Direct Email--Good or Evil?

One of the most misunderstood tools in the Marketer’s Bag of Tricks is direct email. There’s good reason for it, of course. Everyone hates SPAM! I expect that even the most evil, notorious spammers of the world have SPAM filters on their personal email accounts.

The end result of this universal distaste of SPAM is a belief, held by many, that sending emails to prospects or customers “just isn’t a good thing to do”. Lot’s of potential issues—from alienating your customers and potential users, to having some wacko attack and bring down your website, just because he doesn’t like the message sent to his in-box. So should we just forget about direct email as a legitimate marketing tactic, and spent our time and money focused on other aspects of the marketing mix?

I suggest not.

NOT ALL EMAIL IS CREATED EQUAL

Let’s step back and be rational here. First of all, not all direct email is the same. Let’s start with the “worst of” direct email campaigns:

Scenario #1

Bob’s Computer Stuff, Inc., buys “20 million email addresses for $99” from a SPAM email that they randomly received. Bob’s then fires off an email to the entire list with an offer for its extremely niche-y computer accessory, the “Swiss Army Computer Widget”. This is bad. Bob will be punished in quite a few ways, and probably deserves it.

Now let’s look at the “best of” direct email:

Scenario #2

Distinct Software Corp. has been methodically building a list of customers and prospects obtained using a variety of online and offline marketing methods, not the least of which is visits to the company’s website. The list has been carefully compiled, and in each case the client is either doing business with Distinct or has expressly given permission to receive email. Distinct has decided it would like to launch its new IT software product, with a special offer to targeted prospects. The company mines it’s database for prospects that meet the targeted customer profile for the new product. It supplements it’s own list by renting an opt-in email list from a broker, that was compiled from subscribers to a magazine that covers issues related to the new product. Distinct then puts together a classic direct response offer (discounted product, money-back guarantee, free gift, time-limited). The company crafts a short email message describing the special offer, careful to adhere to the rules of the CAN-SPAM Act, and other applicable state or international laws. The company sends it out its offer to the target list it has compiled, as one component of the marketing mix for its new product launch.

IS IT SPAM?

Do you really think that these two scenarios have anything in common? In actuality, the only thing they have in common is the delivery mechanism—email. Yet it’s very common for these two very different activities to be lumped together in one basket. It’s all SPAM, many people will say.

I beg to differ. One is terrible marketing, the other is classic marketing. BAD, scattershot marketing is almost always poorly received, and GOOD, targeted marketing will only offend the zealots out there who are offended by ALL forms of marketing. This is true regardless of the delivery mechanism. There are people who hate traditional direct mail, unsolicited phone calls, advertising on TV, people with flyers at the shopping mall, even print ads that take up 2/3 of their favorite magazine. There’s nothing you can do about them. The only way to please these folks is to go out of business, so we don’t worry about them. Don’t let the crazy few stop your business from being successful.

GREAT FOR “OBJECTIVE” MARKETING DECISIONS

There are many reasons NOT to do direct email. One of the most important is that it's easy to do, so it is a very crowded medium (thus "SPAM). But there's a lot of great reasons to try it, as well.

One of the best is its ability to add “objectivity” to the marketing process. Marketing, especially to a high tech audience, is both art and science. It’s best when you can tilt toward more science than art, but with new products and offers, it often tends to be primarily art. How are new product prices usually set, for example? Well, a few objective things are usually done, like a quick look at competitors price, but mostly, somebody with decision making power just picks a price out of the air that looks good to them. It may be a good price, it may not be, but there it is.

The beauty of direct marketing is that you can OBJECTIVELY test until you come up with the “right” price. Divide the list up into modules, keep all other elements of the offer static, and use a different price for each module. If you use statistically significant samples, YOU WILL converge on the price that yields the greatest profit. That’s a rare and valuable thing to a marketer in high tech, where things change so fast, and are often so squishy, that it’s sometimes hard to tell which end is up. And you can do this with any elements of your offer, simply by keeping everything but your test element static, and using the “module” approach to test different “sizes” of that element.

Of course you can do this with any direct form of marketing, but direct email adds the important ability to do your testing faster. You can test and revise, test and revise, almost in real time, quickly converging on your optimal offer for the market. This is very powerful, and the results can then used to optimize other marketing activities in the mix. It really enables you to switch from subjective guessing to objective decision-making, which could well mean the difference between success and failure in a competitive market.


