The Multiplier Effect of Lower Funnel Optimization
Email has the remarkable benefit of driving a huge return on investment for companies. There’s a missed opportunity, though, that could accelerate this ROI even more.
The focus for optimization is typically deeper down the email conversion funnel–segmentation, creative, content, products shown, offers, etc. Because each micro-conversion in the funnel is a place where recipients can disengage and fall out of the funnel, the lower layers of the funnel have the biggest impact.
It is these lower layers that are most often neglected when it comes to optimization, though. Join G.B. Heidarsson General Manager at SparkPost, as he gives a short history lesson on email, shares a client case and why now is the time to focus on optimization at the base of the funnel to generate a huge impact to your overall revenue.
The good news is that the recommendations are much easier to implement than optimizations further down the funnel.
About: G.B. Heidarsson
More than 15 years’ successful leadership experience in high-growth,fast-paced, technologically advanced marketing environments. Proven strength in on-line marketing including e-mail, social media, mobile and database marketing to capture customer information and significantly strengthen business results. Recognized by the Direct Marketing Educational Foundation as a John D. Yeck Scholar and have since 2005 built up and managed the New York offices for e-Dialog, a GSI Commerce company.
I’m G.B. Heidarsson and I am a general manager at sparkpost mainly focusing on deliverability and competitive metrics former CEO of a datasource and today I wanted to talk to you a little bit about the multiplier effect of lower funnel optimization wait a minute okay okay guys good. Yeah How can I see this five in now? I believe so. Let me see. Okay good this is a new format for me guys. Okay, making a martini nearly no worries. We got nothing but time. isolated in a snowstorm. 12 inches so far today seems like we get in the crowd, Asha Dover. Thanks, Nely. Um I guess we’ve given another minute or so right? Yeah, that’s, that’s true. I’m, I’m lucky enough to be in the mountains of Colorado. So every day is interesting. Yesterday was 60 degrees in mountain biking Today’s a forest now. But anyway, I think it’s time to start nearly any reason to wait. And crystal was back. Happy mazzini Chris MGB Harrison As some of you know, General Manager at sparkpost, mainly focused on deliverability and competitive metrics. and former CEO of a data source, which that product, or those products kind of come from Originally, I want to talk to you about multiplier, the multiplier effect of lower funnel optimization today. That’s a really fancy way of saying, you know, keep to the fundamentals, make sure that the, the basics of your programme are working correctly, because that will multiply his way up through your funnel much more effectively than tactical changes in in parts of the segmentation. Before I go any further though, I really wanted to thank Nely and Andrew Bonar for what they’ve done. I think it’s truly amazing to take what was a extremely promising event physically in London and I looked very much forward to see a lot of good friends there and turn around to a extremely successful virtual event and postponed the London event of which I really hope to see all of you very soon at and just the phenomenal job and this platform seems to be working better than any of that I’ve seen There are similar. So thanks for that, guys. But let’s jump right into it. Email, as you all know, is an invaluable business tool and the highest ROI and has been for two decades of any channel. in retail. Unfortunately, as we have been growing and developing email over the last 20 years, it’s no longer very simple. And there is a lot to take care of and focus on in today’s email marketing. And as if that wasn’t enough, just from the setup and authentication and deliverability perspective, breaking through the clutter in the inboxes is getting harder and harder with billions of commercial emails being sent every day as being partially very responsible for getting them out. Now, this is very exciting, the five fundamentals to increase success, you know, and that’s, of course, a joke. I know that this may not be the most exciting things to hear about. But I think that they, if you like to increase the revenue of your programmes, and if you like to make sure that you’re staying on top of your game, I think those are five fundamental fundamentals that you need to stay on top of. Those are deliverability competitive metrics, understand your subscriber authentication and list management. I’m going to focus mostly on deliverability and competitive metrics. But I felt that I would be remiss if I didn’t touch base on all of these. Now deliverability obviously has changed yet again, when I started, and I think Christopher Marriott was right there with me. And now in midtown Manhattan. Back in those days, it was really a free for all, you could do pretty much anything that you wanted. And, and nobody would say anything, you had to be really egregious for anything to get blocked. And if it was, it will be lifted the day after it could continue to continue whatever your behaviour was, again, 2003 with can spam kind of tailed this a little bit, we all thought that email