I thought I'd resurrect a column from the past and see how accurate my predictions were.   Roll your calendars back to July, 2006, when I wrote a column on "The Future of Email." I quoted from an article by Paul Gillin, "New Technology, New Media and New Paradigm," that had just appeared in  BtoB magazine: 
 
"We hear a lot about blogs, but blogs aren't important. What's important is personal publishing, or the ability to communicate a message to a global audience almost instantaneously. Personal publishing will permeate electronic media, providing counterpoint to mainstream sources and adding depth and color to the conversation.

"We hear a lot about podcasts, but podcasts aren't important. What's important is time-shifted media. The phenomenon that started with TiVo has spread to digital audio and will soon capture portable video. Information consumers will no longer be beholden to program schedules or even their living rooms. Our TV shows will travel with us.

"We hear a lot about RSS, but RSS isn't important. What's important is the ability to subscribe to information that really interests us. RSS is mainly used to subscribe to blog posts and podcasts. But in the future, they will use it to subscribe to ideas."

Then I continued: "So, as someone who aspires to effect a change in the paradigm of digital communications and consumer behavior, I put my spin on the future of email using this same logic. I conclude that we hear a lot about email, but email isn't important. What's important is our ability to communicate in a synchronous and asynchronous fashion in a mixed media world. Email will be our notification agent, alarm clock, Post-it Note, pager, cell phone, fax machine, instant messenger, and document management system all combined. It will be supported on any device via many different sources."

I was suggesting that email will evolve and people will develop their own digital signature, voice, personalities, behaviors and preferences, all of which will lead to the customization of the devices and communication patterns. There will be a blur as to what e-mail, RSS and mobile messaging are to the consumer.

Roll forward the calendar and it's 2010.  It seems the challenges we had in making email more effective as a marketing tool are virtually the same: SPAM, deliverability, email's viability as a channel, technology and data challenges.  So, what's changed -- and where will it go in the future?

The thing that has changed the most in our space is awareness:  while email alone gets only a small piece of the pie, organizations have readily admitted that email is critical to customer engagement. Then there's governance. While not many organizations have faced the wrath of the Federal Trade Commission or state governments, there is much more awareness of consumer rights to privacy and respect for permission. There is a much stronger governance in the use of email and database marketing. 

I see amazing progress in the next five years, specifically the speed at which data is made available to fulfill the many needs of a marketing and sales organization.  I see real-time modeling trumping sequenced messaging.  I see dynamic ad presentation that shifts with real-time buying patterns, self-learning models and in-market advertising.

I also see the inbox morphing to be a simpler thing to manage all in one interface. This will allow all the functional values of email to survive. I see the allure of "social" as a cheap viral tool, changing how we build containers for our message.  I see our view of customer value changing to accommodate direct and indirect, synchronous and asynchronous.   I still see email as a critical spoke in your time management hub and spoke system. and the business will not move away fast enough to trump. 

As the history of communication began with simple flashes of information, email will become more of a communication tool, as it was designed to be initially, and less of an information tool.  Watch out, publishers, this will put increased demand on how you evolve your reader bases, how you monetize your lists and how engaged consumers will be in the inbox with reading anything but 400-character chunks.  There is brilliance in the concept of Twitter and microblogging, and I see email returning to the core of this communication chain, at least from a personal prospective.

While the hub may not be your laptop or desktop in 5 years, it will be a super portable device, with amazing memory and connections to your community tools.   Hang tight, all major technological advances in mankind have an impact on "time" and "space" -- so our next generation of email may be so convenient it's not even called email.  
 
 

        

Great article by Loren McDonald in the Email Insider:  Google Buzz

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=122321 

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What's the Buzz? It's Google's effort to weld social networking and content sharing onto its Gmail email service. It also poses the latest challenge for marketers to stay relevant and visible in the inbox.

Buzz, which Google is rolling out now to Gmail inboxes, incorporates status updates and shared content such as photos, video and links from people on the user's contact list into the inbox.

Buzz: Game-Changer or the Next Wave?

In its first few days, Buzz has generated plenty of, well, buzz, ranging from game-changer predictions to jaded shrugs.

It won't change the email game immediately, the way Gmail itself did since its 2004 launch. But it could have Gmail-like growth, grabbing market share slowly and surely, giving it a huge base of regular users in three to four years. (Gmail email addresses now likely account for about 10% to 15% of a typical B-to-C list and up to 25% for newer lists.)

