Email 2.0: Making Email Cool Again

Published April 22-May 7, 2022

Like ICE to EV

For a hundred years, cars have used internal combustion engines. The burning of fossil fuels have been shown to be harmful to humans and the environment. Tesla’s innovations in batteries and software have laid the ground for a new type of car: electric and autonomous, completely transforming the driving experience and creating a better future for us and our planet.

Modern marketing is on the cusp of a similar transformation moment. Brands have been plagued by “adwaste” – the half of their spending that ends up in reacquisition of customers and wrong acquisition causing great harm to company P&Ls. Customers are flooded with me-too messages from brands in their inboxes which they either ignore or delete. The result: customers have stopped listening to brands. This is leading brands down a negative spiral of overspending on acquisition and less on retention, growth and cross-sell, thus increasing brand erosion.

Marketing needs a Tesla-like solution to transform what is at the core of commerce – the brand-customer relationship. Welcome to Email 2.0.

Marketers are wasting half their budgets in the mad race to acquire new customers. With customer acquisition cost (CAC) rising rapidly year on year, this “doom loop of ad spending” is eating away most marketing budgets, leaving very little for building direct, data-driven deep relationships with their existing customers. Unless addressed quickly, this “adwaste” is going to cause lasting damage to brand balance sheets – and even threaten their existence. Big Tech is today’s equivalent of Big Oil – sucking away the oxygen of profits from everyone else. The flawed actions of modern marketers has meant that they have become collection agents of the ad giants – digital serfs, sacrificing their company’s profits at the altar of Google, Meta (Facebook) and Amazon, the Gods of the Tech Age.

The solution is not about trying to build the equivalent of “green oil” by optimising spends on adtech, reinventing cookies and creating privacy frameworks. The answer to the problem of adwaste lies not in building a better mousetrap but eliminating it entirely. The only way to do this is to address the problem that is at the root of it all: attention recession on the part of the consumers. Attention deficit leads to retention recession which in turn causes continuous customer churn. So far, the only solution that marketers have come up with is with transaction-linked incentives in the form of discounts and offers. All these gimmicks do is negatively impact profitability without improving loyalty.

What marketers have missed is that addressing attention recession requires building a hotline to their customers and taking the 10-20% view rate of push messages to 80-90%. Only then will they be able to lower adtech spends to get their existing customers to listen, gather more data, drive greater revenue growth, and thus improve profitability. Without sustainable profits, a business becomes a money guzzler and eventually dies when investors pull the plug on new funding.

Solving the attention recession problem, eliminating data poverty, reducing CAC is the pathway to driving profitable growth and must become the top priority of every marketer. The starting point has to be reinvigorating push messaging because the only alternative to bring customers back to the website or app for transaction push messaging is massive spending on branding. Email remains the best of the push messaging channels and can in fact improve the efficacy of the other channels. Therefore, the focus needs to be to make email cool again – Email 2.0.

Email 2.0 is the Tesla-like innovation, changing the customer mindset from delete to delight, driving engagement and habit creation, and powering exponential forever profitable growth. It is the only antidote to brand extinction because if customers are not listening, there is no point for a brand to keep speaking. Email 2.0 creates habits by making the sent seen and the seen actioned. It drives mental availability for the brand by becoming a utility in the lives of customers. The power and value of Email 2.0 can transform CMOs into Chief Profitability Officers of their businesses, and perhaps into future CEOs. Email 2.0, like Tesla, can truly make tomorrow’s world a better place for all of us as custodians of brands and customers of products.

