One of the best parts of my job is having the opportunity to work with digital marketing leaders and innovators across a wide range of technologies and services.  This week, I had the chance to catch up with Scott Olrich, CMO/CSO at Responsys. Scott has been part of the leadership team at Responsys for nearly a decade. During this tenure, he oversaw the launch of the company’s email and cross-channel marketing solutions. I was fascinated to learn what he had to say about digital marketing channels and where he sees the industry headed. Here are insights from the first half of our two part discussion.

CP: I wanted to start off our discussion with email, which is table stakes for most digital marketers today, but an incredibly important channel nonetheless. Marketers continue to tout email for its fantastic ROI and relatively low cost per transaction.  Some companies are seeing better results than what we used to see in the good ol’ days of “spray and pray” by leveraging more relevant content.  Why is it so important for increased ROI and overall effectiveness that marketers deliver more personalized and meaningful campaigns?

SO: Email is a highly effective channel and is still the largest contributor to revenue or to driving the desired action. This is also one of email’s downfalls though because people have rushed out to other channels such as mobile and social looking for similar ROI not recognizing email as the real power channel and trying to let it run automatically.

The most successful digital marketers are really defining the action they are trying to drive, and then building campaigns, and more importantly integrated campaigns, to get the customer to the desired action – whether it is a purchase, a quote, a form download, etc., and using email in a smart way to achieve this.

For example, Dollar Thrifty Automotive Group does an excellent job of this. When someone provides a credit card for a reservation, the card is not charged until that person shows up to pick up the car; thus the desired action is picking up the car not merely the reservation. Dollar Thrifty uses email and builds an integrated program to get consumers making reservations to show up for the car. The company sends a pre-trip program encouraging car pick up, offers upgrades at a reduced price, shows what the weather is going to be at the pick-up destination, along with other relevant offers and information, and really leverages email to drive the desired action.

I also want to mention a less-known fact about the importance of creating relevant email campaigns is inbox placement.  ISPs are benchmarking open rates, and if companies have a lower open rate than the average benchmark, the ISPs are bulking the email. Lower open rates result in lower deliverability and ultimately lower revenue per email; therefore, businesses need to be thinking not only about customer lifecycles and the desired actions, but really making sure they are driving relevant content so their inbox placement isn’t impacted.  It’s no longer just about missing out on better customer engagement, companies are being penalized for irrelevant content – putting more pressure on digital marketers to customize campaigns to avoid negatively impacting their bottom line.

CP: One of the things you said that really stood out is email has done such a good job that marketers are now putting this on auto-pilot to focus on other channels. There is a pretty strong argument that those channels are great, but brands haven’t begun to tap the potential within email given all the assets and tools available. Can you expand on this?

SO: That is absolutely the case. For every dollar a company plans to invest in marketing, I would argue that it should invest that dollar in maximizing its email marketing program since that’s the highest ROI available. There are a lot of emerging channels, but the ROI from these other channels is a lot less mature. It’s absolutely important that digital marketers really think about the power of the email channel and how to leverage it as much as possible.

Most new customers that come to Responsys already have email programs, yet we typically see opportunities for 30-50% revenue lift from their existing programs – that is a lot of money for companies to be leaving on the table.

CP: You have been in the email space for a long while, with Responsys for almost a decade, and have witnessed and influenced transformations in the digital marketing landscape. How are you seeing the improvement of “tearing down the walls between email marketing and digital marketing”?

SO:  There is a lot of great data out there, but still, more marketers should be taking advantage of it. The results of leveraging web behavior are apparent; and marketers are using it more and more, yet there is still a huge opportunity there.

Also there is wider adoption of shopping cart and quote abandonment programs out there. However, segmentation and content versioning based on browse behavior is not being as widely adopted even though they offer bigger opportunities than triggering an event based on web behavior. Companies will only have so many cart abandonments in a given timeframe, but they are sending regular (weekly/monthly) promotion campaigns.  If they can version these based on browse behavior of individual consumers, they will dramatically increase conversion of those campaigns which are reaching a much larger audience. Revenue per email will be lower, but the number of emails that browse targeting and content versioning can be applied to will be significantly higher, thus the amount of contribution driven back will be larger.

Additionally, marketing is shifting from the historic acquisition-based marketing and paid advertising that leveraged demographics and various audience data to digital marketing and digital relationships where brands know to whom they are marketing and leverage data in a cross-channel manner – optimizing their messages and campaigns based on a rich data set. Brands really need to think about marketing across channels instead of keeping channels in silos.

CP: Stay tuned for the second half of my discussion with Scott on how marketers can bring their digital channels together to create meaningful relationships with their customers.