It's Not Email Marketing. It's Engagement Farming

Transcript lightly edited for spelling and punctuation. The conversation is unabridged.

Mark Evans: My name is Mark Evans, and I'd like to welcome you to Marketing Spark, the podcast that delivers small doses of insight, tools, and tips from marketers and entrepreneurs in the trenches. By small doses, it's conversations that are fifteen minutes or less. On today's show, we're going to talk about email and how to create campaigns that drive better results. I'm excited to have James Glover, CEO with Coherent Path, a SaaS platform that takes retailers' content and distribute it as a diet through email to maximize customer engagement and lifetime value. Welcome to Marketing Spark.

James Glover: Thanks for having me on the show, Mark.

Mark Evans: Now one of the things I wanted to ask you, James, is that email is still alive and well. There's all kinds of different ways to connect with customers, yet email never seems to die. I mean, people still embrace it. People still open email. How do you explain that?

James Glover: I think one of the ways to think about this is, you know, we're a data science company. So we like to look at what data we have on hand in order to help with the conversation with your customers. And when we look at the data, we see at Gap, for example, they might email their customer something like 5 or 600 times a year. That same customer probably buys from the Gap 4 or 5 times a year and visits their website 10 or 12 times a year. So when you think about the email channel in that context, you know, 500 of your 520 interactions with your customer, it's easy to understand why it's still viewed as one of the primary vehicles for communication that large brands have to reach their customer. It's also a channel where they can control the conversation. You know, when the customer visits the website, they visit for a reason. Whereas when you decide to send out an email, you get to decide what you want to talk about. Of course, it's hugely important that that topic be relevant to the person that you're sending it to, but you get to decide what you want to talk about with the customer. And so I think that's another reason why email is still a great vehicle for building your brand and having a conversation with the customer.

Mark Evans: Now one of the things about email, there's conversions, we live in this world of marketing automation. I mean, marketers love these tools that allow them to do a little bit of work but get maximum impact. And it has driven this whole idea of drip marketing where you continue to hammer away at your prospects and customers, with all kinds of different offers and information. But my sense is that there's email fatigue. Because after a while, the drip marketing approach isn't as effective because it's yet another email from a company to a prospect hoping they'll do something. How can companies take a smarter, better approach to email marketing, and how does drip marketing fit into the scheme of things?

James Glover: I think part of it is you meet a lot of retailers that think of email kind of like an ATM. And when you get behind at the end of the quarter, how are you going to make up that revenue? Oh, send out another email. And if you're still behind, send out another email. And so what you're trying to do when you do that is leverage the people that are at the bottom of the funnel, the transaction funnel, in order to get some revenue today. And that is certainly a reality for many retailers that number is important, and they use email in order to help them hit the number. What that obscures, though, is that email is also the primary, like we said before, the primary vehicle for building your brand, for having a conversation with your customer. So for me, it kind of reminds me of when I read that book by Michael Pollan called The Omnivore's Dilemma. And he went down and he met a farmer, and the farmer sold chickens and eggs and rabbits and all kinds of different things. But he described himself to Michael Pollan as a grass farmer. That if he took care of the grass, which all of the animals eat, then, you know, he would always have a great farm that would continue to produce for many, many generations. And I kind of think of email marketing as engagement farming. You have the right to capture that customer at the bottom of the funnel because you've continued to engage them in a conversation. You know? And so, you know, retailers need to think about using email to build their brand and to encourage customers to shop in new categories, to use it for, you know, discovery of things that the customer has never seen before. And in that respect, they should think of themselves as building engagement as well as doing the important sort of make the cash register ring in important moments.

Mark Evans: When I think about email, there's conversions are often equated to sales. So if I send an email, I want somebody to buy something. But should conversions be looked at in different ways? So for example, should we, as marketers and retailers look at email campaigns as opportunities to engage and educate where the sale may not be the primary objective? I mean, at the end of the day, that's what you want people to do, but your emails have different you're looking for them to deliver in different ways. Is that the way to look at conversions these days when it comes to email?

