master retention marketing – with Koji Fukada
While companies generally focus on acquiring new customers, most of their revenue comes from existing customers, not new ones. On average, 80% of their revenue comes from customers they already have. So why not investing more on customers they already have? Why focusing so much on acquisition while the biggest value is on retention?
The art of retention marketing is to make your customers loyal. That is to keep them interested and engaged with your products and services. While companies have not only allocated a small budget to it, they’ve also relied on generic tactics that are one-size-fits-all solutions. They usually rely on membership programs, discounts, and points systems that are not really considering customers individuality.
My guest this week, Koji Fukada, understands that a loyalty should be based on building personalized relationship with customers. He’s the founder CEO of a Sprocket, a hospitality automation platform operating in Japan and US. The philosophy behind his product is derived from what he calls “Omotenashi Economics”, or Japanese hospitality consisting of anticipating needs of the guests.
Koji himself is from Kyoto, which is the capital of the omotenashi style. In the Gion district (the old town of Kyoto), most restaurants only accept a small network of customers and do not allow one-timer clients. What matters to them is the relationship they build with their existing customers, with only little consideration to fill the room. From customer management to customers engagement. This is what Koji tries to translate in the online world.
Koji has an impressive business background. He founded his first company in 2000. One year later he released the world’s first mobile e-commerce website. At the time, phones were only displaying a small matrix of black and white characters. But the technical challenge didn’t prevent him from selling 2-to-3 million dollar worth of fashion items every month.
In this interview, Koji shares his stories: how he’s built tremendous businesses, landing clients like McDonald, Sony, Uniqlo, etc. but also the hard times he went through, having to lose half of his employees for instance. He also shares some best practices on how to perform retention marketing today, to engage your customers and make them come back.
Questions: What are the best strategies to engage customers nowadays? What are the best tools to manage and interact with your customers? (reply in the comments)
- (2:29) Presentation of Sprocket – marketing automation
- (7:20) O2O – omnichannel integration
- (8:57) The world’s first mobile e-commerce website
- (16:46) What to do when your partner stop paying you
- (19:42) Importance of transparent communication
- (23:37) From recovery to growth
- (26:52) Building a vision
- (32:47) Omotenashi economics
- (39:09) Retention marketing automation
- (41:55) The importance of stories
- (49:24) How to increase customer engagement
- (52:58) Is gamification dead?
- (55:44) Quick-fire questions
- 16 Basic Human Desires (Steve Reiss)
- Founders Dilemma (Noam Wasserman)
- Kana-uni (カナユニ) Japanese/French restaurant in Akasaka
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