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The 4-Second Challenge

If E-mail is the killer application of the Internet, then E-mail marketing ought to be considered the Net’s most lethal weapon. It is in the hands of Donal Daly, the CEO of Kirkland’s NewWorld Commerce. Indeed, Donal and company have gained an international reputation as the world’s “most-wanted” eMarketers. Want evidence? In recent weeks, the Direct Marketing Association (DMA) has paid NewWorld  its highest compliment, not by presenting a prestigious award, but by hiring the E-mail strategists to handle its direct mail online using NewWorld’s e-marketing campaign management solution, NewWorld Direct. And locally, the WSA has tapped the company for its first eMarketing campaign. What’s disarming about this killer marketing scenario is that Donal Daly is about as easy-going as they come, right down to his soft Irish accent. . .


According to Donal, all E-mail faces the 4-second challenge. If people don’t comprehend what the message is about in four seconds, then the marketer will fail. We sat down with the engineer-cum-marketing wunderkind to learn NewWorld’s rules and regs for raising the eMarketing ratio for success. – LS
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Seattle24x7: Donal, how did an engineer like yourself end up as the king of the new world of E-mail marketing?
Daly: I’m an engineer by background, but I’ve been in some kind of sales and marketing role for most of my life. The most relevant aspect (technically) of my background is in artificial intelligence –that is how people react and respond to things — which is at the basis of effective marketing. It’s the art and science of technology and marketing. I did spend a year in civil engineering, though. Very boring.

Seattle24x7: You’ve also written two books?
Daly: Right. One is about expert systems, which is an area of artificial intelligence that plays into things like business rules, procedures and processes, and the second is in business strategy.

Seattle24x7: Many people seem to confuse true interactive personalization on a site with a sophisticated rules system?
Daly: We use a combination of both. I think there is what I would call data-sensitive personalization. “I know your name. I can address you personally.” And then there’s also context-sensitive personalization. That’s more to do with the idea that, given various attributes, I know who you are as an individual. I can make assumptions, and I can correlate those to a particular profile. And consequently, I can customize and/or personalize the communication based on those variables.

Seattle24x7: You use the term eMarketing to describe your work, and not databased marketing, per say?
Daly: Our email marketing solution automatically implies database targeting and segmentation although we don’t use the term database marketing because it focuses people on the database instead of focusing on people. Database management is all about list management. And one of the issues that I’ve had with marketing for many years is people forget about looking at it things from the customer’s perspective.

We have what we call the 4-second challenge here. People get so many E-mails. If they don’t now what the message is about, why they should care, and what they should do about it in four seconds, then the marketer will fail.

Seattle24x7: Does HTML-mail capture attention sooner than text-based E-mail?
Daly: It depends on your audience. It depends on how good a wordsmith you are. You’ve got fifty characters to work with in the E-mail header – whether it’s text or whether it’s HTML. You need to focus on what words you’re using to get the person to the next stage in the marketing process.

Seattle24x7: You’re more concerned with the quality than the quantity of response?
Daly: People tend to think, well, I’ve got 100,000 names in my database, if Ii just throw mud on the wall some of it will stick. I’ve often quoted that with the Internet you can screw up much faster than you could before. The database element is very important, however, in that the quality of the response is going to have a very strong relationship to the quality of information you hold in your database. The important thing about database marketing is that it doesn’t stop with database.

Seattle24x7: You have some guidelines about do’s and don’ts in the first E-mail?
Daly: Absolutely. I will never do a first contact with a new prospect by E-mail. I might do it by direct mail. I might do it by print ad. I might do it by a trade fair. I might do it by a tele-sales activity, but I will never do it by E-mail.

Another thing we say to people who use our product, and services, “please don’t ask somebody for money in the first communication. If the first message that I hear from you is, “’Hi. life is sweet, and can I have your money, please?”’ I’d like to say no. But, if you say, “’Look, I’d like to introduce myself. I have some information and things which I think can be of value. What I’d like to is start a series of communications with you. And by the way, you own the relationship, you can turn it off at any time,.”’ That’s different.”

Seattle24x7: You also don’t believe in renting mailing lists?
Daly: I’ve said many times, that in E-marketing, if you rent a list, you will fail. This is based on a number of things. One is that effective E-marketing means respect for the customer. That’s not to say that people who do direct marketing and databased marketing don’t respect the customer,. but E-mail is a lot more invasive than normal direct mail. I don’t want to receive stuff from somebody that I haven’t asked for.