James Glover: If you think about sending out 100 emails, you'd be excited if one person converted. And as I said, for the average retailer, you might see a frequency of 4 or 5 conversions per year regardless of channel, let alone driven through the email channel. And so from the email channel, it might be one conversion a year. And so if you focus your 600 emails around trying to get that customer to convert exclusively on trying to get that customer to convert, pretending that they're always at the bottom of that conversion funnel, well, then you'll see an email diet that kind of looks like the American diet in the sense of being very rich in promotions and, you know, trying to take advantage of the buy right now sort of thing as opposed to telling the story and building the brand and taking the opportunity to educate the customers. L.L.Bean, one of our customers, said, this customer has only bought shirts from us. We're pretty sure they wear pants. You know? But if I use every email as an opportunity to try to sell them another shirt on a discount, I'm going to miss out on the chance of educating them about the pants and the socks and the shoes and all the other things that I sell. And so we need to use the balance between, okay. This customer hasn't purchased in a while. A promotion might be a good tool to try to get them to convert. Need to balance that with the reality that they're going to convert 5 or 6 times a year, and I'm going to get 500 at-bats to talk to them. And I need to be as broad as possible in terms of and still being relevant for them in order to, you know, keep the relationship and keep them opening the emails at a sufficient rate. If they don't open an email for nine months or something like that, I don't get to continue the conversation.

Mark Evans: The other thing that I think about when it comes to email is the idea that a lot of companies embrace a one size fits all approach, or what they do is they do a little bit of segmentation based on customer personas, and they believe that is the way that they can deliver relevant content and offers. But what I'm wondering about is if whether there's a better approach, whether we can use machine learning, for example, to deliver a personalized diet of content, as you say, content that is relevant to people's interests, their activities, what their buying behavior, all those other variables so that when you get an email from a company, you say to yourself, this is for me. It's aligned with who I am and what I do and what I like to buy. Is that kind of the promised land? Does it make customer personas anachronisms for that matter?

James Glover: When I think about this question, I kind of think of it in two respects. And often I'm talking to a large retailer, and they say to me, how do I get to kind of the stage where my program looks like some of the great programs that are out there? Your L.L.Bean's is a great example. How do I get my program to look like L.L.Bean's program? And I kind of break it down in two respects. In the first and I sort of use the first one as, like, slay the dragon and the second one as marry the princess. If I can slay the dragon, I get to go back home and marry the princess. What do I mean by that? So, you know, there are lots of things that I'm doing that just simply don't scale. And so a lot of the reason why I'm not providing relevant content to my customers is because I can't scale to the place where L.L.Bean is sending out 5,000,000 different versions of its email every day. How are they doing that? How do I scale to the place where I can have the infrastructure to send out 5,000,000, let alone knowing what each of those 5,000,000 people want for dinner tonight? But how do I serve 5,000,000 different meals to 5,000,000 different customers? And that's about having a library of content that's available. It used to be that folks like Bloomingdale's or others of our customers would create an email today, and they would send it out, and then that email would die. You know? Perfectly good creative investment and yet something that they would just let live for one day. Now they add it to a library that's building up over time. And so at any given time, there might be two or 300 options in the L.L.Bean or the Bloomingdale's library. So that's about how do I get better use out of my creative in order to scale to the place where I can have a personalized relevant conversation with the customer. And then there's the template. Standardizing the templates, making them ready for dynamic content. You know, there's a lot of work that goes into the idea, you know, if you thought about how would you QA 5,000,000 different emails, well, you'd have to standardize a bunch of different things and have templates that were ready for personalizing events. And so there's a lot of work that goes into the work that you would do with your email service provider in order to get you ready to be at a place where you could send 5,000,000 different emails. And what we found is that often, you know, when you're doing some segmentation and you're sending out six versions of the email in a relatively manual fashion, going from six versions to 5,000,000 versions, you're automating a ton of stuff that you used to do manually. And in fact, it's less labor. And so in this current economic climate, we see a lot of people driving towards automation as a way to reduce cost. And so if you can do that and put in an infrastructure that will enable you to send out 5,000,000 different versions of the email with less labor, we call that slaying the dragon. Now you're ready. And then, you know, the marry the princess is, okay. What is the how do I get to take advantage of this infrastructure to kind of get my program to the place where I'm having a relevant conversation with each customer? And that's the machine learning that is required where you're taking in all of the different information that you're getting from each of your different channels, and you're thinking about it as a diet through time. What we found is that if you rely on segmentation, you're very likely to overrepresent some of your categories while neglecting others. You know, a simple example of that, one of our retail partners, they would apply a label of women or men to each of their customers, and that seemed to make sense to them. But what we showed them was that if even with respect to gender, you approach it as a diet. So for, you know, this customer, it makes sense that about 90% of their content comes from the women's part of their catalog. But by sprinkling in 10% of the content as men's content at the right time of year and in the right when the right great piece of content comes along, you can do much better at keeping the conversation interesting and monetizing that customer to a greater extent. So by investing in that infrastructure, you get to be in the place where you can have a more engaged and personalized conversation with the customer.

