Spotify's Global VP Shares His Proven Growth Formula

When Apple launched iTunes, the music industry took a hit. CD sales plummeted as consumers were given the opportunity to purchase only the individual songs from artists they liked. The result was that album sales were down while individual song sales became the focus.

Several artists rethought their monetization strategies including a renewed focus on concert and merchandising revenues and going as far as agreeing to global deals with Live Nation.

And this has been the “new normal” for the last several years. That is, until U.S. streaming revenue grew 57 percent to $ 1.6 billion in the first half of 2016 and accounted for almost half of industry sales. What changed?

Stop Solving the Symptom. Focus on the Root Cause!
I had an opportunity to speak with Spotify’s Global Vice President for Growth, Innovation and Marketing, Mayur Gupta, and asked him to share his proven formula for growth. You can watch the full interview here:

What was fascinating about my conversation with Mayur Gupta, is that he identified that most marketers are solving the symptoms rather than the root causes. We live in a data-driven world, but often we’re not seeing the whole picture and so we’re tackling symptoms we can identify rather than the root problem our customers are looking to solve.

“How many of us truly understand the needs of our customers?” asks Mayur Gupta. “We think we do, but we really don’t. We ask her questions about her wants and needs and then base so much of our strategy on that information. But our understanding of her needs is isolated to our own world; your understanding of how she engages with the product rather than what happens before or after.”

Mayur Gupta goes on to explain that most marketers have a myopic view of their customer because they are only seeing them in the limited context of their limited interactions – often through the filter of a limited product interaction. “Our understanding of her needs are very limited and very fragmented, which ultimately leads to a fragmented experience and often times talking at her instead of really giving her what she needs and at times even before she knows she needs it.”

The takeaway here is the need to stop solving the symptom of the problem (based on the limited insights you have) and instead focus on the root cause, which often requires a deeper level of understanding of your customer’s actual needs.

Map Your Customer’s Journey
In order to stop focusing on the symptoms and begin to understand the root challenges our customers face, we must map our customer’s journey. Specifically, we need to clearly define our customer’s needs based on where they are in their journey. How do your customers discover your company and the products it offers? How do they engage with you (and you with them)? What moves them to transact with you? And, most importantly, what turns them from a customer into a raving fan that advocates for your services?

“We don’t think longitudinally through her journey,” says Mayur Gupta, “and whatever is happening in her life in order to put her at the center. The customer journey is a longitudinal journey in the context to any brand. If you’re not listening to the signals, you may miss a major life event has occurred. That’s because we are relying on our first party CRM system rather than the signals she is giving us.”

Mayur Gupta explains that the system is broken because all the data we collect as a business is channel led. This means the data is collected and stored in fragmented systems and that’s why our understanding of our customers is limited.

“The bottom line is that the way we are structured as organizations, the way we plan, and the way we execute those plans are all fractured and not frictionless,” Mayur Gupta explains. “They are not aligned with the way she runs through her journey; all the way from awareness to engagement to trial to lifetime value and so on.”

Make the Shift to Always On System of Engagement
Lastly, and most importantly, a shift in your approach to marketing is needed. Individual campaigns and one-off initiatives in isolation will have continued declining impact over time. Instead, Mayur Gupta recommends that we migrate to an “Always On” system of engagement.

“Our marketing efforts should be part of a system that is always learning; one that is always listening and always interpreting those signals” he says. Then we can tie that human behavior into messaging that is channel agnostic because it does not matter. The Bottom line is that our customers are in need of a specific product and we as brands are able to fulfill that at any given touch point, so that it is the easiest path to purchase for you as a consumer.”

As a marketer, you must work tirelessly to build an ecosystem around your ideal customer. By understanding what your customer’s true needs are and then mapping your customer’s journey, you will be well positioned to shift to an always on system of engagement; one that allows you to better understand the needs of your customers and one that empowers you to deliver the right message at precisely the right time. This will endear you to your customers and allow you permission to deliver the products and services they truly need. This is the essence of Spotify’s proven growth formula and one that you can implement today.

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