The Rumors of Email’s Demise Have Been Greatly Exaggerated, Part V

Thank goodness I can finally write a positive piece under this headline, and not a rebuttal like I did here, here, here, and here.

It seems like there are signs of an email marketing renaissance left, right, and center these days.  First, the industry has enjoyed significant growth this year.  Every vendor I speak with in the space except for one or two is posting record numbers — whether they sell data, technology, or services.  And lots of vendors have been swallowed up by larger multi-channel CRM or DM companies for nice prices.  Every marketer or publisher I speak with is investing more money into their email programs, and they are seeing stellar returns.  In fact, their most persistent complaint is that they can’t get enough good names on their lists fast enough.

But beyond those signs, the much-maligned email channel has finally garnered some positive press of late.  First, as, Ellen Byron wrote on November 23 in her Wall Street Journal article entitled “Email Ads Grow Up – Department Stores Discover Devoted Fashion Fans Read Messages in Their Inboxes,” consumers are beginning to much more easily separate spam from commercial email they want, one consumer even going so far as to call emails she receives from retailers “like a quick shopping trip…a guilty pleasure.”

Byron also went on to quantify what some mailers are doing to tilt the balance of their marketing spend ever so slightly in the direction of email.  For example, The Gap is diverting over $26mm that they spent last holiday season on TV towards online and magazine.  And analysts point out that no matter how much marketers spend on their email programs, it’s still a small fraction of what it costs to create and insert a big print or broadcast spot.  I couldn’t even find the full article to link to, but it wouldn’t matter, as you have to be a Journal subscriber to read it (annoying).

And today, email industry guru Bill McCloskey wrote an admittedly self/industry-serving piece about how he is seeing the signs of this email renaissance moving into 2006 as well, starting with the fact that trade associations like the ESPC and the DMA are doing more to step up to the plate in terms of defending and promoting the email channel with the press and consumers.  He also cites the fact that consumers are getting more used to spam and mentally separating out good email from bad email as a reason for the comeback.  Bill even goes so far as to say that “email will surpass search in the battle for marketers’ hearts and minds.”  The full article is here, but warning again, you have to be a Mediapost subscriber to read it (free but still annoying).

It’s nice to see the media tide turning here towards a more rational, balanced position on email.  It’s not just about spam and scams — it’s about the power, customization, and intimacy of the channel!

Wanted!  Comp Benchmark Participants, Part II

So far, the responses to my earlier posting on organizing a comp benchmarking project are going well.  We still don’t have as many as I’d hoped, but it’s only been a couple of days.

However, I did receive a comment and link that led to an email exchange with Mike DiPierro, who pointed me to another collaborate effort that’s worth looking at on the web.  Although it may not be quite as customized as the one I’m hoping we can build, this group does an annual report for private company comp, one in IT and the other in Life Sciences.  You can see more about it here if you’re interested in participating in their 2006 survey (but participate in ours as well!).

A Good Laugh at Microsoft’s Expense

Anyone who has ever had a frustrating moment with any Microsoft product (um, that probably means everyone) must watch this 4 minute video.  Thanks to my colleague Carly Brantz for turning me on to this gem.

Update:  new link for this video as of June 18, 2006 here.

I went to an amazing event this weekend. One of my close friends, Raj Vinnakota, started an education foundation about 7 years ago in Washington, D.C., called the SEED Foundation. The foundation’s first venture is the nation’s first urban public charter boarding school, located in the Anacostia section of town and dedicated to providing a college prep environment for kids who otherwise might not even finish high school in the inner city of D.C. The school has had a tremendous amount of national recognition, from Oprah, to Time, to Good Morning America, to Newsweek.

The school has now been up and running for six years, starting with a group of seventh graders back in 1998, and this Saturday, that first class graduated. Impressively, all 21 seniors are going to college, including some going to Princeton, Georgetown, and Penn. Alma Powell spoke at commencement. The event was one of the most moving things I’ve ever attended. The kids and their families were all so proud, and justifiably so.

Raj and I have followed fairly similar paths since meeting in college. Almost 100% of the same activities at Princeton, same first job after college at Mercer Management Consulting, lots of friends in common, similar family backgrounds. The only thing we have in common from the last 5 years, though, is that we’ve raised the same amount of money as leaders of our respective organizations — me for the for-profit Return Path, Raj for SEED.

