Privacy – More or Less

As marketers, we should be gravely concerned about the questions of privacy and the ethics surrounding collection and use of what many email recipients consider private information. Please bear with me as I continue my commentary on the topic

As marketers, we should be gravely concerned about the questions of privacy and the ethics surrounding collection and use of what many email recipients consider private information. Please bear with me as I continue my commentary on the topics.

The line between business and marketing email is often blurred, and what affects one nearly always affects the other. Not surprisingly, privacy—and the lack thereof—is of heightened concern to businesses and individuals alike these days. With new and frequent discoveries concerning alleged abuse by both government and private agencies, this shows no signs of diminishing.

Google Is on the Hot Seat
It’s easy to despise Google. The company is a ridiculously successful behemoth that collects an immeasurable amount of data they then choose to use, sell, share and—seemingly arbitrarily—withhold in their quest to profit from what many recipients of email believe to be private thoughts, browsing experiences, correspondences, search phrases and more.

In two separate cases, Google’s collection and use of email data is being challenged.

In the first, a group of private email users have claimed Google illegally intercepted, read, and mined information from their private email correspondence in order to better understand the recipient’s profile and deliver targeted advertisements. (Wait. That sounds a bit like what I do as a marketer …)

In September, California Judge Judy Koh rejected Google’s bid to dismiss the case based upon their argument Gmail users had agreed to allow interception by accepting the company’s terms and privacy policies.

As the legal wrangling ensued, the lawsuit lost a bit of steam when the judge ruled these plaintiffs could not band together in a class-action suit because the proposed classes of people in the case aren’t sufficiently cohesive. Her ruling may well impact a number of other email-privacy cases in which she will be asked to rule, including lawsuits against Yahoo and LinkedIn. (In other cases, Facebook and Hulu are defending their right to monetize their members’ data.)

In a submission to the court, Google has said users of Google’s email service Gmail should have no “legitimate expectation” that their emails will remain private. A “stunning admission” of the extent to which internet users’ privacy is compromised, proclaims Consumer Watchdog (CW), a US pressure group.

This causes me to ponder: Yes, of course, Google collects more information than we do—but is it simply because they can? If we, as marketers, had the ability to collect to the same degree, would we? Is the difference between Google and my company the temperance with which the small business (compared to the conglomerate) would collect? As I said in my last blog, Spider Trainers—and other marketers—should proceed carefully, respectfully, and exercise care in not just what to collect, but how to use it. But is that a distinction without a difference to the average recipient?

Students’ Consent
In a similar lawsuit, students in California have come toe to toe with Google claiming the company’s monitoring of their Gmail violates federal and state privacy laws. This case, being heard by the U.S. District Court for the Northern District of California, was brought by nine students whose emails were subject to Google surveillance because their accounts were provided in part by Google in their Apps for Education suite; a suite touting more than 30 million users worldwide, most of whom are students under 18.

Google admits to scanning student emails to serve students targeted advertisements even though display ads are not shown in Apps for Education. Contained in a sworn statement, Google “does scan [student] email” to “compile keywords for advertising” on Google sites.

What’s different about this case is the age of the typical recipient. FERPA (Family Educational Rights and Privacy Act) issued in 1974, ensures the privacy of records of students under the age of 18 and, as big as Google is, they should not be immune to legal constraints of this act. Like the previous case, the students are seeking class-action certification for the case.

This begs the question: Are marketers immune? Perhaps in our B-to-C events, we too must be mindful of the age of our audience. Certainly we know that we are collecting more than most of our recipients imagine. What preteen suspects that emails from her favorite store are actually vehicles for accumulating information about her buying behaviors in order to send her more relevant email offers?

Extending Acceptance
The pivotal topic in many of these Google and Gmail users discussions should be this: Even if the sender understood and agreed to the terms and conditions, that consent could not and should extend to the recipient who has not consented and who is probably unaware their data and profile is being assimilated from these communications. The Electronic Privacy Information Center (EPIC) is also concerned about Google’s ability to build detailed profiles of Gmail users by augmenting email-collection data with information collected by Google’s search-engine cookies, though Google denies such cross referencing occurs.