Buzz likely has greater adoption potential than other Google initiatives such as Wave, which generated a lot of initial buzz but limited adoption. Among Buzz's plusses: 

• It leverages existing features, including your Gmail contact list and inbox. Buzz auto-follows your closest contacts to give you an immediate follow list and delivers fresh content alerts to your message inbox.
• Users can toggle links to move between the message and Buzz content lists.
• Buzz connects other Google properties, such as Picasa, Google Reader and YouTube, to the Google profiles of people you follow, and to your Twitter stream if you opt to connect. (No Facebook Connect function yet.)
• Users don't have to learn a new protocol of interaction, because Buzz incorporates familiar features of other social-networking platforms: like/unlike, share via email, comment on other posts and "at" replies.
• It aggressively filters content so that "less-valuable" posts ("me too" or "nite peeps" posts) get collapsed at the bottom of the viewing window, leaving more room for theoretically meatier posts.
• Lastly, one of the more interesting aspects of Buzz is that many of your Gmail contacts are likely "true" friends and relatives, many of whom you may not be connected to in other networks.

Rising to the Challenge of Inboxes Gone Social

Although it's too early in the game to predict how Google Buzz will affect Gmail use, this broader encroachment of social conversations into the email stream is clearly the future, with the following implications for email marketers:

Email inbox interfaces are getting busier. Besides Gmail, email clients including Xobni and Outlook, and Webmail services such as Yahoo have expanded inbox functionality. Yahoo recently added inline chat, a beefed-up calendar and links to Flickr and PayPal. These functions are designed to integrate with and complement email, but they can also distract the user from reading email.

The inbox itself will be more crowded. Buzz will send alerts whenever friends post fresh content. If your recipient is an exceptionally busy social networker, these alerts will push your email-marketing messages farther away from the fresh-content sweet spot.

How to respond to the Buzz factor:

1. Work harder to get your sending email address added to recipients' contact lists or address books.

2. Brand your "from" and subject lines. This helps your messages stand out from the onslaught of Buzz message alerts.

3. One-to-one messaging must replace one-to-many broadcasts. Personalization that reflects preferences and buying history, triggered emails and value-added transactional emails will compete better with Buzz's highly relevant message alerts.

Wrapping Up

It's your turn now. Do you think Buzz is more likely to gain traction than Wave because it leverages an existing inbox, contact list and Google services that millions of consumers already know about?

Until next time, take it up a notch!
 

        

Three numbers: 90/10/0. 90 is the percent of time that email marketers spend on the tactics of getting an email campaign out the door. 10 is the percent of time that is spent in reporting and analysis. 0 is the amount of time most marketers spend figuring out how to optimize a program. The key to optimization is understanding what is maneuverable and weighing this with the expected return. If the return is too small, you’ll never build continuity over time. If the effort is far too complex or time consuming, it will compete with the day-to-day operations and ultimately drive your business down.

The keys to creating actionable insights is best described through these metaphors:

1. Simplify the Cockpit Instruments. If you’ve ever looked inside an aircraft cockpit, it is in many cases synonymous to business process and analytics; confusing if you try to take it all in at once. While the marketer, much like the pilot, may know all the panels and instruments and the outputs of each, it becomes increasingly difficult to marketers to know which instruments to monitor, which to tweak, and in what order. To simply the instruments, you have to strip it down by what insights each variable or output informs. Think RFM. While it’s directional in theory, I do want to index high frequency purchase segments and keep a pulse on these campaign over campaign, program over program. I want to know the high cart value transactors and index them to understand timing and how offers/pricing impacts these behaviors. I want to understand how these segments interact with my site and model this against other front of the funnel behaviors. All in all, I want an instrument panel that helps me understand transactional behaviors and how this channel influences this.
   
2. Shake the Magic “8 Ball.” As I’ve said many times, marketing and business is a process of hedging bets on what you think will work. In the eCRM space, the tactics have been done over and over again for years, so there really isn’t some magic bullet that works for everyone. I think you should create your own “Magic 8 Ball” for marketing decisions. Just ask a question, shake the 8-Ball and the following options will come forth: “Go with your first instinct.” “Ask your best engineer.” “Reference your benchmark guide.” “Do what you did last year.” “Ask someone that knows nothing about email.” And “Shake it again.” The magic of great marketing is making decisions faster than someone else, so you can maximize in-market. You can’t do this, unless you have strong hypotheses about the outcomes. The problem with many is we wait for data before we make decisions. This only works if you are a really fluid organization. If your reports take two weeks to produce, then your data supply chain or outputs are too complex and need to be revisited. But that shouldn’t preclude you from making in-market decisions. Just shake the “8-Ball” when in doubt.
   
