Marketing is the penalty of having a poor product says Amaysim founder and CMO
The founder and CMO of telco Amaysim has rejected the need to “segment” customers and claimed marketing is only necessary if the product you are selling is poor.
Christian Magel, speaking at the Association of Data Driven Marketing and Advertising (ADMA) conference, said customers are the best form of marketing, with word of mouth the most cost effective way of driving sales.
“That is the biggest marketing secret we have,” Magel said, telling delegates that 50 per cent of its customers have been generated through referrals.
“Marketing is actually the penalty that you pay for not having a good product. If you you have a good product and people buy it, you don’t need to advertise because you have such a great following they tell their friends.”
Magel went to on address to issue of customer segmentation, arguing too much time is wasted on continually trying to break down an existing database.
“We’ve heard a lot about segmentation, about having five or eight groups and so on. But honestly, I believe the age of segmentation is dead,” he said. “I’ve seen people doing segmentation only to do it again six months later.
“It’s interesting to start off but once you know who comes and joins you, then you have the data and your segmentation is your customer base.
“I’ve seen too many people spend too much money on segmentation pieces.”
Magel, who launched Amaysim in 2010, also took aim at competitors, describing off-shore call centres as “quite horrendous”.
He added that the market has changed dramatically over the past five years and questioned the economics of traditional marketing channels, arguing that “higher prices, less audiences and less engagement” is leading to decreasing returns on investment”.
Magel said “owned and earned” channels are more effective.
“You can earn leverage by people telling others about content you have produced and you can own your own channels, be it Youtube or Facebook,” he said.
He suggested marketing departments should become like a newsrooms, creating “unique and relevant content”.
Steve Jones
A few fair points made actually.
Except if you have a new product / new brand, like Amaysim itself was in 2010, then you need advertising for brand awareness.
No good having a great product if nobody know you.
But yes, once you have critical mass, and a great product, you can reduce traditional mass market channels to advertise (think how you hardly see Apple ads on TV.. no real need)
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Because marketing departments are so ideally placed and skilled to produce “unique and relevant content”. Has this guy ever met his marketing department ?
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You only see Apple ads in mass market channels.
TV/Outdoor/Print
You don’t really see any digital.
But apart from that agree with your point.
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I think this bloke may be confusing marketing with both advertising and selling.
Selling is when you have a product and try to persuade people to give you money for it.
Marketing is when you find out what people want and provide it to them at a profit, which seems to be exactly what he claims to have done.
Advertising isn’t imperative in either selling or marketing, but can turbocharge people finding out, thus buying.
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What old mate Magel here doesn’t realise is that he’s actually talking about marketing – product being critical to proper marketing strategy. He also clearly doesn’t grasp the fact that marketing and advertising are different. Fair shout to him though, he’s got as far as he has without this knowledge.
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But most products aren’t ‘great’. Most are fairly generic with lots of competitors offering very similar options. From banks to beans. Marketers tend to think they have an amazing product – most are perfectly acceptable – but very few really stand out in the way you would need to create any word of mouth.
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Yeah all my friends constantly tell me via word of mouth what cheese and toilet paper and jam and washing powder to buy.
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Guess that’s why AirBnB is upping marketing.
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>> Magel, who launched Amaysim in 2010, also took aim at competitors, describing off-shore call centres as “quite horrendous”.
At least they have call centres. In the last year, I have not had a voice discussion with an Amaysim call centre of any kind, instead told to use live chat – an inferior service option
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@ummmm hjt
There’s always one, isn’t there?
‘bu…bu….but Apple does X!’
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What’s Amaysim’s product? They’re a virtual carrier, so effectively they don’t have a product, they have a brand. Big difference.
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Amaysim was the least worst option when I arrived in AU. Now it’s the devil I know and inertia and lack of time mean that I don’t know if there’s better. I suspect that’s what approximates to customer loyalty. If Amaysim or a competitor were to *market* to me and tell me about a better deal (all the calls and texts I can eat to AU fixed and mobile numbers plus a way to get the only-still-there-for-adsl2 Telstra line out of my house, I’d stay or move straightaway. It’s possible that set of needs and prejudices makes me part of a segment that Christian Magel can’t see.
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