The Government
For most adults, searches are easily defined. If law enforcement suspects of us wrongdoing, they get a warrant, search our house, our car, our locker, and then seize the evidence of a crime. With an email account—be that Gmail or any other—it’s different. Emails are seized first and then searched for evidence. It’s similar in approach to the argument of the Obama administration for collecting every American’s phone records—law enforcement doesn’t know what is relevant until they have reviewed it all. In other words, it’s a fishing expedition on a grand scale.

So, it’s not just the private sector misbehaving if a federal judge has found it necessary to admonish our own justice department for requesting overly broad searches of people’s email accounts—nearly all of whom have never been accused of a crime. It’s widespread, but worse; all data collectors are at risk of being painted with the same brush. It’s coming to this: If you’re collecting data, you must be committing some sort of offense in the form of invasion of privacy, and perhaps even acting illegally. (Wow! All I wanted was to send you a personalized dog food coupon because you have three mastiffs and a poodle named Fred, Pete, George, and Ginger.)

In this case against the justice department, Judge Facciola concluded prosecutors must show probable cause for everything they seize – especially since it is possible for companies to easily search for specific emails, names, and dates of content relevant to an investigation. It’s therefore not necessary to ask for all electronically stored information in email accounts, irrespective of the relevance to the investigation.

Education
It’s going to become necessary to become educators—we marketers must educate our clients on appropriate collection and use in order to delineate what we do from what is happening with Google, NSA, Yahoo, and others. Without our input, and our self-regulation, it is quite possible that we will be spoon-fed rules of engagement—and likely that those rules will reduce future access to less than what we have now.

With the caching of images and relegation of email to specific tabs, Google is already getting in between us and our recipients by intercepting data to which we’ve already become accustomed. It’s a slippery slope to be sure, but we do have an opportunity to steer this downhill roll in a direction that will protect our ability to be good marketers in a healthy balance with the privacy of our recipients.

In Other News…
In an ongoing case, a U.S. appeals court has again rejected Google’s argument that it did not break federal wiretap laws when it collected user data from unencrypted wireless networks for its Street View program.

In the U.K., the High Court ruled Google can be sued by a group of Britons angered when using Apple’s Safari browser by the way their online habits were apparently tracked against their wishes in order to provide targeted advertising. Google asserted the case is not serious enough to fall under British jurisdiction.

Microsoft is feeling the heat after acknowledging it read an anonymous blogger’s emails in order to identify one of their employees suspected of leaking information. The FBI was involved only after the emails had been read.

Maybe I need a new blog: Privacy Erosion.

Introducing ‘The Integrated Email’ Blog by Debra Ellis

Why is email marketing so effective? Is it the one-to-one communication, ability to connect with customers and prospects on the go, or the provision of instant gratification with one-click shopping? The answer depends on the company and the customer relationship, but there is one universal truth: The combination of interactive communication with self-service solutions makes email the most versatile tool in a marketing workshop.

Why is email marketing so effective? Is it the one-to-one communication, ability to connect with customers and prospects on the go, or the provision of instant gratification with one-click shopping? The answer depends on the company and the customer relationship, but there is one universal truth: The combination of interactive communication with self-service solutions makes email the most versatile tool in a marketing workshop.

My experience with email marketing began shortly after Hotmail launched the first Web-based email service in 1996. A client had compiled approximately 11,000 customer email addresses and wondered what we could do with them. Our first test was a 25 percent discount on any order placed that day. A text-only message was sent using the mail merge functionality in Excel and Outlook. It took over two hours to send all the emails.