Attending the SEED graduation gave me a twinge of guilt that I’m not doing something quite as overtly good for society, but it has an inspirational effect on me in two ways. First, it gave me hope for mankind’s future that people as talented as Raj are doing overt good for the less fortunate every single day. Second, it gave me lots of encouragement to build a successful company so that both the company, and I personally, can give back to society over time in other ways, both with money and with time.

Raj tells me that, now that he’s proven the model, he’s going to have a second school up and running by 2006, with more to come after that. All I can say is, good luck, and let me know how I can help!

CEO Diary:  What Makes a Great Day?

5:30 a.m. – run (have to keep up with Brad)

8:45 a.m. – networking coffee with former main contact at large strategic partner; now CFO of another company in the industry

9:30 a.m. – work time/email/read newsletters, Wall St. Journal online, various RSS feeds

10:30 a.m. – internal meeting to discuss mothballing a product feature that’s hard to maintain and doesn’t generate much revenue

11:00 a.m. – internal meeting to clarify roles and responsibilities between account management and  client technical operations

11:30 a.m. – brainstorm 2006 strategy with head of one of our lines of business

1:00 p.m. – great sales call on a Tier I prospect with new sales person; business almost certainly forthcoming!

3:00 p.m. – meet with head of sales and hea of HR to discuss candidate for sales position and potential changes to sales compensation structure

3:30 p.m. – review draft of new (revolutionary!?!?) corporate web site; do deep dive on critical headlines and copy points with team members

4:30 p.m. – status meeting with new head of marketing,including quick stand-up meeting on PR strategy for upcoming trade show with one line of business head and product manager

5:30 p.m. – work/email/planning next Board meeting agenda/blog posting

7:00 p.m. – dinner with CTO

Energizing (frenetic?).  Diverse in terms of functions/departments covered.  Good balance of internal vs. external.  Some items high level, some more detailed.  Mix of brainstorming vs. decisions vs. status checks.  Some social mixed in with hardcore work.  This is why I love my job!

Counter Cliche:  No Conflict, No Interest

The entrepreneur’s take on Fred’s VC cliche of the week — "No conflict, No interest" is that it applies equally but differently to management teams. 

Our nation’s first president, George Washington, is often said to have brilliantly placed political enemies Thomas Jefferson and Alexander Hamilton on his first cabinet so he would have differing points of view from which to choose when deciding some of the complex and delicate issues that faced our nation in its infancy.  And many of those early decisions of the Washington administration — things like how to pay down the debt from the Revolution, or whether and how to put down the Whiskey Rebellion — were critical in forming our nation and deciding how much power to invest in our government.

The tension between one executive and another on a management team is, though perhaps less historically important, no different.  A management team that finds itself 100% in agreement, 100% of the time, is in trouble.  A management team that can have disagreements and use that tension productively to drive decisions is much better off.  Building such a team requires the CEO to seek out executives who view the world differently, who have the courage to speak their minds in the face of strong opposition, and who have the ability to see different points of view.

I’ve always thought that the ability to stare down adversity in business — or turning lemons into lemonade, as a former boss of mine used to say — is a critical part of being a mature professional. We had a prime example of this a couple weeks ago at Return Path.

We had scheduled a webinar on email deliverability, a critical topic for our market, and the moment of the webinar had come, with over 100 clients and prospects on the line for the audio and web conference. There was a major technical glitch with our provider, Webex (no link for you, Webex), and after 5 or 10 minutes, we had to cancel the webinar — telling all 100 members of our target audience that we were sorry, we’d have to reschedule. What a nightmare! Even worse, Webex displayed atrocious customer service to us, not apologizing for the problem, blaming it on us (as if somehow it was our fault that half the people on the line couldn’t hear anything), and not offering us any compensation for the situation.

As you can imagine, our marketing guru Jennifer Wilson was devastated. But instead of sulking, she turned the situation on its head. She rescheduled the event for three weeks out with a different provider who was technically competent and a pleasure to work with, Raindance, and sent every person who’d been on our aborted webinar a gift certificate to Starbucks so they could enjoy a snack on our dime during the rescheduled event. Not only did we have full attendance at the rescheduled event, but Jennifer received dozens of emails from clients sympathizing with her, commending her on her attitude, and of course thanking her for the free latte.

