In this episode of Coherent Thoughts, James Glover speaks with Oracle's Chad S. White about the biggest misconceptions around email, maximizing the value of each subscriber on your list, and how to make campaign execution more efficient.
Chad S. White is the Head of Research for Oracle CX Marketing Consulting and the author of Email Marketing Rules and more than 3,000 posts about email marketing. A former journalist, he’s been featured in more than 100 publications, including The New York Times, The Wall Street Journal, and Advertising Age. Chad was named the Email Experience Council's 2018 Email Marketer Thought Leader of the Year. Follow him on Twitter @chadswhite.
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James Glover 0:03
Welcome to the Coherent Thoughts podcast. Today's guest is Chad White. Chad S. White is the Head of Research for Oracle CX Marketing Consulting and the author of Email Marketing Rules and more than 3000 posts about email marketing, a former journalist, he's been featured in more than 100 publications, including the New York Times The Wall Street Journal and Advertising Age. Chad was named the email experience Council's 2018, email marketer thought leader of the year, follow him on @chadswhite on Twitter. Welcome to the podcast Chad!
Chad S. White 0:37
Thanks for having me, James.
James Glover 0:38
Yeah, great to have this conversation. A lot of things I want to kind of cover with you. And the first is in your book, email marketing rules. You talk about how misunderstood email marketing is as a channel, could you share some of the biggest misconceptions people have about the email channel?
Chad S. White 0:53
Yeah, absolutely, definitely. There's a ton of misconceptions, I think, first is that email marketing is not advertising where you're pushing a message at people where it's one sided, and there are no consequences for poor messaging, or poor targeting. I think also, another misconception is that email marketing is kind of like a digitize direct mail. But the big issue here is that there's two areas where you can go really astray. The first is with design. Actually, just earlier this morning, I had a conversation with one of our consultants asking if we had a point of view on designing HTML emails versus emails that are, quote unquote, one big image and I joked in response that I thought this debate was long settled. But obviously, that debate is still out there kicking around tiredly. And it's really unfortunate, because that's not how you can succeed and email on the other big thing with direct mail is permission, the absence of permission, really, I think, is one of the central appeals of direct mail. Whereas permission is absolutely central to how email marketing functions. So there's a very strong tension there. And really, those are just a few of the sort of foundational misunderstandings about email. There are many, many more. And if you actually don't mind a quick plug, I recently released three on demand webinars about some of these misunderstandings, if you go on to Oracle's Modern Marketing blog, and search for the questions to ask, instead, you'll find them I talk about common questions about email marketing, ROI, list growth, email performance measurement, and then I suggest much better questions to ask instead, that are much more likely to lead to email marketing success. Mm hmm.
James Glover 2:41
Yeah, sounds like sounds like fascinating things, I'm sure listeners will be interested, one of the things I push really hard is to get our customers to do an attribution free measure of the value. So we try to keep 5% of the population or something like that, in their business as usual program and, you know, for upwards of nine months or a year, so that they can get an attribution free metric of the benefit of a better healthier email diet, which is a pretty serious commitment to measuring the value, you know, but it does give you if that customer is behaving better across all channels, and the only difference is you know that you've put them on a better diet, then that attribution free metric can be gold. From our perspective,
Chad S. White 3:30
there's certainly a lot of intelligence that can be gained by doing a universal holdout group, which is what you're talking about. That's what we, that's how we talk about them. It really allows you to see how people function in the absence of these new things that you're adding. Or I think there's always this underlying assumption that like more email is better. And holdout groups really allow you to see that that is not true. It really allows you to see the incremental cost around sending an additional email and guide you back down towards sort of what the sweet spot is, across different segments of your audience. So I'm a fan of universal holdout groups. Do you think there are a bunch of different ways you can manage those? so that you're not highly impacting the folks who are on those groups?