Those two hours were quite exciting. We had two computers in close proximity so we could watch the progress of the outgoing emails and monitor sales on the website. Within minutes of starting the email transmissions, orders started flowing in. By the end of the day, more than 1900 orders were received. A handful of people asked to be excluded from future mailings. Over 200 people responded with personal notes. Some were grateful for the discount. Others apologized for not placing an order and asked to receive more emails.

Things are much different today. The novelty of receiving a personalized message from a company is long gone. Spam filters make getting emails delivered a near impossible mission. And the competition for recipients’ attention is at an all-time high. Even so, email marketing remains one of most effective marketing and service vehicles available.

The emails that deliver the best return on investment are the ones that are integrated with the other marketing channels to provide information and service to the recipients. They create a connection between company and customer that motivates people to respond. A successful email marketing strategy builds loyalty while increasing sales.

Many email campaigns today are little more than a systematic generation of one promotional email after another. Discount emails are relatively easy to create and deliver sales with each send, making them a quick way to inject some life into lagging sales. The simplicity of sale marketing combined with solid response rates creates an environment where marketers are reluctant to move beyond the easy, low-hanging fruit.

In addition to generating sales, discount marketing also trains people to always look for the best price before buying the company’s products and services. It is not a sustainable strategy because there will always be another company that can offer lower prices and lure customers away. A better plan is to develop an integrated email marketing strategy that educates and encourages people to develop a relationship with the company. This requires more effort, but it delivers loyalty and long-term results.

Every email that a customer or prospect receives is an opportunity for the company to establish itself as the best service provider and solidify the relationship. Best practices include:

  • Using a valid return email address so the recipient can respond with one click.
  • Sending branded emails that identify your company at first glance.
  • Mixing educational emails that provide “how to” information for products and services with new product launches and promotional messages.
  • Transactional emails that communicate shipping information and challenges so customers aren’t left wondering, “Where is my order?”
  • Highly targeted and personalized emails designed to engage customers and prospects at every point in their lifespan.

Finding the right combination of educational, event and promotional emails requires testing and measuring results for incremental improvements. The resources invested improve relationships, increase sales and create a sustainable marketing strategy.

Note: Over the next few months, we’ll feature winning and losing email marketing strategies and campaigns on this blog. If you would like to share your company’s killer emails, send them to Debra at dellis@wilsonellisconsulting.com.

An ABC Introduction to Data Mining for Dollars: Slicing and Dicing Your In-House List for Profit (Part 2 of 2)

In my last post, I introduced the RFM method, an effective direct response strategy to slice and dice your list for better conversion rates. The “R” represented recency—how long your customers have been with you. Today, I’m going to talk about the other components of frequency and monetary.

In my last post, I introduced the RFM method, an effective direct response strategy to slice and dice your list for better conversion rates.

The “R” represented recency—how long your customers have been with you.

Today, I’m going to talk about the other components of frequency and monetary:

Frequency
This segmentation tactic is another way to break down your house list: by how frequently customers have bought from you. So once you’ve divided your list based on recency, you look at it in terms of your customers’ purchase behavior. First, you identify your multi-buyers—customers who’ve purchased more than one product from you. You then split this list further, segmenting out two-time, three-time, four-time (and more) buyers. Those who have bought from you most often have proven their loyalty and obviously like the products and services they’ve been getting from you.

So if, for example, you’re considering launching a new product with a high price point, these would be your best prospects.

Monetary
Finally, you look at your list in terms of money. One way to do this is to divide your list by the amount of money each customer has spent with you. You might, for example, assign a benchmark dollar amount, such as $5,000, $10,000 or more. Customers at that level make up your “premium buyers.” This is the group that has the most favorable LTV for your company. These are your “VIPs.” Once you discover who your VIPs are, you can design products or offers specifically for them. Let’s say you have some kind of exclusive—and expensive—lifetime membership club. You would market this to multi-buyers who also fall into your “premium buyer” category.