It’s hard to do, and you hate to have to do it, but successfully turning lemons into lemonade is one of the most satisfying feelings in business!

People rarely comment on this blog (or most non-political blogs, I’ve noticed), so feel free to share your best lemons-to-lemonade story with me in a comment, and I promise I’ll post the best couple of them pronto!

Today, the FTC very shrewdly punted on the issue of the proposed “Do Not Email” list implementation, saying that authentication systems need to be put in place before such a list can be considered. This buys the world more time to work on more effective, market-driven solutions to the spam and false positive problems.

I read a few interesting posts on this today, including one from Jeff Nolan which nicely captured Chuck Schumer’s elegant combination of demagoguery and idiocy about this issue; and one from Anne Mitchell pointing out that they’re about six months late with their conclusion. Feels about right for the federal government.

What’s interesting to me is that all of the comments by and about the FTC and the proposed “Do Not Email” list focus on the wrong thing: they say that the problem with the list is that spammers would abuse it by hacking into it and stealing all the email addresses. Ok, I’ll admit, that’s one theoretical problem, but it’s not THE problem.

The structural problem with a national “Do Not Email” list is that responsible emailers, non-spammers, don’t need to use it since they get appropriate permission from their customers before sending them email…and spammers won’t bother using it since they don’t give a hoot anyway and will find a way around the list as they do everything else. In the end, the creation of such a list would do nothing to stop spam, but it would certainly create a lot of confusion for legitimate marketers and their customers around opting in and opting out. It would also, notably unlike the fairly successful national “Do Not Call” list, not do anything to reduce the volume of spam, which will create disappointment and anger among consumers (and hello, Senator Schumer, backfire on its political sponsors).

Those aren’t bigger problems than spam to be sure, but why should we implement a solution to the problem that doesn’t work at all and that causes its own ancillary problems along the way?

And here I am. In the middle of that “once.” Fred Wilson wrote a great posting by that title on his blog, and it has stuck with me. When I decided to start a blog, it was the first thing that came to mind as a main theme for the blog, so there you go. Only Once it is.

I’m not entirely sure why I’m doing a blog. Part of it is fascination with the newest corner of the Internet and its related areas like RSS (clicking on that link will get you the RSS feed of this blog). Part of it is to try out the medium and see how it might work for the hundreds of marketers and publishers who are my company’s clients. I suppose part of it is to generate some interest in my company, Return Path, which in my extremely biased opinion is one of the most interesting companies in the email services business.

My one hesitation about starting a blog is that the other part of me feels like blogs are a bit narcissistic, and I can’t imagine who on earth would want to read whatever it is that pops into my head. But I’ll give it a try and promise not to go overboard on the extraneous postings.

So, I will probably post periodically about experiences of an entrepreneur, of the one time I’ll ever be a first-time CEO. But I may also post on other things periodically that match my interests: book reviews, travelogs, Princeton, great wines, maybe even the occasional political commentary to prove to my predominantly New York friends that (a) not all Republicans are bad, and (b) not all Jewish New Yorkers are Democrats.

So, here we go…enjoy!

Naked Talking

Naked Conversations:  How Blogs Are Changing The Way Businesses Talk with Consumers, by Robert Scoble and Shel Israel, would have been mildly interesting had I never read, let alone written, a blog.  So chances are if you’re reading this blog regularly, it’s not a great use of your time or money, but if you just ran across this post while trying to learn more about blogging – or really about any form of post-2002 Internet marketing – it’s probably worthwhile as a primer. But if you’re knee-deep in internet marketing or blogging, it may be a bit of a snoozer.

I find it entertaining that leading bloggers like Scoble and Israel, who are part of the ultra-small group of hardcore bloggers, as they describe, that “posts 50 times a day, mostly at 4 a.m.,” think blogs are really conversations.  Don’t get me wrong, I believe that blogs are revolutionary in that they allow anyone to run his or her own printing press.  I also think it’s critical for companies to have corporate blogs (Return Path had one of the first), for CEOs and other executives to blog (obviously I do), for companies to allow their employees to blog relatively unencumbered by corporate policy, and, perhaps most important, for companies to track and listen to what others who blog are saying about them and their products.