James Glover 4:25
Yeah, of course. That's Yeah, yeah. That's the biggest challenge is that population that you're on a starvation diet is the way we describe it. And how long are you willing to do that for? Yeah, yeah. So there are challenges there. But if you want to measure something, like a decrease in frequency, the frequency of emails that you send out, I mean, that's tough to do without at least three months of data, you know, to see, you know, when the pros and the cons start to, you know, clear out basically, and you get a clear
Chad S. White 4:53
Yeah, and I think these are all really interesting issues, especially in light of what a lot of our clients are Moving towards which is like activity based segmentation where different folks are included on different sessions based on their activity level, their level of engagement. So there were very, I think fairly rapidly moving towards an email world where everyone isn't getting the same number of emails that are on your active list that that there's some variation, depending on engagement levels and what people are doing. And that's fantastic. That is the world that we want to head towards where everyone is treated on a more individualistic level, that helps senders, you know, hedge their risks in terms of, you know, complaints and fatigue. And it also serves our subscribers way better, as well, by giving them the appropriate number of touches in their inbox.
James Glover 5:51
Mm hmm. And one of the ways I think I've heard you talked about this is, is having the your customers focus on maximizing the value of a subscriber, not the value of a campaign, can you kind of dive into that concept? And tell us a little more about what you mean by that?
Chad S. White 6:10
Absolutely. I really wish I remember all the details. But I was at a conference, I think it was like 17 years ago was like in the early 2000s. And I don't remember who the speaker was, I don't even remember the name of the event. But there was a speaker who was saying how, you know, the the retailer of today sees products as their inventory that they need to manage, but the retailer of the future, is going to see their customers as the inventory that they have to manage. And I thought that was really profound. It really kind of flips, you know, the the paradigm on its head. So instead of saying, oh, I've got all these widgets, let me see who wants to buy these widgets? Instead, you're thinking, Oh, yeah, I have these customers, what do my customers want to buy. And I think that's, again, a really profoundly different way of thinking about it. And it's the kind of thinking that we've really kind of seen this year during the pandemic. So for instance, back in April, edible arrangements started selling just a box of fruit. You know, they're known for these, these great arrangements, these are made out of fruit. But they have these customers who are having problems, you know, getting food getting yet. And so they created a brand new skew, which is just a box of fruit that they were then selling. I think that's, that's a great example of recognizing that you are not selling products, you are serving your customers. And so it allows you to think differently about what you're doing. But absolutely, too many email programs see their job as managing campaigns when they should be managing subscribers. And I think even even worse of all is the fact that many email programs either jobs is managing their lowest ROI campaigns, their broadcast campaigns, they spend tons and tons of time on these campaigns, when I'd much rather see them focusing much more on automated campaigns. Automated campaigns, for some companies are generating the majority of their email marketing revenue. So like 5% of their email volume is generating 50% of their email revenue, which is amazing. And I think in a world where that's possible, it seems like an incredible misallocation of resources to be spending 90 95% of your effort on broadcast emails, which I think in a lot of programs is what's happening.
James Glover 8:48
Yeah, that's interesting. I want to we often and I think this is might be a little bit different perspective, we try to use the model of the personal shopper, you know, whether that's like the retail store that our great grandpa used to shop at where, you know, they'd walk in, hey, Harry, welcome back. And, you know, they knew the customer and they were sort of serving the customer based on the relationship and what they know about the customer. Or whether it's net, you know, sort of the modern world where you go into Neiman Marcus and you have a personal shopper that has a relationship with you and we try to challenge our customers to think about the email channel and the way that they serve their customer in the email channel, just like a personal shopper would do. You know, which feels a little bit de I totally get the trigger thing be you know, and I love triggers, obviously, I think they're, you know, related because you did something there's sort of a great relationship there between your activity in what you're receiving. But, you know, we also love the personal shopper for you know, helped me discover new things about the catalog, you know, show me, show me the Good stuff, the new stuff, you know, what do you think about the personal shopper as the kind of mental model for how I should think about my email relationship?