Lists vary between opt-out, opt-in, and maybe somebody with double opt-in. Opt-out lists are “check the box if you don’t want to receive stuff, Opt-in is check the box if you do want to receive stuff. And double opt-in, check the box if do want to receive stuff and if you don’t respond to communication I send to you I’ll presume that you don’t want it. The further up the opt-in customer respect curve that you go, the more effective your marketing is — 100%, without any question, based on lots of empirical evidence.

Seattle24x7: You use the term “permission marketing” on your Website. One of those who has used that term a lot is Seth Godin [author and former VP Direct Marketing for Yahoo!], who recommends promotions and contests to get people to give their permission. Do you think promotions and rewards are effective? What do you use to gain permission?
Daly: I have two issues with Seth Godin (although most of his stuff I like.). He’s got a basic premise that says, a customer goes through a cycle — stranger-to-friend, friend–to-customer, customer-to-long term relationship. Well, I don’t want anybody as my friend whose primary premise is turning me into their customer. I’d be much more interested in turning my customers into my friends. That’s a retention- focused idea rather than an acquisition-focused idea.

The other thing is the balance between reward and recognition. What’s more important to you? If I say, “Larry, if you sign up for my newsletter I’ll send you five bucks?” Or if I say, “Larry, if you sign up for my newsletter, I’m going to invite you to participate in my product strategy paper. I want you to be a part of this special group and I do actually value your opinion as opposed to just your name.” They are very different ends of the spectrum.

Seattle24x7: So you feel recognition is more meaningful than reward?
Daly: I think recognition is a lot more pertinent to the business community. Rewards, as well proven by coupons and various things, work in the consumer marketplace. It depends on the depth of the relationship that you’re looking for. The airline industry, for example, has proven the value of recognition over reward for a long time. Savvy business people will do special things because they are part of a Club like The Red Carpet Club.

Seattle24x7: What is the number of contacts you would recommend in a mailing effort? Can you do it in one shot, or must it be ongoing?
Daly: Well, I think there are two parts. The first is that I think it is entirely possible to get permission on the first contact. And that assumes you have the appropriate value to offer in return. One of the things we’ve done around the world is contact people in our target markets and said, well, “We want to do an E-Commerce survey across various industries. We’d like to invite you to participate. If you do, you’ll get a copy of the results and you can compare yourself against your peers, something of value.” We get about an 80% hit rate of people saying, “Yes, I would like to be part of that and please send me information, including how I can turn it off whenever I want to.”

Frequency also depends on what you as a customer say your preferred frequency is. It’s important to continue to give value. It’s not possible to say that there’s a frequency that applies equally across business-to-business and business-to-consumer.

Seattle24x7: Are NewWorld Commerce clients involved in tracking their E-mail campaigns?
Daly: Our clients can build it, deliver it and track each campaign entirely from their browsers. They can see results of a campaign as they are coming in…in real time. Once the mailing goes out, they have a sense within an hour of how successful it is going to be, and I’ll know with 90% certainty, within 24 hours. It’s very easy to test and run….test and run.

Seattle24x7: Donal, I know you have to run, so thanks for your insights.

Larry Sivitz is the Managing Editor of Seattle24x7.

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NewWorld Commerce
5555 Lakeview Drive, Suite 202,
Kirkland WA 98033,
T 425 803 6800
F 425 803 6801

Web site
www.newworldcommerce.com

Founded
NewWorld Commerce was founded in 1994. It is a privately held company.

Major Products and Services
NewWorld Commerce Direct
NewWorld Direct is a self-service emarketing solution that lets marketers create, manage and deliver complete marketing campaigns online. The solution enables marketers to conduct campaigns via interactive marketing campaign Web sites and email communications. It provides sophisticated targeting and detailed measurement to maximize return on investment. NewWorld Commerce Services provide expert emarketing knowledge, tactical and strategic implementation, and user support to deliver sustainable value.Customers

Customers include Emerald Downs, WSA, WorldCom, Heineken, Oracle and Pigsback.com, among others.

The NewWorld Direct emarketing Sales & Revenues
N/A

Funding
NewWorld Commerce has had a first round of financing of $5.6 million from eVerger.

Infrastructure
100 employees. Offices in Seattle, Ireland, Sweden and UK.