Mark Evans: One of the things I did want to ask you is in terms of the current landscape amid COVID-19. So as consumers are not going to physical stores as often, a lot of retailers are pounding away on email to drive sales and inboxes are being overwhelmed. There seems to be this rising tide lifts all ships phenomena happening. So a lot of retailers are seeing higher ecommerce sales. But, hopefully, as we battle COVID-19 effectively and consumers sort of kind of return to normal buying activity, what happens to email marketing, and how do the stronger brands who can leverage email outflank the competition?

James Glover: I think there are a couple of things that are important from that perspective. So one of them is what we talked about in terms of building an infrastructure. You know, maybe you're doing it now for the purpose of reducing costs and automating a lot of your email campaign execution in the hopes of putting an infrastructure in place that will allow you to create dynamic emails that are one to one personalized at the scale of a Gap or L.L.Bean where there are 5,000,000 different versions. We talked about that. You can win this COVID-19 experience partly by reducing costs through automation, but that automation can put you in a position where you can send millions of different versions of the email. So that's the first thing. And then I think the second thing is recognizing that you are acquiring a lot of new customers, and, you know, your ability to win this circumstance will hinge upon whether or not you're able to continue the relationship with that customer. And so, you know, if when you only have one piece of transactional data from that customer, it's going to be awfully tempting to continuously reinforce that one category that they've purchased from you as opposed to a balanced diet that kind of presents your entire value proposition. So I think the companies that are smart will use that first transaction, and this is what we see folks like Bloomingdale's and Frontgate doing where, you know, they're getting a new customer, and they're using that new customer, that new relationship as an example or as an opportunity, sorry, to tell their story. These are all the great things we do at Frontgate, you know, and which of these are you interested in? Now they have a sense of who that person is and what kinds of products they're likely to be interested in based on what transaction data they have, and then that starts to build up through the interaction with the email channel as they explore the catalog in a dialogue through that email channel. So I think customers are companies that can leverage the opportunity to upgrade their infrastructure in order to be ready to come out of COVID-19 strong, and then companies that use those new customers that they're acquiring as opportunities to start a conversation rather than just to reinforce that one part of the catalog that they purchased in that first transaction.

Mark Evans: Well, this has been great insight, James. I really appreciate it. Thanks for listening to another episode of Marketing Spark. If you enjoyed the conversation, please leave a review, rate it, as well as subscribe via iTunes or your favorite podcast app. For show notes of today's conversation, visit markevans.ca/jamesglover. If you have questions, feedback, or would like to suggest a guest, or you're looking for help with B2B marketing, send an email to Mark@MarkEvans.ca. Talk to you next time.