But let’s not get too caught up in our own euphoria as bloggers to think that what’s happening is actually a conversation the way we humans think of conversations.  Blogging allows more people to have their voices heard, and it certainly allows for transparency and authenticity, as the authors say, but there’s almost never dialog.  Many popular blogs don’t have comments at all.  Those who do allow comments have few if any posted.  And those who have comments posted rarely have any other readers who actually see the comments, since the blog is a publishing forum and RSS is a publishing format, neither is a truly interactive medium like chat.

I’m sure there are some blogs that have active commenters, particularly political ones, and hopefully someone, somewhere, reads and internalizes those comments when they’re relevant. And certainly, high circ bloggers who read and know each other participate in a dialog by talking AT each other via their blog postings, not via comments (meaning that for the “dialog” to make sense to the greater world, the greater world must read all blogs participating in a “conversation.”). But, please, let’s not pretend there is really a 20-million-way conversation happening.

Transparency Rules

I think each and every one of our 13 core values at Return Path is important to our culture and to our success.  And I generally don’t rank them.  But if I did, People First is a leading contender to be at the top of the list. The other leading contender would be this last one in the series:

We believe in being transparent and direct

The big Inc. Magazine story about us last year talked a lot about our commitment to transparency and some of the challenges that come with being transparent and direct with people. I’d like to highlight here some of the benefits of being transparent, and the benefits of being direct (sometimes those two things are the same, sometimes they are different).

Transparency’s benefits are so numerous that it’s hard to pick just one or two themes to write about, but my favorite benefit is empowerment.  Especially in a world where information is increasingly available and free, hoarding it comes at a high cost.

• If everyone in the company knows that you’re short of plan and disappointed about that, the majority of people will exercise hawkish judgment about expenses.  The opposite is true as well.  If people know you’re running ahead of plan, they will be more willing to take risks and make investments. Without transparency of financials, people are just more in the dark and looking for all answers and judgment to come from above
• If everyone on your staff understands the process you went through to make a tough call about an element of your strategy, they are not only more likely to understand and support the decision, but they learn from you how to make decisions in the first place
• If your Board knows you’re having a tough quarter from the get go, they’re not surprised at the quarterly meeting and don’t force you to spend painful and precious minutes in the meeting On the firing line reporting on the details. Instead, they can spend time leading up to the meeting thinking about the details of the problems and how they can help or what insights they can bring to bear

Transparency does have some limits, even today.  There are three main limits we run into. One is compensation — still too touchy and wrapped up in people’s self esteem to post on the wall (though I have heard about a couple companies that do that, believe it or not). Another is terminations. Although you might want to tell the company that you fired Sally because she wasn’t carrying her weight, the long term value you derive from dignity and kindness trump any short term value you might derive from such a statement (plus, people know when Sally isn’t carrying her weight, anyway). The third limit to transparency is around half-baked ideas. Although you might sometimes want to try ideas on for size publicly, you have to be careful not to send people scurrying off in the wrong direction just because you blurted something out in a meeting.

The second half of this value statement is about being direct.  Being direct mostly has benefits in terms of efficiency. You can be direct and still be polite and kind.  But being direct means not beating around the bush, being political, or being conflict avoidant.  It means nipping problems in the bud and saving yourself time or money in the long run.

• If you are direct with an employee who is not performing well with data to back it up, the employee has a much better shot at improving than if you delegate the feedback to HR, wait for the next annual performance review, or go passive and skip the feedback entirely
• If you are direct with a boss who you think is treating you unfairly, your odds of fixing the situation go way up
• If there’s bad news to deliver, be direct about it — look the other person in the eye, deliver the news crisply and succinctly, and as quickly as you can after finding it out or deciding on it yourself

Avoid euphemisms at all cost. Telling someone you “might have to rethink things” is not the same as saying “I will have to fire you if xyz don’t happen in the next 30 days.” Saying “xyz would be good for you to do” is not the same as saying “the way for you to get promoted is to consistently do xyz.”

Being transparent and direct are increasingly table stakes for successful companies full of knowledge workers who want to be empowered and clear on where they stand.

I’ve really enjoyed writing all of these values out in living color. I will do a wrap up post shortly.