3. Become a Finance and Risk Manager for a day. In finance, actionable analytics are a vital forensic and forecasting tool which helps assess the implications of past performance and model future implications. Take a day per month and run analysis of performance, costs, process assessment, and vendor analysis and pull these variables together. By removing your marketing hat, you can take a clear picture of the finances of your business unit and the marketing function and assess which attributes are most important. What is your real cost to send an email? What would happen if you wanted to modify the conversion process on your site, what is the potential risk? What if you wanted to hold out a group for testing? What is the impact of that hold-out ? What costs would apply putting some of your hypothesis in action? What is the cost /benefit of outsourcing some of these activities?

Actionable insights can be realized but only if you understand the gaps in your data supply change, you are willing to take “action” on your hypothesis, you have a financial foundation to support your logic and you have an understanding of the risk involved.

        

From Seth's Blog by Seth Godin

In the face of significant change and opportunity, people are often one of the three. If you're going to be of assistance, it helps to know which one.

Uninformed people need information and insight in order to figure out what to do next. They are approaching the problem with optimism and calm, but they need to be taught. Uninformed is not a pejorative term, it's a temporary state.

Clueless people don't know what to do and they don't know that they don't know what to do. They don't know the right questions to ask. Giving them instructions is insufficient. First, they need to be sold on what the platform even looks like.

And frightened people will resist any help you can give them, and they will blame you for the stress the change is causing. Scared people like to shoot the messenger. Duck.

The worst kind of frightened person is one with power. Someone in a mob of other frightened people, someone with a gun, someone who is the CEO. When confronted with a scared CEO, time to run. Before someone can change, they have to learn, and before they learn, they have to cease being scared.

One reason so many big ideas come from small organizations is that there is far less fear of change at the top. One mistake board members and shareholders make is that they reward the scared but hyper-confident CEO, instead of calling him on the carpet as he rages at change.

When I first encountered surfing, I was scared of it. It looks cool, but an old guy like me can get hurt. A patient instructor allayed my fears until I was willing to get started. When you first start out, the things you think are important are actually irrelevant, and it's the stuff you don't know is important that gets you thrown into the ocean. Finally, and only then, was I smart enough to actually learn.

I'm bad at surfing now, but at least I know why.

Comfort the frightened, coach the clueless and teach the uninformed.

        

Industry Veteran to focus on CRM Technology and Innovation

John Zell brings to Razorfish a senior-level perspective on technology that will support our growth as a digital CRM agency. With his extensive experience and thought leadership in the CRM space, John will be a key leader in developing the next evolution of products and solutions for our clients.  

Our CRM business is thriving in today's market. Businesses are burdened with a very complex mix of technology platforms, data sets and coordinated cross-channel customer engagement. John will be a tremendous influence integrating traditional CRM solutions with Social Relationship Marketing (SRM).

San Francisco, CA -- February 3, 2010 -- Razorfish, one of the world's largest digital agencies, has hired John Zell, a 20-year marketing and technology industry veteran, as vice president of Customer Relationship Technology Solutions. He joins the Razorfish national CRM practice and will help drive the growth of CRM platform and data solutions throughout the Razorfish client base. 

Zell, based in the Razorfish San Francisco office, will lead CRM technology innovation and the development of integrated data solutions.

Zell joins Razorfish from Protocol Inc., where he was senior vice president and chief technology officer of Integrated Marketing Services. Prior to Protocol, he was senior vice president of Marketing Services at Harte-Hanks for 10 years, where he was instrumental in building enterprise data solutions and business intelligence for hundreds of large organizations.

David Baker, Razorfish vice president of CRM Solutions, said, "John brings to Razorfish a senior-level perspective on technology that will support our growth as a digital CRM agency. With his extensive experience and thought leadership in the CRM space, John will be a key leader in developing the next evolution of products and solutions for our clients."

