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


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