Chad S. White 10:09
Yeah, I wish you could see me nodding my head throughout everything you were saying? Yeah, I think it you know, marketing as a service channel, and not so much as a promotional channel, because I think promotional gets people thinking of that, like that push message. Whereas I like to think of it as service. And you're absolutely right. So, you know, I mentioned automated emails, which I think are a huge part of what is a great service model with email, you know, can be, but you're totally right, that, you know, personalization and segmentation are also part of it, those are sort of the three legs of the stool, that allow you to create a great service oriented model. And I do like the sort of personal shopper service oriented framework, because it gets you in the mindset of, of helping your customers, right, because if you help your customers, then they're going to be happy. And they're going to convert, and that's what you want. Right? So I feel like that is like actually the perfect kind of language to use, which, again, is very different than if you're talking about, you know, advertising, which I think is a very poor model that oftentimes gets applied to email marketing.
James Glover 11:23
Have you have you spent much time with like, to me part of this challenge, and I'd be interested in how you help the retailers that you work with, out of it is the like, the reason they spend so much time on those batch and blasts emails, is they're driven by a marketing an email calendar. And that email calendar, in turn is driven by their relationship with the merchants. And so, you know, they start with what did we do last year? Oh, it was chair day. And, you know, the, the person that owns the product line chairs at that company, he, they want their circ and, and so they're basically serving the merchants, and you know, with the email team in it, and the email team is kind of set up to, to serve those merchants and make sure they get a certain amount of exposure and circulation. And that's part of the reason why they, they they think the way they do it, and I'm wondering what you how you kind of counsel them to get out of that mindset. You know, if they do?
Chad S. White 12:34
Well, you're absolutely correct that that happens. You know, the email marketing team is intensely lobbied. And, you know, certainly at any retailer, they're just intensely, unceasingly logged, easy to get. Yeah. And and you're right, I think that that is absolutely not how it should work. And I think one of the things that's, that's, that gives me a little bit of hope, and sort of breaking, that kind of misplaced sense of service, there's, you know, your sense of service should be focused on the individual customers not on serving them, the merchants, and the merchandising people. But one of the things that gives me hope, is AI and machine learning, sure, you start to get those kinds of algorithms in place. And then it's not really an argument anymore, right? Because the algorithm is then promoting certain products to certain people based on something real, and not based on lobbying by other departments within the company. So I think that as more AI machine learning gets used, that email, marketers will get more and more cover to make the decisions that are right for individual customers.
James Glover 13:54
Yeah, one of the things that I've done in helping the kind of broker in that negotiation with it with a bunch of our retailers, is as a medial step, not because it's the best thing to do, but because it's kind of a practical middle step. You know, you used to get, Mr. chair person, you know, you used to get a million eyeballs. And it was because you got chair day, and you know, Wednesday, the 24th was chair day, and so we gave you a million eyeballs, we're gonna give you a million eyeballs again this year, but we're gonna do it over three or four sends to the people that it's actually relevant to. And so rather than putting it into the entire population, once we'll put it to the relevant quarter of the population three or four times over the next couple of weeks, and you'll get good we use the machine learning you know, in the end the artificial intelligence to identify and target those people, and so will at least have a medial phase where you get the same circulation but better relevance and you know, that's kind of a stepping stone. stone that we sometimes use to help the retailers negotiate with this, the stranglehold that the merchants have on the cert, just to sell relevance and show them how much more they can get out of that circulation, if they're, if they're sending it to people for whom it's actually relevant.
Chad S. White 15:18
I think it's a very good strategy, it's, I think it's gonna be really tough, it's going to be a painful transition for some, some folks within the organization, you know, on net, you know, if the product category, you know, the products that that person is repping are good than on net, they're gonna do better. Over time, with this more distributed approach, where you're getting the products and the product category in front of the right people at the right time, you're gonna do better. But obviously, that's not going to be not gonna be true for all products and all product categories, which you're suddenly going to find that you were over promoting. And that actually, your customer base has much less interest in that. And they think that that's the deep seated fear. Oh, yeah. But also the fact that there's like, you know, when you go from a model of big splashes to one that's very distributed, your year over year, numbers are going to be affected, right as you as you embrace this new world. And I think that, that's the transition that a lot of companies need to get over is, is they need to do a little bit of a reset on the metrics and say, you know, what, you know, we're not going to look so much at the year over year numbers, because they're artificial, because we made them artificial by promoting things in this way, rather than the optimal way.
