When was the last time you played Monopoly but never bought a property? We know that would be ludicrous, right? You would trip over St. James Place with its 2 green houses, or God forbid Park Place with a big red hotel on it. Your cash would be drained. Without owning property you’d have no hope of building enough revenue to last around the board. You’d be dead on arrival.
Yet this is the mistake most companies make with their customers. You can’t rent your customers forever. At some point you need to own them.
Now bear with me for a second.
Every single organization has an engagement pyramid.
Not-for-profits and charities have been talking about this for years. The pyramid is shaped with the more casual followers at the bottom. The most committed evangelists and leaders at the top. And you move people through the pyramid with different levels of engagement as they rise.
Political movements rise and fall based on how effective this engagement is. If I were a spoken word poet I would repeat this.
Political movements rise and fall based on the pyramid of engagement.
This is exactly what we have seen politically over the past 5 years.
It goes without saying that corporations have similar pyramids. Only they focus on engagement and loyalty.
At the bottom of the pyramid are casual followers. But they will switch between companies depending on the offering. Higher up the pyramid followers become more loyal. At this point they consider the company as a friend. Eventually, they commit forever as customers.
And the types of engagement changes at each level of the pyramid.
Alex Lieberman, from Morning Brew, summed it up best in this Twitter thread: Audience Building 101
Audience Building 101
Every company in the world is an audience company.
Whether it’s a Media, VC, or DTC business, if you’re not building audience Day 1, you’re not prioritizing the right things.
Here’s my framework for thinking about & building a killer audience
— Alex Lieberman ☕️ (@businessbarista) January 21, 2021
Interestingly, his engagement pyramid is upside down. This is because businesses often think they are funnels.
Alex starts by reminding us (CEO’s take note) that every company in the world is an Audience company:
“Whether it’s a Media, VC or DTC Business, if you’re not building audience Day 1, you are not prioritizing the right things.”
He then divides the audience funnel (the upside-down engagement pyramid) into 3 tiers:
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Rented Audience
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Owned Audience
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Monetized Audience
Tier 1 – Rented Audience
This is your top of the funnel. It allows you to build mass awareness, which is key to develop a relationship with your audience. There is high shareability and high discoverability among this audience. But you do not own them like social networks and video platforms do. Same with search engines. So the investment that your audience has made is low.
Tier 2 – Owned Audience
This is your opt-in audience. This is a deeper, more intimate relationship with your audience. The con is that the shareability isn’t as good as the rented audience, and discoverability is more difficult. Perfect examples of an owned audience are newsletters, virtual events and yes, podcasts.
Tier 3 – Monetized Audience
This is the top tier of the Engagement Pyramid or the bottom of Alex’s funnel. This is your highest intent audience. You are doing commerce with this audience. They are members of your club, they have a paid web subscription or a paid newsletter. Just like political campaigns, these are your evangelists. They are those who are most committed to your cause. From a business standpoint, this is where all the long term value is. But unlike the downward shape that Alex believes in, this isn’t a funnel… humans don’t trickle down. It is engagement that drives commitment up a pyramid. This defies gravity and is immense work.
What the CEOs need to understand right now is your CMOs have become addicted to growth marketing. That belief that spending $X on audience rental gets you a Y trickle down conversion. And this is without offering a more engaging relationship.
Podcasters recognized this years ago. That humans connect with intimate stories. They are engaging. They entertain you, educate you, and move you. And podcasts are the perfect vehicle for this. In fact, 40% of North Americans (or 112 million people) invest in this relationship every month. In doing so they will reward you by staying with you for 95% of 20-40 minutes on a weekly or bi-weekly basis. They will look forward to you whispering stories in their ear and won’t miss an episode.
Yet the majority of marketers, including the CEOs I speak with daily, are playing Monopoly. But without owning any property. This is the #1 reason that CEOs need to greenlight a podcast this year. It is time that you engaged with your audience. It is time to own that audience.
As we have seen, the last political movement failed due to a rented audience strategy. Don’t let your company make the same mistake.
