BrightWave's Simms Jenkins sits down with Silverpop CEO Bill Nussey about email and marketing in the first half of a two-part interview.

Bill Nussey is the president and CEO of Silverpop, a provider of permission-based email marketing solutions, strategy and services. Ranked as having the highest business value and richest feature set by JupiterResearch in 2004, Silverpop was also acknowledged by research company Forrester as a "strong performer" that "stands out with an interface that is quite easy to use while providing strong functionality."

Before joining Silverpop, Nussey was president and CEO of iXL, Inc., a publicly traded e-business consulting firm. During his three-year tenure, iXL executed its initial public offering, increased revenues from $10 million to $120 million per quarter and grew from 400 to over 2,000 employees. Nussey has also served as an investment professional with the venture capital firm Greylock Management Corporation. He co-founded and was CEO of DaVinci Systems, an award-winning email software company. 

Simms Jenkins: How would you describe the state of affairs, in general, for the email marketing industry?

Bill Nussey: Overall, the world of email marketing continues to grow and prosper. A multitude of studies -- from click-rate trends to consumers' willingness to put up with spam -- support email’s continued efficacy as a marketing channel.

Despite the fact that email has been around for years, it remains a highly specialized field. Serious email marketers have long since evolved past batch-and-blast (or spray-and-pray) strategies. In many cases, marketers now give email the same care and attention they’ve been giving direct mail for years. That kind of strategic focus is generating results. As I noted in a recent teleseminar that Silverpop co-hosted with eMarketer, marketers believe that email has the highest ROI of any online medium. And a 2004 Forrester Research study found that permission email ranks ahead of radio, TV and print for developing trust with consumers.

Over the last five years, email marketing has undergone a sea change from a prospecting tool to a relationship and retention tool. In that capacity, email is without peer in terms of ROI, online or offline.

Jenkins: More specifically, what are the biggest issues that email marketers have today?

Nussey: The largest issue today is deliverability. Every time we conduct a seminar or conference, we're deluged with questions about improving deliverability. Most studies indicate that deliverability remains the number one concern among email marketers. There is good news, though. Delivery rates continue to climb, and the standards and practices behind deliverability are becoming more widely known and applied.

Another issue marketers must grapple with is gaining a solid understanding of true multi-channel campaigns. For example, I know a company that regularly executes campaigns across both direct mail and email. Internally, its direct marketing team and its email marketing team are constantly battling over whose response rates are higher. The company's analysis showed that, while email’s response rate is a little higher than direct marketing's response rate, they are fairly close overall. Unfortunately, the company has invested so much energy debating response rates that it has completely missed the point, which is that each email contact costs about one-twentieth that  of direct mail. In terms of ROI, email is the runaway winner. But, until the company has a true multi-channel view of its campaigns, it will continue to spend far more than it needs to.

Jenkins: Can you tell us what has your interest and gets you excited within the industry these days?

Nussey: It's easy and convenient for CMOs to ignore email today. Its negligible cost is almost a rounding error in most marketing budgets and, by ignoring it, senior marketing execs can avoid answering difficult questions about whether they are spamming their customers. The truly exciting news is that all of this is starting to change.

As ROI and customer satisfaction with email marketing continue to climb, senior marketing execs will have no choice but to look past the popular conception of “email as spam” and see the medium for all its potential. This will unleash a whole new level of budgets, strategic thinking and overall success of email marketing.

On the technology front, I see two trends emerging that will further fuel the growth and impact of email.

The first is a blurring of boundaries as email is combined with other push media such as RSS, SMS and chat. Each medium has its unique qualities, but from a direct marketing point of view, they all benefit from targeting, analysis and campaign management.

Second, and most exciting, is the continued proliferation of campaigns using life-cycle automation. Whereas today, even the most targeted and relevant campaigns still are sent all at once to a group, life-cycle automation only delivers messages one-at-a-time based on an external, time-based event such as a subscription renewal or home purchase. Studies indicate that time-based, life-cycle messages can get two-to-three times higher response rates. This is clearly the future.

Jenkins: For the people in the trenches, actually managing email campaigns, implementing best practices, testing, segmenting et al, what would be your advice to them?

Nussey: It’s all about three things: execution, execution and execution. All the targeting and creative in the world can’t undo the damage of a message that starts out, “Dear $first_name$." At some point, everyone has received one of these messages, and they are all too often followed up by another blast from some VP apologizing for the error.

Email is deceptively complex and many marketers often under-invest in the day-to-day processes that drive tight execution. At best, the result is wasted time. At worse, it’s a brand damaging, embarrassing message that is delivered late and full of errors.

Areas marketers need to focus on include: defining a process that they stick with; taking the time to actually perform tests, and subsequently measuring every campaign; and making sure that proper QA is done every time. One of the most overlooked aspects of execution is the email marketing tool itself. Is it easy to use? Can it flag mistakes such as a missing opt-out? Does it make testing easy? The right tool can make the difference between two hours and 12 hours per campaign.

Jenkins: On the other end, for the people that hold the purse strings, the CMOs, CTOs and CFOs, who are responsible for email marketing’s budget, but are not involved in day-to-day operations, what should they be focused on?

Nussey: Ironically, the biggest risk to email marketing is not too little budget, but rather, too little focus from the CMO. Because email is so inexpensive, the CMO often overlooks not only its opportunities but its downsides as well. Where the CMO will force traditional direct marketers to target and analyze results in order to ensure high ROI, email marketers often are not put under the same pressure to prove performance. When email campaigns do get more budget, it often is to grow larger lists or to make fancier creative. Budget increases are rarely earmarked for more staff or more time allocated to test and segment. CMOs are only slowly realizing that the old adage of marketing, reach and frequency, are the worst possible approaches to take with most email marketing campaigns.

In the end, the success of an email channel is entirely about relevance. As CMOs incorporate this into their strategic planning, they will find even higher levels of success with their email channels.

Jenkins: As a result of your book, "The Quiet Revolution in Email Marketing," have you gained any additional insight on email marketing and the people using it? Meaning, has the response to the book increased your confidence that email will become a sophisticated and interactive communications medium?

Nussey: I’ve been very pleased at all the positive feedback I’ve received. I was visiting a marketing friend the other day who had purchased my book and evidently read through it quite a bit -- it was dog eared and full of hand-written notes. He apologized for its poor condition, but I could not have been happier.

The most common feedback I’ve heard is that the book helps the day-to-day email marketer make the case to his or her boss about how the medium should really be used. Think about it. If a monthly campaign nets $100,000 in incremental revenue, it’s perfectly reasonable for the boss to come back and say, "Let’s do campaigns four times a month instead of just once." The book helps make the case for the trade-offs in over-sending and lowering relevance.

Next week: Simms Jenkins and Bill Nussey continue their conversation, talking about metrics, CAN-SPAM, RSS, blogs and where email marketing will be in five years.

G. Simms Jenkins is Founder and Principal of BrightWave Marketing, an Atlanta-based email marketing and customer relationship services firm. He has extensive relationship marketing experience on both the client and agency side. Jenkins has led BrightWave Marketing in establishing a large client list, including marquee clients like GMAC Insurance, CoreNet Global and The Atlanta Journal - Constitution. BrightWave Marketing has become a leader in the Email Marketing outsourcing space by using their expertise in strategy, design, list management, segmenting, delivery and analysis. Jenkins has been recognized by many media outlets as an Email Marketing and CAN-SPAM expert. Prior to BrightWave Marketing, Jenkins was Director of Business Development at two high-tech start-ups and headed the CRM group at Cox Interactive Media, a unit of media giant Cox Enterprises.