The Razorfish CRM practice is a centralized, cross-functional team of experts who support the innovation, and delivery of enterprise CRM programs. Baker said, "Our CRM business is thriving in today's market. Businesses are burdened with a very complex mix of technology platforms, data sets and coordinated cross-channel customer engagement. John will be a tremendous influence integrating traditional CRM solutions with Social Relationship Marketing (SRM)."

Zell joined Razorfish February 1. His role is national in scope, spanning nine U.S. offices.

About Razorfish
Razorfish creates experiences that build businesses. As one of the largest interactive marketing and technology companies in the world, Razorfish helps its clients build better brands by delivering business results through customer experiences. Razorfish combines the best thought leadership of the consulting world with the leading capabilities of the marketing services industry to support our clients' business needs, such as launching new products, repositioning a brand or participating in the social world. With a demonstrated commitment to innovation, Razorfish continues to cultivate our expertise in Social Influence Marketing, emerging media, creative design, analytics, technology and user experience. Razorfish has offices in markets across the United States, and in Australia, China, France, Germany, Japan, Spain and the United Kingdom. Clients include Carnival Cruise Lines, MillerCoors, Levi Strauss & Co., McDonald's and Starwood Hotels. Razorfish is part of the Publicis Groupe (Euronext Paris: FR0000130577) VivaKi organization. Visit www.razorfish.com for more information. Follow Razorfish on Twitter at @razorfish.

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As Abraham Lincoln said, "I walk slowly, but I don't walk backwards."  We've made amazing strides in the email and marketing automation space with regard to our strategic thinking, technology advances and how we link disparate technologies to solve problems -- but have organizations followed our lead?  Looking back over the years, I find there is a natural progression to how people use email and the relative complexity of implementing ideas and the costs/risks and ROI of these activities. 

 I've used this sliding scale for years to illustrate where a company is today, what they hope to achieve so we don't get lost in some high-level-growth goal associated with "creating 1:1 dialogues" that are very hard to attain.   The hierarchy of optimization is best illustrated by the following areas,  beginning with the bottom and migrating upwards with increasing levels of investment to optimize, with potentially higher return on the activities.

1.       Acquisition:  historic list growth, customer touch-points, file aging and list cross-over activities usually fill this area of optimization, all associated with better understanding the value of a new customer/lead and how we interact at the front-end of the funnel.. 

2.       Deliverability: All the basic elements we do day in and day out: domain analysis, ISP relations, list hygiene.  With the maturation of the lists we have in play today and the increasing discrepancies of the ISPs' practices, this has increasingly become a mission-critical area we don't talk about enough, test enough or have enough resources to support.  Most companies could use a good "review" by a deliverability expert once a year.

3.       Interest Generation:  Today we could call this "engagement." It includes offer selection, creative/copy testing, frequency, subject line testing, and  preference center design -- anything that supports understanding customers' intent and how to reach them. 

4.       Personalization and targeting: We speak a lot about this, but most think it's the infusion of personalization in a subject line or body copy.  It's not!   Personalization is both an email and company-wide initiative that is far more complex than an email.  It includes data integration, geo/demo overlays, triggered messaging behavioral messaging, site/email and messaging - and, of course, integration of share components.

5.       Segmentation:  The farther we get into segmentation, the more complicated and intertwined it becomes.  Behavioral segmentation, attitudinal overlays, MVC analysis, RFM strategy, longitudinal response, and cross-channel testing all present challenges for companies to optimize in channel and cross channel. 

6.       Conversion Efficiency:  Places more pressure on your ability to measure to conversion and control some of the variables responsible for supporting a sale - for example,  offer targeting, timing, sequenced messaging, and remarketing, path to conversion

7.       Cross-Sell - Upsell:   This presents the finest opportunity.  It means you have intelligence on what and why customer buy, and some predictive measures in place to assess risk to market to certain segments and the potential outcomes associated with the market.  These activities include: list overlap analysis, cross-product affinities, customer lifecycle, predictive modeling, campaign decision trees -- all of which support "decisions" and "migration."

While every company has a slightly different view and classification, by looking at this through an evolutionary view you can assess where you fit on this scale and what you hope to evolve to over time. In large companies, it can be difficult to organize around this progression. In small companies, it can be difficult to grasp the scale of return on some. But remember this: the vehicle you're riding in (train/car) may be going 60 MPH, but are you sitting still during this ride?

        

A dialog is a conversational exchange between two or more people. Communication in the rawest form requires information to be packaged and imparted by the sender to a receiver via some medium. The receiver must decode the message and give the sender feedback. Communication requires that all parties have an area of communicative commonality.