was going to go away and died then. And as you probably know, thinking that every two years ever since it didn’t get stronger. Everybody had to follow a set of rules, except of course the politicians that put that together as they are exempted from can spam. Kasmin maybe didn’t go quite as far as it should have. And consumers complained over spam increasingly, where reputation kind of came in, stepped in and started to filter centres a little bit based on their behaviour in broad strokes. And, and that helped, but it was still a very disjointed effort across hundreds of ISP s. And if we think back to, you know, the, the 2010 1112 timeframe, Gmail and the big fours were about 40% of the list that was sent to and we would frequently send to, you know, large email ISP like Comcast and charter, which are really pretty tiny at this point, because the big force due to engagement metric, and due to focusing on giving consumers the filtering that they individually wanted, they have really won over the market and close to 90% of a b2c campaign today is going to those big force. And that is that has changed, everything has changed our approach, but it’s also changed deliverability drastically. Now, what it has done first and foremost, it has helped deliverability challenges to go unnoticed. This is constantly billions of dollars every year. emails, obviously that ends up in the spam folder and not being interacted with. We still have I think this notion that bigger lists are better. Let me just make sure that I communicate today that they’re not the better list is better. If it’s an engaged list. That is the list is gonna get delivered, and only delivered emails are going to get engaged with unfortunately, because we kind of, we’re not really internalising these facts in boxing amongst consumer brands is still on the way down. We’re now down to about 80% average inboxing which really isn’t great. And there’s really no good reason for the average to be there. Other than I think we all have a little bit of a shiny object syndrome and we’re kind of trying to optimise things at the top end of the funnel but we really kind of forgetting the fundamentals. The other thing that’s a problem here is that spam filters for spam filtering Monitoring hasn’t changed much since the early 2000s or late 1990s. And we’re still relying on technology that was developed then to measure a world that’s very different from what it was then. And, and that’s, of course, a problem. And I thought I’d kind of put up a little thing here that, that when I’m actually going to try to explain that. Now, what you’re seeing, and I want you to kind of pull your keyboards closer to you, because I want you to give me a little bit of a comment in the chat. What you’re seeing is about a week’s worth of email campaigns about 20 emails campaign campaigns from a large us retailer. They, again, large retailer, millions of people on the list, very well known household name, which one of those columns looks like a reasonable inboxing for a large us retailer that has good reputation and organic sign on to their emails, gone, Krista, where you can start? Nobody participating in the challenge everybody’s Bluetooth keyboard not working. Okay, I’m going to give you 10 more seconds. Well, I think, tell me which column column one or column two is the accurate inboxing. For a large retailer, large us retailer. One of those columns is generated by a random number generator in Excel. One is the actual results. The actual result is number two. So what I was trying to test and I have done live, that doesn’t really work maybe as well as in a non live setting. But what I’m trying to explain is that when we see reasonable numbers, we tend to believe them. And what we very often see with very basic monitoring of deliverability is reasonable numbers. And we therefore believe that they’re not always true. In fact, this retailer has a lot of problems, they’re delivering down to 60%. On some of their campaigns, and their overall deliverability is, in fact 79% over the last 30 days. One of the main reasons for this is that 54% of the of their subscribers is in fact not interacting with emails at all, they haven’t opened a single email in the last 90 days. They also these guys are also hitting recycled spam traps, they’ve hit spam traps in the five out of out of the last 10 days, their spam complaints are tend to be over above average. And they have an active repeated spam cup listing. But they’re paying attention to their emojis, which has been kind of an interesting story all together? Well, there’ll be we feel like our research over the fourth quarter last year has proven that, in fact, images tend to suppress open rates slightly. Now, the sad thing about this is that this is in no way unique. This is not special our war. It was it this is the average the average 80%. And the average is that large brands are either not paying attention to the deliverability. Or they are trusting their partners, either the USPS or the deliverability company to actually monitor this for them and fix whatever goes wrong. We have to kind of take responsibility back and make sure that we monitor these things and make sure that we stay on top of them. Enough of deliverability for the time being because the The other thing that I wanted to get in and I only have 20 minutes, when I’m probably