If you’re still using first generation email systems, you’re at risk of losing your customers.

“When you are finished changing, you’re finished.”
-- Ben Franklin

Judging by my unscientific sampling of a range of email I receive, there are some companies that run the risk of being “finished” by their customers. From retailers, financial service providers and travel companies to consumer publishers, B2B publishers and technology companies, there is staleness to many of the email newsletters. This doesn’t have to be the case.

It’s apparent many marketers are stuck using what I’d term as “first generation” email systems when they could be moving up to more advanced systems that enable greater customer centricity with an eye towards the bottom-line.

I’ll take you through some of the key differences between first-generation email systems vs. installable software solutions available in the market vs. modern, next-generation email solutions. Whether you are using email marketing by working with a publisher or for your own internal purposes, market leaders will take advantage of today’s modern systems. If you are using a publisher’s email solutions, ask them if their systems will enable what is outlined below. Without it, the effectiveness of your campaign is likely to be impaired.

I’ve outlined five capability areas to look at -- content creation, reporting, viral marketing, best practices insight and management, and software management -- with accompanying criteria to judge prospective service providers.

Content Creation

	First Generation Software Solution Modern Email Services Basic Content Yes Yes Yes Conditional Content  No Limited Yes

Naturally, all email solutions can do the basics of content creation. It’s when you get into more advanced content creation that the differences emerge. Conditional content refers to the ability to base content on registration data, online behavioral data (e.g., past purchases), offline data and customer equity states (e.g., prospect, first-time purchaser, loyal customer, etc.). For example, a leading social network firm draws on more than 200 data elements,, as well as what equity state the customer is, in to dynamically serve up literally thousands of unique versions of its newsletters to provide the most relevant offers and content.

Reporting

	First Generation Software Solution Modern Email Services Basic (#’s sent, opened, clicks) Yes Yes Yes Advanced (equity state reporting and optimization)  No No Yes Ad hoc reporting available No Limited Yes

Without strong reporting, it’s very difficult to optimize your customer communications and campaigns. It’s not enough to know how many emails were opened and clicked. You need more information to take corrective action. Modern systems will not only provide deep reporting information, but will also enable you to optimize your campaigns on the fly. Even with this advanced reporting ability, each business has unique aspects that require ad hoc reporting. Ensure your provider can provide ad hoc reporting without charging you an arm and a leg or creating a long turnaround time. Examples abound of marketers who have increased their results 50 to 100 percent over the course of a campaign as a result of reporting and optimization.

Viral Marketing

	First Generation Software Solution Modern Email Services Viral Capabilities No Limited Referral Tracking Yes

One of the reasons email marketing can be so cost effective is the ability to tap the word-of-mouth email enables (i.e., viral marketing). Malcolm Gladwell’s book, The Tipping Point, introduced the notion of “connectors,” users who connect other users. A modern email service can help you identify and reward the connectors. Your email service should provide not only the ability to track who passed along an email, but also track pass-along multiple deep levels even if the customer used Outlook’s forward button rather than clicking the “Send to a Friend” link.

Service Level Agreement

	First Generation Software Solution Modern Email Services Service Level Agreement in Contract Sometimes offered Sometimes offered Yes Flexible Service Level Agreement Throughput and availability – limited Throughput and availability – limited Throughput and availability – tailored

As anyone who has managed a vendor relationship can tell you, it’s often their service that drives your satisfaction. It’s critical not only to ensure a high level of service, but also to tailor that service to a business’ needs -- not the vendor’s. For example, email providers will often dictate when emails can be sent and how many can be sent in particular windows. Email testing often uncovers opportunities in the day or week when your email is best received. Be sure you can act on that information.

Best Practice Insights and Management

	First Generation Software Solution Modern Email Services CAN-SPAM Compliance Only with client involvement Not offered, function of client staff Yes Email Marketing Yes Yes Yes Viral Marketing No No Yes ISP Relationship Management (whitelist, etc.) No No Yes

There is a lot to know to effectively manage an email campaign, both to avoid getting in hot water and to maximize the capabilities of the medium. Whether it is adhering to the requirements of the latest legislation coming from the government or the vagaries of ISPs’ whitelists, you should be able to count on your email service provider to wade through the maze. Furthermore, email service providers have seen lots of campaigns, so they should be willing to share their insights on the best practices associated with email and viral marketing. According to Forrester, marketers who turn to email service bureaus with specialized expertise achieve purchase rates four times higher than marketers who keep all their email operations in-house.

Software Management

	First Generation Software Solution Modern Email Services Deployment Flexibility (i.e., ASP, in datacenter, etc.) No No Yes Software Management and Maintenance Outsourced Yes No Yes Product Cycles 6-9 months 6-12 months 6 weeks

Hopefully you are establishing a long-term relationship when you select a vendor.

Some other subtleties that you should be aware of are the software management side of the equation. Even if your IT department will manage the process, the flexibility they have will impact your marketing capabilities and ability to turn on a dime. For some companies, the right choice is a completely outsourced solution, while for other companies installing software in their own datacenter is the way to go. This may evolve as you make a deeper commitment to email communications so having flexibility is a benefit. Modern systems are architected in a way to allow shorter product cycles which enable a greater ability to put new strategies in place as your vendor’s systems evolve. As you gain experience with modern email capabilities, it’s likely your requirements will steadily increase. Be sure your vendor can keep up with you.

Email newsletters represent one of the most cost-effective means of communicating with your customers. Just as a relationship with a spouse will go stale if you don’t inject it with some spark, you have the opportunity with smart email marketing to improve the depth of your relationship with your customers. Unopened emails are telling you that your customers are tuning you out. Unsubscribes are a message that your customer is divorcing you. Either action puts your business at risk. The criteria listed in this article should help you mitigate that risk.

Do you have an email best practice to share or a campaign case study? Share it with me and we’ll highlight some of these in the future on iMediaconnection.

Dave Chase recently joined Altus Alliance (www.altusalliance.com), which specializes in working with emerging businesses that have transformational services for their customer.  Before joining Altus Alliance, Dave spent nearly 20 years in the industry with the last twelve years at Microsoft in various senior marketing and general management roles, including his role as MSN’s Managing Director for Industry Marketing & Relations. In that capacity, he was responsible for MSN taking a leadership role within the Interactive Marketing industry to grow Online’s share of the overall ad market in concert with AOL, CNET, Yahoo!, Google and other market leaders.
 
Dave played leadership roles in launching several new businesses within Microsoft including Microsoft’s entry into the enterprise software and server business which is now an $8B business. This included co-leading Microsoft’s first vertical marketing efforts where he grew the Healthcare vertical market from virtually no presence to a market leading position. The healthcare business now represents over $400M in revenue for Microsoft.

From there, he was integral in Microsoft’s entry into consumer Internet businesses that achieved both critical and financial success. These included Sidewalk, Encarta, and HomeAdvisor, which were among the first profitable consumer Internet businesses for Microsoft and heavily used email marketing to enable their growth.

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