When I go with the flow and throw out the proverbial "we want to develop a dialog with the customer," is it really a dialog I mean? Are we really communicating with the customer -- or just throwing spaghetti against the wall and hoping it sticks?

Aside from in-person connections and synchronous exchanges, we really don't communicate with the customer. We interpret response to stimuli! As poorly as most online surveys are constructed, I'd question whether that is really a form of communication.

In the marketing and digital world we change the definition of both dialog and communication to some degree. For instance, an online poll is a way of gathering feedback on a particular single or cumulative experience. But is it a dialog? Is a welcome email series a dialog?

Think about the brands you are most loyal to. It may be Starbucks, because you are the nut, like me, that spends far too much on $4 lattes twice a day. It may be the dry cleaner to whom you trust your third most important asset: clothes. House and cars usually precede this. It may be the Lexus or BMW. It may be the chain restaurant like Macaroni Grill where there is no denying the consistency you'll receive each time you visit. Or better yet, if you are a traveler like me, the airline, hotel or car rental company where you live 30% of your life.

When was the last BMW ad you recall on a Web site? Or email you've opened from your local dealership? How many direct connections can you recall with your most engaged brands? Loyalty is a funny thing, driven by habits. In order to replace loyalty to a brand, you must break a habit and form a new habit. It doesn't happen overnight, unless there is a great deal of motivation driving this change. And brand dialogs connect these experiences with these core values.

The most impressive brands make connections through many forms of stimuli and reinforce experiences through many media, email included. I now receive an email communication from my dry cleaner asking me if I was satisfied with their service after they drop off my clothes each week. It doesn't include a coupon. (Yes, I pay $6 to starch and press a shirt in California.)

I receive continual communications from BMW from all points, including the dealership asking me to assess my experience when I bring in my car for service. Ironically, they do this as a performance assessment for their service agents, usually preceded with a call from the agent asking me to give him/her a high ranking as her bonus is dependent on this rating. But I also receive local promotions and test drive events. Since my lease is up for renewal in a few months, I've seen a dramatic increase in communications from BMW marketing and my local dealer/salesperson.

The key to these connections, my loyalty and purchase persistence is: each brand provides continuity to the experience through many channels. While I might survive on just the dining experience at a hotel and the value of the 900,000 miles I have with American Airlines, it's digital communications that keep me close to the brands I most covet.

Now, look in your inbox -- and more importantly, at the products and services you buy -- and assess how you are using digital dialogs to build continuity with your customers. Do you regularly check their pulse? Do you use key experiences to trigger a reason to communicate? Do you reinforce buying experiences? Do you choose lifestage and other critical consumer events to stay in front of the customer? Is your brand goal and customer experience symmetrical?

As I've said many times, email will inform, educate and inspire. It will help you build social connections through brands and experiences, it will entice consumers to buy something -- possibly more often than they normally would have without this stimuli.

Key to great dialogs is a commitment to the small things without losing sight of the customer. Far too many times, we, as marketers, lose sight of this connection and the value we bring through asynchronous channels like email. Your customer isn't an "@" sign.

        

As I’ve said for years, “if you shoot for the stars, you’ll land on the barn; if you shoot for the barn, you’ll land in the pig pile.” Are we shooting high enough when building, planning and executing our eCRM programs? Do we get enough recognition for the contributions of our email program? Are we doing enough to drive excitement for our contributions? Let’s think about this. Most businesses will project a modest growth in revenue and profit and with that comes a modest increase in marketing spend. Yet that distribution doesn’t always funnel down to the email channel. How many of you had growth for years as a business, but your budgets for email were cut or remained stagnant?

I believe there are three reasons why we’ll remain an under-funded channel for 2010.

Most programs need to improve basic executions and operations and that’s not sexy. Email is 80% operational and 20% strategic thinking. An incremental improvement in operational elements will go a long way in opening the door to doing more complex implementations. Some of this could be related to technology, some related to your production model (in-source vs. outsource) and some related to where you reside on the “urgency scale.” Do you operate in red-lined mode all the time? If you do, you are likely woefully inefficient and no technology will change that. You have to show operational responsibility, how you are growing with what you have, and how you plan to scale that over time. Some of it is simply looking closely at your operations with an efficiency mind, not a direct response mind.