going to run over is knowing your competition. My favourite quote is from Sun Tzu, The Art of War, where he explains exactly what I feel about email marketing that if you understand your strengths and weaknesses and you understand the strengths and weaknesses of your competitor, you’re really gonna win the inbox war. And, and to demonstrate that a little bit, I wanted to take a very loose example from one of our clients. They came to us just over a year ago, still doing more than most and over average success in the inbox, but they wanted really to hone in and get better especially for their black friday traffic. Well, we found out was, was that we, we, in fact, we could help them or they could help themselves to actually increase their revenue by over 30% year over year on the same list. That is pretty incredible. And I don’t think any other, any tactic actually helps you with that then needs a foundational strategy and attention to fundamentals. So how did they do this hyper vigilance on setup, what that means is that all the infrastructure, all the authentication, reputation, and overall deliverability monitoring and focus was there, day to day, everything tightened up, this includes simple things like the unsubscribe link, and on Google and so on and so forth. They but but that’s not enough. So that will lift your that will definitely lift your overall revenues, because you’re getting your email in front of more people. But the challenge is also how you’re going to get better than the competition. And that is the constant monitoring of competitors, to be able to really compete with them in real time, but also understand what they’re about, so that you can craft the strategy that outperforms there when it comes when when when it really counts. Like in this case, for fourth quarter and, and the Black Friday weekend. The interesting, you know, the the interesting soundbite with this is that this particular manufacturer or retailer, they there was so successful during the Black Friday weekend, that in fact, they ran out of inventory in the US. And they then ran out of space on the plains to move him into to the US. So they had to actually reduce their campaigns going forward for a little bit until it caught up. That’s a good problem to have. And I wish that on all of you. What do you need to know about your competition to be successful, you need to understand the promotional strategy. Thanks, it’s the Mac camera. Appreciate that, Christopher, you need to understand the promotional strategy of your competitors, you need to understand the selling periods when they start when they end, what are they starting with? Traditionally, retailers and service providers very often follow a calendar approach. So they’ll do the same thing this year as you did last year. So if you’re so if you’re, if you can actually pinpoint exactly what they did last year, and possibly the year before, by having that sort of analytics, which we know we can get, you can you can usually understand where they’re going to go. And you can kind of get into the inbox a little bit earlier than understand what kind of promotional and merchandising strategies that they’re using, use their own tests to actually create both better tests for yourself as well as really kind of gauge the success of their test and and and kind of understand where they are where you are in things like you know, are you very promotional or you’re very driven by discounts are you driven by branding and so forth and so on. And that will definitely help craft a more sustainable email programme and email strategy going forward and eliminates this one nice thing which is whenever somebody on the sea level in the organisation says well I really love this email from our competitors we should do the same you can kind of go in back and say well you know it can’t flop so we shouldn’t armed with with with this, of course you can counteract every move that your competitors have and move on to really be relevant in your communication. And I I thought that you know, since we’re all very affected by the Coronavirus Now we would kind of take relevance and look at it from the perspective of Coronavirus comm communication. And, and and they really run the gamut. And you have over 100,000 campaigns in the last week about the Coronavirus. That’s the main thing that has been talked about in over 100,000 campaigns. I have literally never since I started in analytics seen 100,000 campaigns about the same thing, including presidential elections. This is this is a completely new one. But here’s a here’s some examples. Airbnb for example, is has been very proactive communicating to both hosts and travellers because there’s a lot of things that are going wrong. And a lot of places literally shut down. Okay, I’m not sure I understand your question, john. But we’ll get to that later. And if you type it out a little bit better on I’ll show to address there afterwards. Rei on the other hand, They, they’re just letting us know that they’re taking a safe approach. There’s free shipping for everyone because they’re closing their stores. Unfortunately, at least in the US, there’s not a lot of camping going on. I myself have gone to Utah next week, and they’ve literally shut the state down. But then, you know, there’s some that kind of, I feel come out of left field like this Lincoln