James Glover 16:36
Sometimes we've used the machine learning, you know, to, to cut the sand into two pieces, the people that want it and the people that don't want it, and then you send it to everybody, and they can at least report back to the merchants? How did the people that wanted Do you know, what was their performance? And how would How did the people do didn't want it, but you made me send it to them anyway. And so at least you get a reporting that says, here's the real costs, you know, I we could have used that send, you know, to, to have to send it to something relevant. And we would have done something, again, do our normal email performance, but instead, we decided to sell them send them something irrelevant. And here's how it did. And it kind of shines a light on it. And usually, it doesn't take very many cents to have them start to come around.
Chad S. White 17:25
Yeah, I think the central question is, who are you serving? And if you're not sure that it's the customer, then you need to do some serious reevaluation, some serious testing, and like, really just, you know, rethinking how you're doing things, because that's who you should be serving, you should be serving your customers. Period full. Yeah,
James Glover 17:46
totally. And one of the things I often hear is, it is so much work to do what we're doing today, and we want to produce more and better and more relevant campaigns. But you know, a lot of these email teams are under resourced. You know, and just barely, kind of getting the next send out the door. What are your thoughts on how they can save time or make email campaign execution more efficient? You know, sort of by themselves the time to to be more relevant? What are your thoughts on that?
Chad S. White 18:21
Yeah, so we already kind of talked a little bit about, you know, how I think that too many programs are dominated by time spent on broadcast emails. So I do think that that's a serious thing to reevaluate, and, and right now, there's absolutely a lot of companies that are under just extreme pressures, because of the pandemic and the effect that it's having on them. There's no doubt about that. And so when I think about efficiency, some of the conversations that we're having with clients are around modular email architecture. You know, this is where instead of a traditional, you know, library of email templates for individual emails, you instead or you have a library of modules that you then stack up kind of like Legos to build emails, and you have this sort of bucket of different types of modules. So you could have different kinds of hero modules, you'd have different kinds of secondary modules. And you could build it, you know, whatever made sense for that particular segment. And we see that among our clients that have moved to that, that they save up to around 25% of their build time by going to a model like that. So that's one of the things that we've definitely been having a lot of conversations with our clients about, you know, I mentioned before, you know, AI and machine learning that definitely can in certain cases when you were doing things very manually before can save you some time. I think the other thing is sort of what we've been talking about a lot of our conversation is been around people and process and you know, I know that A lot of time can get hung up in like the review and approval process. And I know that that is a problem that absolutely got worse, back in March, April, May and into June, when things were their most crazy. And I suspect that by the time folks are listening to this, they probably experienced a bit more of those kinds of delays. As we sort of go into, you know, we're coming out of a going into a rough winter season. But that's another place where you can try to make things better for folks is really evaluating, alright, are all the cooks that are in the kitchen really necessary? That's another way you can do it. But I feel really compelled to say that no one ever starved their way to email marketing success, you can, you can only innovate your way to success. And that means making smart investments and growing your capabilities. Efficiency is great. Innovation is better.
James Glover 21:07
Yeah, one of the things that we've done actually, for it's a mutual customer that we have very large retailer is to help them there, they're using live text. And so if you think about in what they used to do was combined the text and the picture in and maybe the context would be a promotional email. And by making those all one thing, they, they basically used up that creative once the promotion was over by switching to live text or separating the the photography, you know, which is expensive from the promotion, and they can reuse that photography later on down the road in a different promotional context. And that's enabled them to, to vastly expand their library of available content for producing more and more personalized, relevant email campaigns, which I thought was pretty clever and efficient as well.
Chad S. White 22:15
Yeah, absolutely should not suffer, it's a very rare case, you should not be embedding text inside of images. I know that sometimes that is a little bit tough for people who love a particular tax, or they think that their, you know, their in house branded fonts are amazingly powerful, and as part of their brand identity. But in email marketing, we make strategic sacrifices. And I think that's one that everyone needs to get on board with. If it is something that you think is really painful for you to do, you know, check out, you know, web fonts, not supported everywhere. But that's something that you can use that is supported in a number of email clients, and could get you closer to the brand font that you love, and don't want to abandon
James Glover 23:05
totally. So Chad, what what do email marketers need to do differently? compared to 12 months ago? What would you say like the biggest trends or the biggest things they need to do differently in order to kind of stay ahead of the game? over the next year or two?