Email is an enterprise communication channel with bad PR. No longer is email viewed in the same manner as Search and Media in the front of the funnel. It is still not really seen as a relationship builder in the bottom of the funnel. While we like to speak of email as a relationship marketing tool, that is all it is – a tool – and it doesn’t work alone. It is a support mechanism and a service to the customer. Let’s not forget the fundamental value of why businesses use email – it is more cost-effective than a phone call or ad. Unfortunately, we all consume email, so we all have our own perspective as a consumer of commercial email, and consumer perception of email usually trumps the marketer’s view. So, it will always skewed by our personal perceptions of the value, and budgeting will be affected. Even though CMOs recognize the value of email, don’t ever forget they likely have a very negative perception of it as a relationship-building vehicle. It’s a cheap convenience to a business for staying in touch and top of mind with a consumer. This perception must change and better stories of consumer experiences and consumer feedback must accompany the culture. Look at Daily Candy: their entire business was predicated on email and great stories of local connections. How many of your businesses or clients can say the same and see a real personal connection with your customers through email?

Think small, live small. You have to develop BEHAGs (Big, Enormous, Hairy, Audacious, Goals). These are the ones that will change the world and the fabric of your business. They should be lofty, should gain attention and you should be bold enough to resonate with all levels. If you continue to think small, think channel alone and not contribute to the vision and changing of the world or better yet your business, you’ll always be relegated to limited budgets and share of voice. No one cares about response rates, (except you) and no one is impressed with modest list growth numbers, but you will get attention if you project to “Own the Point of Intermediation.” Own the connections, the digital experiences and dialogs at the beginning and end of the funnel. Be the connection between Advertising and Brand Experiences.

Email is simple! As I’ve said many times before, we aren’t doing anything today that we didn’t do ten years ago. The visibility of the channel has risen amongst senior executives. Now we need to shift their view of the real contributions it makes to a business, and simple, in this case, isn’t the best way to do that.

        

Welcome to 2010!   It's the beginning of the year, and I don't feel complete without laying out some lofty predictions.   2009 has been an interesting year on many levels: the economy, financial systems, jobs, wars, a new president.  From an online marketing perspective, it was a nice end to the year.  Online sales were up this holiday season, and consumers seem to be a little more positive about spending. 

Our industry has had an interesting time this year, as well.  Email has a great ROI and budgets for email are increasing slightly.  How would I grade 2009?

Technology and Innovation:   Grade:  B-   I didn't see any dramatic innovation in the email channel in 2009, nor did I see companies invest that heavily in email platforms.  While many platforms have evolved and are certainly more sophisticated today, I wasn't that impressed with any major product launches in 2010 that stretched our use of the channel or capabilities.  There was some innovation within marketing automation players, but none was earth shattering. It was more a process of reaching parity with some of the long-time ESPs.

Investment: Grade:  C+.  Aside from ExactTarget's rounds of funding, it's been a rather slow year, with only a few small acquisitions.  No major moves in the space.  There's been talk of a few ESPs and IPOs, but little movement in the M&A area and little investment in these companies.  Best described as a year of survival.  

Integration of Email with other channels: Grade: B.  This wasn't the year of mobile.  We are still talking about mobile in the same context as 2008.  This was a year of social!  While technology innovation and data integration with social efforts is still in its infancy, more agencies are pressing the platforms and organizations to combine social marketing with relationship marketing and email.  Yet aside from share to social, no major strides in combining measurement platforms with email. 

I do think 2010 has a lot of potential for this channel.  We have survived the times.  The strong companies are still around, and the small companies are still surviving.   I predict the following:

Social relationship marketing -- I'm a firm believer that social behavioral data will be as valuable to us as cookie-level data is to targeting and site side personalization.  The major data providers will combine this view with household level data and contextual sharing to offer marketers a broader view of the consumer and how they interact through their networks.  Along with a long-tail view of the consumer and growing databases, it will force marketers and service providers to innovate and take some risks in this area. 

Predicting the Consumer:   We've been doing the same things for 10+ years.  Same strategies, same approaches and seem to be recycling things.  The next generation must develop some predictive nature to our programs.  Who is likely to be a long-time subscriber?  What triggers will help predict engagement through the email channel?  What triggers in early lifecycle will predict higher engagement value?  What is the threshold to discounting and price elasticity and how does the email channel influence this?  What cross channels are best to build the most valuable experience and relationship?   