aquatics, which really wants everybody to know that they still sell selling chlorine for pools and hot tubs. And they will continue to do so through the crisis. Kind of a missed opportunity, I think. But we saw some that were really kind of grabbing the opportunity to kind of promote themselves without being obnoxious. And so my favourite there was actually eaglerider. As many of you know, I’m, I am a pretty avid rider myself, but so this may be a niche that nobody else is interested in. But I thought it is kind of cool that they, they use the opportunity of travel being down all over the world to kind of come in and say, Look, you can rent a motorcycle and see your own neighbourhood, your own backyard, you know, trade out the Eiffel Tower with the Devil’s Tower in Wyoming or, or the candle canals of Venice with Venice Beach in California. And so that was kind of a flippant, interesting communication. were they using this situation to create relevance to what they’re doing themselves? What did rollover to authentication, we saw Mr. White earlier, doing a much, much more thorough job on authentication, but I thought I mentioned that what we see on our side is that it came in SPF is thankfully pretty much universally adopted. not perfectly, but you know, as as well as can be expected really, for the most part, we’re still a little surprised over demark. Now, demark is not really a deliverability benefit to a large extent, unless you really lose your domain to bad actors. And they actually start to negatively affect your deliverability due to spoofing or spamming. But but it’s it continues to surprise me that this is not embraced because it locks down your domain and make sure that there is nobody sending inappropriate messages, or even sometimes damaging messages to your subscribers and others and spamming with your domain. Femi is coming out, there’s a lot of new technologies that should stay on top of I think that that one is, is very interesting, especially from a branding perspective. Maybe not as much by for authentication, but it helps self authentication in the inbox by your subscribers. And with that, list management is number five on the list. I think we all know if you’re not opening the email, they’re not probably the probably not interested in what you’re selling. And, and and and i think i’m i’m very much in agreement with with previous previous commentator that at least half your list needs to have emails that were opened in the last three months. That’s just a minimum requirement. If you don’t have half of your list being opened in the last three months, you are going to have challenges that’s that’s kind of that’s an overall breaking point. So that’s one that for example, the retailer we talked about earlier, had missed there were 54% inactivity, and we start to see you know, soon as it kind of creeps over that magic 50% Mark, it really starts to count. And then validation of your list, cleaning it up and view the basics. And with that, we would kind of come into the to the end of this. What’s important about that was when I say research shows that when I say that we come to them to this 70% of you will reengage so listen to this last three things that I want to say accurate deliverability data and power strategic action. And it is this it’s just you really need to understand where you are. This is kind of like travelling, if you don’t know where you are on the map, you can find the route to a while ago. So it’s mission critical to understand your deliverability and not focus on in imperfect measurements. If you are with a if you’re not with a premium provider, make sure that you compare your deliverability metrics with open rates with click rates. And with everything else that’s going on in your analytics, and don’t believe it unless it actually conforms with with the other things that you’re seeing. Deep competitive insights. You can’t win over a competitor that you don’t understand. They don’t know what what what they’re going to do. Kind of self explanatory, but most importantly, be authentic. Problem Solving with an unrelenting commitment to improvement. That’s really what we have to do. There are hundreds of attributes that we have to focus on every single day to get things right. We need to nail down as many of them and kind of keep them automated, so that we can really focus on every problem that comes up and songstress’s as it goes along with it literally all here to maximise conversions, which for most of us means maximise revenue. All the other metrics are means to that end and should be handled as such, the focus should always be on the bottom line. And with that, if there’s anything else you want to discuss, and chatterbot happy to answer that and I think we’ll start with john so I mean cheap TPR update mails came in similar volumes have you didn’t have to experience that us? Okay, gotcha. Anything else? And yes, Christopher. I have a gigabyte connection at home. It’s working Finally, Comcast came through took four years. But you know, we’re here now. And hope hopefully, you guys enjoyed this and maybe there was some learning. I really want to thank you for taking the time to listen in. And really, really look forward to seeing you Andrew in London when we have the fiscal event and all of the rest of you. It’s been way too long. Thank you so much. fantastic job, guys.