IT’S ONLY SPAM IF YOUR AUDIENCE ISN'T INTERESTED

If your offer is targeted at the appropriate people, it provides benefits for them, and you deliver your message in a legal manner, you will have very few problems. The closer it comes to a “one to one” message, and the farther from a mass message, the fewer problems you will have.

IF DONE RIGHT, VERY FEW COMPLAINTS

I have conducted many direct marketing campaigns over the years, including quite a few direct email campaigns. The most telling is a most personal campaign I have used over the years. Prior to starting my consulting practice, I used this technique in job searches, as well as to reach out to potential customers when I worked as an employee. Since I have started my consulting practice, I have used it with great success as well. I send email messages directly to CEOs of target companies. The messages are extremely “one to one”, tailored to the company and person I am sending it to, and the target is always chosen to be a close fit with whatever I my “offer” has been at the time (A potential senior executive, a product that I knew the potential client could use, my consulting services).

I have been using this technique literally since the beginning of commercial use of the Internet. I have had exactly ONE complaint since I started using this approach. The gentleman who complained—I actually knew. I had previously had a personal meeting with him, and he handed me his business card himself! Needless to say, most people thought this guy was a real jerk! A few people over the years have asked that I “take their name off of my list”. I always do—anyone that requests it, never hears from me again. But not many have made this request. A lot of non-responses, a lot of polite no thanks, and many, many requests for meeting that have led to a successful outcome for both the addressee and myself. But literally no complaints save the one “exception that proves the rule.”

THE BOTTOM LINE

My basic message is don’t let fear stop you from using Direct Email effectively as part of your marketing mix. Maybe it makes sense for your particular situation, maybe it doesn’t. But don’t let fear of persecution and alienation rule it out. If done properly, it is often a profitable, efficient, and very effective method of reaching your target audience. Just remember to live by the rules:

DIRECT EMAIL RULES

Only email to a targeted audience
Craft an offer that is very appealing to your target list
Do extensive testing, for objective analysis of each element of your offer
Always be honest, never deceitful
Use an opt-in or in-house list only
Always make it easy for addresses to opt out
Never send additional messages to those that opt out
Include your physical address and phone number in all messages
Don’t overdue it—send messages sparingly, only when you have something important to offer or communicate
No more than monthly messages in most cases, less frequently is usually better

So that’s it! Email is a controversial and often emotional issue for many people. I look forward to hear what you all have to say.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

Search Engine Blog

For those of you interested in Search Engines and their businesses, I'd like to recommend John Battelle's SearchBlog. Probably a little advanced for the casual reader, it is an excellent source of information on what's happening in the business of Search. John's been writing a book entitled: "The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture". It's available next month and looks to be an interesting read. I plan on picking up a copy!

Phil Morettini
PJM Consulting
www.pjmconsult.com

Software Product Development—the Unsolved Mystery of High Tech

One of the most puzzling things in high technology, especially for executives on the business side of things, is the software development process. It’s the high tech equivalent to the “Black Hole” phenomenon made famous in Astronomy. Endless resources can be poured into a software development project, yet there never seems to be an end in sight. Monitoring the progress of a software project can be like peering into the darkness of a seemingly bottomless pit.

And why is this so? It seems that in such a typically high tech, yet now familiar activity, we would have long ago figured it out. We’re in an age where PCs, with the power of supercomputers from just a few years back, are slapped together like bicycles, and don’t cost much more than a bike. You would think that the process of software development would, by now, amount to simply turning a crank—yet it seems it hasn’t advanced much since the dawn of the PC age.

I don’t mean to be overly dramatic here. But I have been in the high tech and software industries since 1983, and I have never been involved with—or even personally known of a software project—that came in on time and under budget. Never. Not even ONCE. That’s pretty incredible. Now, I realize that there are almost certainly examples of on-schedule projects out there, but they are in the overwhelming minority of all software that is developed.

THEY ALWAYS SLIP

It’s just accepted in the software business that projects will slip, particularly when the end result is an actual commercial product. The businesses I’ve been involved in have tried everything. When I’ve had direct responsibility, we’ve taken every approach imaginable. We’ve tried an approach of “No upfront planning”—starting coding as soon as possible. We’ve tried “extensive and laborious upfront planning”—with a detailed spec, and a prototype, completed prior to initiating production coding. I’ve seen many projects that tried using intermediate steps, falling between the two extreme approaches above. We’ve tried to start projects by purchasing as many “pre-written” modules as possible, used various languages and platforms, hired dedicated debugging personnel, tried code-generators, assembled both small teams & large teams, you name it—we’ve tried it. Project schedules have been written with the utmost conservatism, at the insistence of senior management. No matter. Across a number of different companies, EVERY project has slipped out beyond the wildest nightmares or everyone involved.