Chad S. White 23:23
Yeah, so I guess first, wow. I mean, that's a tough question. You know, company's circumstances have definitely changed, because consumers have changed, right. So there are lots of adjustments happening. And there's been a lot of talk about the shape of the recovery. Really, the the only place where it was a V shape was in the stock market. And that may, at some point become a w. u shape is more realistic. You know, but I think that that really kind of hides what's been happening. I'm a fan of the K shaped recovery. This is the idea that you have some companies like zoom and fartist pharmaceutical companies that are doing really well there's sort of that upward slant of the K, while there's lots of other companies like airlines, cruise lines, restaurants that are really, really struggling, and they're on that downward part of the K. And that has really dramatically affected what companies in each of those groups is doing email wise, you know, some are doing, you know, the folks that are on the up and up the zooms, they're investing heavily and they're doing all the things that you would want to do during good times in the email world, which is investing heavily, and automation and segmentation and personalization, and, you know, getting closer to your customers and subscribers. You know, meanwhile, the folks that are in that latter group That are really struggling, you know, they're just trying to get by, and they're trying to get lean and look for savings. But all of that said, I don't think that the basic goals of email marketing have really changed at all the circumstances, absolutely different for a lot of companies, but but the goals aren't the same. You know, we exist to connect with our customers and our prospects to nurture those relationships that help not only them, but also help our business. And, you know, I mentioned that edible arrangements, did a really good job of like kind of pivoting and offering a new product that they didn't offer before, because that's where they saw the need. And they weren't really the they weren't the only ones, there were a lot of companies making really great pivots. Not only in what they were offering, but also how they talked about what they're offering some really fantastic pivots back in March, April, May, June. And that's the kind of thing that we should be doing all the time, we should be feeling out our customers, getting in their heads, being empathetic, and really aligning ourselves. And so that's the kind of thing we should be doing all the time. And I anticipate that in 2021, and in 2022, you know, we're gonna have to do that multiple times more, as we come out of this thing. And some people are going to bounce right back and other people are not, that their behaviors are going to be more entrenched. And so we're gonna have to be again, getting, you know, in line with our customers, you know, across the spectrum, and trying to meet them where they are, and dealing with the various segments and different mentalities within our audience. Mm hmm.
James Glover 26:53
So you mentioned edible arrangements What's another email like you're a customer to Chad, right, your shopper? You know, what, who's it who's got an email program that you kind of think of as best in class or, or that you love to and look forward to receiving? You give me give me a couple more examples of email programs that you love?
Chad S. White 27:13
Yeah, so you've probably already gotten the sense that I really love personalization, segmentation. I love one to one one to one is where we all want to go, that is the promised land, that is where we want to eventually get to, and it's, you know, it's unachievable, it's always gonna be on the horizon, we can always get better. But that's what we're all trying to get to. So right now, I think a lot of the digital media companies are doing some of the best work. Because their products, you know, the content that they have really lends itself to personalization, segmentation and automation so well. So I love brands like Spotify, Netflix, Sony, and Nintendo. I think those are all, they're all doing really great jobs, because when I get their emails, I see myself in their emails. And I think that's what everybody really wants is they want to see themselves in those emails they want to see, you know, that they were listened to, and that the companies paid attention to what they'd been doing, and gave them something that was appropriate based on that. And so, you know, when I get those emails, I see myself, and that's what everybody loves. Everybody loves themselves. So if you can serve up something that that, you know, makes it really clear that this is an email for Chad, this is an email for James, that is a winning email.
James Glover 28:41
All right, final, controversial question. So as a lover of personalization, if you look out at a kind of polarized country, where people might be doing an increasingly good job of feeding me, the news that I want to hear is boost personalization, ruining America and making us more poorly polarized.
