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.