ONE LINE OF CODE, TWO WEEK DELAY

Once I asked our lead programmer to change ONE LINE OF CODE in a well-established product. He estimated it would take just a few seconds to make the change, and a few hours to test it. The change would be final by the end of the day, at the latest. Two weeks later I was still waiting for a solid product.

Now, don’t misunderstand. I’m not writing this to bash software developers. While not every developer I’ve worked with over the years has been a world-beater, I’ve had the fortune to work with quite a number whom I consider to be outstanding. Many have been extremely bright, dedicated and hard working. But no matter how much thought, time and effort went into it, our projects always slipped. A lot. We usually ended up with a commercially successful product, but how much better we could have done, had we figured out a way to bring the product to market on time? The only saving grace was the competition had the same problem.

MORE ART THAN SCIENCE

The reason, I believe, is that writing software remains much more of an art than a science. This statement is a bit surprising, until you look a little deeper. There is certainly much methodology available to guide a team to use sound, time-tested practices in developing software. However, a software program is really just a document written in a foreign language. That’s why C++ and Java are called Programming Languages. It's also interesting that many programmers who aren't classically trained in computer science come from an English, Music, or other language background. Just like in writing a novel you are guided by syntax, grammer and writing rules, writing a software program is very similar. In writing a novel you are essentially creating a unique work that has never been done quite the same way before. Also true for a software program. If you knew exactly how the writing of a novel or software program would go before you began, there would be no need to write it—it would have already been done. While there are plenty of rules (representing the science) to writing good software, at the end of the day it’s a unique, written creation (the art).

COMPLEXITY OVERWHELMS EXPERIENCE

Another key reason why conquering the software development process has appeared to be impossible, is the vastly increased complexity associated with software projects today. Let’s face it, the average piece of software today does a lot more, and is quite a larger in terms of the number of lines of code, than at the dawn of the PC era. The creation of graphical user interfaces really started the explosion in the size of software code. So much more code is needed, to bring the user-friendly products of today to life. And what enabled this, of course, was the dawn of the modern operating systems, especially the overcoming of the 640K limit that the original DOS operating system required PC programs to run in. Windows and other modern operating systems almost eliminated the need to write software efficiently, at least from a code size perspective. Today the embedded systems world is pretty much the last bastion where writing code efficiently lives on—it’s pretty much a lost art to most of the software world. It’s interesting to speculate—if we were still writing in the 640K box, would software development have evolved to a more predictable science today? Maybe, but the world would be a less productive as a result.

WHAT TO DO FROM A BUSINESS PERSPECTIVE?

As you can tell from this discussion, I don’t have a great set of answers on how to bring software to market on time. It’s one of the great frustrations of my career. I still strongly believe that getting the best people you can get will make the problem better, even if it can’t be solved completely. I also believe in keeping development teams small, with the minimum of structure necessary to run the project. It’s also wise, in my opinion, to structure your product releases to be more frequent, while adding fewer new features per release. This should at least minimize the pain of each release slipping, since the slip time of each release should be less. And knowing what you’re going to be coding, developing a spec document and sticking to it (no feature creep!) is also sound practice, although I’ve found it to be no panacea. Beyond that, I’m at a loss. Maybe one of you has a strong opinion on how to bring projects out on time? If so, post a comment—this is a discussion worth having.

Phil Morettini
PJM Consulting
www.pjmconsult.com

VC Blog

For those of you in early stage companies looking for funding, I wanted to let you know about an excellent site I have run across. It's Allen Morgan's Blog (http://allensblog.typepad.com/allens_blog/). Allen is a venture capitalist with Mayfield, one of the premier VC firms in Silicon Valley. I don't know him personally, but his Blog is full of honest, informative information on a topic which usually only discussed "on the surface", with a lot of typecasting. Allen gives an "under the covers" look at VCs and the funding process. It's a very informative and interesting read. I highly recommend it.

Phil Morettini
PJM Consulting
www.pjmconsult.com