We will hear more about predictive targeting and communication planning, rather than mass personalization and dynamic content this year.  Those are means of doing things, but we need more thinking in "what if" scenarios to really add more value through the channel.

CPM Commoditization:  We are already seeing the price of sending email shrinking.  I believe we'll see more of this in 2010.  The platforms can mostly do whatever you need to do -- and the service level support from the ESPs will be an expectation, not a value add.  Thus, CPMs will decline and in some forms become a commodity that is highly negotiated.  Consider that 30% of companies will switch ESPs in the next year; this will create a natural competitive flow to this pricing.

Data Privacy:  We, as consumers, will completely freak out when we realize what information is available about us for anyone that wants to buy it.  While I see great value in this data from a marketing side, there will be consumer backlash in controls of online social data that will be the buzz in the last half of 2010. 

        

Why is it you only hear about pay per performance (PPP) when it comes to online advertising and customer acquisition?  This concept grew out of the online advertising world.  In the past you'd just spend and hope your ad units drove customer sales.  It was all about the big idea and reach.   We've since evolved into a world of performance models in acquisition.   We pay for clicks, we pay for impressions, we pay for leads and we pay for conversions. We do it in search, we do it with email, we do it with media and exchanges, yet that models stops once you get that first purchase. 

Why can't we apply the same principles of performance marketing to retention marketing?   Why is it that you spend so much to acquire a customer, but you still have half of your customer file of non-buying customers, dormant customers or non-responsive customers?

The principles of performance marketing don't lie.   You should have some control over reach and governance over the amount of exposure to your audience.  You should have a solid method of reconciliation and attribution (who really gets credit for a sale?).  You should have the technical, creative and strategic means to optimize, test, learn and re-optimize without fatiguing your audience.  You want empirical evidence that something drove a sale or behavior and are willing to pay for it.

Are open rates important?   Why wouldn't you think in terms of eCPM?  This calculation has gained tracking in the advertising world for years to provide a better performance metric that aligns to financial and reach goals. (Total Earnings/Impressions X 1000  = eCPM). 

In my experience over the years, I haven't found one client or partner that has it all together to run programs like this for non-acquisition programs. I believe the market will dictate that change.  But what stops most from attempting it?

Sensitivity to Control.  There is sensitivity to the perception of losing control in retention marketing.  CRM is about knowing the customer and optimizing the experience.  A performance model could potentially introduce a less controlled experience that may not be aligned with customer loyalty goals.   I also blame this issue on the vendor landscape.  There are too many grey areas to acquisition and PPP models, and many traditional marketers don't trust this model with their most valuable customers.  But PPP doesn't mean you have to lose control over offers, discounting, promotions and cadence. 

Pay-Out Model.  You'd think it would be simple.  You drive incremental business and you pay a %.  But  retention marketing  budgets work differently and they aren't as variable and fluid as acquisition, media and search budgets when it comes to performance and pay-outs. 

Lack of good attribution.  If you don't trust or have clear insight into what drove the sale, you'll never run a PPP program.   Most companies lack the reporting, the science behind attribution and the discipline to run a program like this.  In the online advertising and search space, the heavy lifting of pay-outs relies on the vendor. If you don't report and reconcile, you don't get paid.  If you think you do it now, try it out for a few months. Hold back your employees' paychecks if they don't perform, and I bet the reporting will become far more detailed and accurate.

Little appetite for risk.  PPP is a risk-to-reward model.  It requires some calculated risk and a bit of trust in your partners.  You can't expect to run these programs alone. You shouldn't try to absorb all the risk.  Many don't have the infrastructure or capabilities to run these models alone, nor should they try.

No Bandwidth.   That's the excuse for not getting it done, but really that translates to mean you just haven't prioritized PPP or don't trust that it will drive the highest results.  But in the age when customer attrition is over 35% a year, you'd better find a way to get more out of your spend.  You can't rely on commoditized CPM costs to increase your capabilities.  

PPP isn't an easy type of program to negotiate with your agencies and partners.  But it's something you should begin to discuss in your planning; you should find ways to weave it into your strategy and budgets.   Just as you should be thinking about it from a marketer perspective, your agencies and  partners should be thinking of creative ways to model PPP to future budgets.   

"There is no such thing as coulda, woulda and shoulda.  If you shoulda and coulda, you woulda done it."  -- Pat Riley (Basketball Coach)