Chad S. White 29:06
You went to that you went there. Alright, so this is, this is a pretty tough question. For me, as a former journalist. I feel like news is a little bit different. Because I do feel like media companies, like news companies have to balance serving their customers know their subscribers, but also serving society. And I think there's actually been a lot of questions about that, and about really questioning in our very capitalistic society, you know, our shareholders, the only people we need to pay attention to and I think that a lot of companies have appropriately said no, that that's not The only people we need to pay attention to. But we also need to take into account other stakeholders and society as a whole, as well as our customers. And so I think that there's not, there's not as you know, as much as I've talked about serving customers, I do feel that that is not the only constituency that businesses need to serve. And that there really is right now, a lot of momentum behind thinking of, you know, you want to create products, and you want to serve your customers in a way that's best for society. And I think that news is a perfect example of that. And I think that we've seen what happens when you only give people things that support their existing views, it creates horrible, horrible citizens, that believe increasingly messed up things that are incredibly divorced from reality. So I certainly hope that folks do try to think about the impact that they're having on society, not just on dollars. And I think that folks that are in the news business, or in the content business, so the YouTubes, the Googles, as well as all the media companies really think long and hard about what they're doing to society. But it's one, it's certainly a tough question. I know that a lot of companies are debating, you know, where their allegiances lie, and how much of the equation should each constituent get?
James Glover 31:46
Yeah, well, one of the things that, and maybe this is just naivety on my part, but Greg and I might my co founder when we got into this business, and we felt like, part of the problem was that machine learning was very reinforcement oriented, and that we wanted to bring our AI and machine learning that had a kind of diet orientation. You know, we like to say that consumers consume their taste, you know, I had Chinese food last night for dinner, I love Chinese food, but there's something about me as a human that wants to eat something different tonight, whereas I had oatmeal for breakfast today, and I'll be happy to have oatmeal for breakfast again tomorrow. And so it doesn't apply to everything that I do. But, you know, there's a part of me that longs to try new things, and doesn't even mind to be challenged in my perspective. And so it's pot, it's, you know, it's possible that there's a kind of personalization that will serve me new things that will challenge my perspective in will encourage me to try something new. And if you think about go back to that personal shopper, model, sometimes they get me out of my comfort zone and push me into the into things that I might not necessarily have tried, if led left on my own. And so our hope is that we can at least push machine learning, you know, in these kinds of directions that are more discovery oriented and showing people new stuff, and and that that actually is more authentically human. And so maybe mitigate some of those, you know, total echo chamber reinforcement type dynamics that have been put at play in the early stages of machine learning. So,
Chad S. White 33:50
yeah, that's Yeah, I think that's exactly what's been happening. And like, we need to recognize that like, this is the early stages, right? This is what we've seen with us and well documented, you know, with like YouTube, how it makes people increasingly more narrow and their thinking, that is not a natural consequence of machine learning and AI, that is an imperfection and how we're executing AI and machine learning. You know, these algorithms are made by people. And so if people make them narrow, then they will be narrow,
James Glover 34:27
and the narrow AI should lose over time to the ones that are pushing broader perspectives, because the broader ones are more in tune with how humans are actually constructed, I think.
Chad S. White 34:38
Yeah, so I see, all of the ills that we've seen from AI and machine learning so far, are not a consequence of, you know, the nature of AI machine learning. I think it's a you know, a juvenile iteration you Of these technologies and that it's going to get better, it's going to get better, it's going to get more nuanced. And you're right, like people don't. You know, it's not it's not good for your business, to have people endlessly consuming the same thing, right? It's you want to grow your customers, and you want to have them, you know, diversify the things that they are consuming and buying. And so again, I feel like this is, you know, this, this sort of juvenile stage of development that we're still kind of struggling to get out of where AI machine learning can be way more sophisticated, with a more nuanced approach that's going to make everyone happier and make society better in those cases where it's something like news that really impacts what kind of reality we're all living in.
James Glover 35:54
Very good. Thank you, Chad. I really appreciate the conversation. And thanks for coming coming on the show.
Chad S. White 36:03
Thank you very much for having me, James.
James Glover 36:05
All right. Thanks for listening to go hear thoughts. If you enjoyed the conversation, subscribe via iTunes or your favorite podcast app. If you like the conversation, please leave a comment or leave a rating. To learn more about today's guests. Check out the show notes for today's episode, coherentpath.com/podcast