If you offer payment options to your customers, another monetary way to divide your list is according to the payment options they have chosen: monthly, quarterly, yearly, etc. This will help you determine the initial purchase tolerance of each group of customers and which ones may respond best to future price points. As you can see, by looking at your customers’ purchasing habits—recency, frequency and monetary—you can identify the best customers for certain products. And by offering a product to customers who are likely to want it, you can improve your conversion rates.

By using the proven RFM method and other data-mining techniques, I’ve seen conversion rates double and triple. I’ve also seen inactive subscribers’ open rates surge from 0 percent to more than 30 percent.

However, many companies that send emails don’t have the capacity for data mining.
Unfortunately, some smaller businesses or start-up companies typically cut robust email features and analytics for cost savings. Oftentimes, these companies save money using online email service providers that can certainly get the job done, but don’t offer segmentation tools that allow for list analysis, where you can dissect your database into subgroups or “buckets.”

So when you’re searching for an email service provider, try to project what your segmentation needs may be going forward and if data mining is a strategy that you’ll want to deploy.

Hot Tip! When looking at email marketing companies, make sure you ask if there’s a list segmentation or data mining feature that can easily be done through their email platform. Find out the level of segmentation capacity (how far the segmentation of data can be drilled down to); if certain segmentation features are a standard feature or an upgrade; and what those costs may be on a monthly basis. Sometimes it may be an additional fee, but will certainly pay for itself over time.

Some Email Industry BS We Should All Be Wise to by Now

Quick! Which email service provider has the best delivery rate? Don’t know? Neither do I. Let’s try and find an answer. According to a list put out by ranking firm topseos, Pinpointe On-Demand has the best delivery rate of 10 email service providers it ranked for January. Let’s just cut to the real problem with Topseos’ rankings list—that it mentioned ESPs’ so-called “delivery rates” at all.

Quick! Which email service provider has the best delivery rate?

Don’t know? Neither do I. Let’s try and find an answer.

According to a list put out by ranking firm topseos, Pinpointe On-Demand—as topseos referred to it—has the best delivery rate of 10 email service providers it ranked for January.

The company name is actually just Pinpointe, but let’s not quibble.

No, let’s just cut to the real problem with Topseos’ rankings list—that it mentioned ESPs’ so-called “delivery rates” at all.

ESPs don’t have delivery rates. Or they shouldn’t anyway.

Why? Because every major lever that affects whether email gets delivered to people’s email boxes is under the list owner’s control.

Email inbox providers’ spam filters have traditionally relied on three major metrics to determine whether or not email coming from a specific sender is spam: the number of spam complaints, the number of bad addresses a mailer tries to reach and the number of spam traps they hit.

And these days, ISPs are reportedly increasingly looking at engagement metrics—clicks and opens, for example, or lack thereof—to weed out unwanted mail.

All of the above-mentioned metrics are directly attributable to the sender’s behavior, not the ESPs’.

Yet, some email service providers tout their so-called delivery rates in their sales pitches.

For example, Constant Contact claims its delivery rate is 97 percent. But when one reads why its delivery rate is so high, it becomes clear

“We hold our customers to high standards with good email marketing habits and practices,” says a headline on the page touting Constant Contact’s delivery rate.

There is nothing wrong with Constant Contact touting high standards.

And this isn’t to say an ESP has nothing at its disposal that can affect delivery rates. For example, an ESP can affect deliverability by throttling-or sending the messages at a slower rate—so ISPs are less likely to block them.

Also some ESPs have better support structures in place than others. As a result, delivery rates can reportedly vary from ESP to ESP. But it’s not the ESPs’ delivery rates we’re discussing here. It’s the senders’ delivery rates.

This may sound like a ridiculously minor quibble. But referring to email delivery rates as the ESPs’ shifts responsibility for behavior that helps ensure high delivery rates from where it belongs—the sender.

Senders of commercial email must continuously be made aware that the responsibility for ensuring high email delivery rates lies mostly with them and there’s not an ESP in the world that can magically overcome the deliverability consequences of sloppy email address acquisition practices and poor list hygiene.