Evolution

I wrote about Email2 a few months ago: “Even as email service providers (ESPs) move up and down the stack to add offerings like CDP (customer data platform) and martech features (journeys, orchestration, omnichannel personalisation), the core email channel itself is evolving. The triad of AMP, Ems, and Microns – what I term as Email2 – will transform how customers engage with emails, and help brands in their continuing quest for deepening customer relationships.” I added: “Email2 will bring creativity back into email – brevity, smart copywriting, simplicity of design, and story-telling. It is about persuasion and nudging, rather than hard-selling. It is about getting attention first and brand building, rather than jumping straight into pushing for a purchase. Microns use the Subject line to create the excitement of earning rewards and thus grab attention in an Inbox of otherwise same-to-same Subject lines. Ems limit the display area to a mobile screen thus driving the need for a single, sharp message. AMP offers the opportunity to bring in interactivity – a touch or a swipe which draws the recipient in.” In the series, I also discussed new ideas like Hooked Score, Atomic Rewards and Progency.

In the months since I wrote the series, I have been thinking much more about Email 2.0 and its potential to enhance the user experience and solve the attention recession problem. In this series, I will reframe the Email 2.0 discussion around five innovations: Hooked Score, Atomic Rewards, Ems, AMP, and Progency. Together, they can engineer a habit revolution, convert the end customer’s “delete” mindset into “delight”, and make email cool again.

The reason channels like email retain their importance in the world of Instagram and Tiktok is that email is a push channel and emails are sent to identified users. Push channels are important because they help bring customers back to brand properties (website and app). In the absence of engagement on push channels like email, SMS and push notifications, brands will be forced to use intermediaries like Google and Facebook to do the outreach to their own customer base at prohibitively high costs. Push channels are an integral part of the “omnichannel personalisation” vision that brands have.

My company, Netcore Cloud, has been involved in the world of email marketing for more than 15 years. We began in response to requests from our enterprise customers to help them do “mass mailing” to lists – since we already had email expertise and were helping set up and manage their internal email servers. Through these years, email kept growing and growing. Now, Netcore does over 18 billion emails a month and serves brands globally. In India, our analysis shows that 75% of emails sent by brands to their customers go through Netcore’s platform. Email’s success has helped Netcore extend into additional layers in the martech stack – automation, journey orchestration, analytics, personalisation, and nudges (product experience.) Having been among the “originals” (early Email Service Providers), Netcore is now at the forefront of reinventing email.

Benchmarks

Netcore will be publishing its Email Benchmark Report 2022 soon. From the introduction:

2021 proved to be a continuation of 2020 in many respects. Just like everything else in our lives, email marketing went through an evolution.

Email marketing prevails as one of the most trusted channels at the marketer’s disposal to connect with customers, convert them into loyalists, and deliver on the bottom line. Email has taken big leaps and bounds in 2021 with interactivity, privacy, and multimedia.

Since the last two years of the global pandemic, email has transformed to become a crucial channel for personalized and conversational marketing. Providing a great customer experience through emails has been the preferred approach.

Email marketers reduced their frequency of emails but increased personalization, smart segmentation, and automation. We observed that marketers are becoming more AI-savvy as advanced technologies help to predict their needs, target audience, and make their job easier.

2021 was a year of growing awareness of user privacy, brand authenticity, nurturing customer relationships, and optimizing the customer experience. The traditional ways of marketing campaigns and sales pitches have no place in today’s digital-first marketing landscape.

The only way for you to have lasting success with your marketing programs is to keep up with these changing scenarios and master the email channel. In 2022, your email program needs to not only communicate but also create tailored experiences for your customers.

As user privacy becomes central with Apple’s MPP regulations, data attribution will become much deeper in 2022. Collecting zero-party data and analytics will become crucial for every experience-focused marketer in 2022.

Among the key metrics from the analysis of the emails:

Average open rate: 8%
Average click rate: 0.25%
Average click to open rate: 3%

In other words, for every 1000 emails, 800 of them are being ignored and just 25 emails are clicked through to the brand website or app. And these numbers are for the channel with the best RoI! Without their push messages being seen and acted on, it’s little wonder that brands, facing a serious attention recession problem, are pushed towards new customer acquisition. And yet, the focus for brands is on optimising acquisition and not building a better pipe. This is the biggest mistake being made by brands. By shifting budgets from adtech to martech (and Email 2.0), brands can reduce adwaste through a better hotline, ad targeting, personalisation and intent data. This is where Email 2.0 pioneered by Netcore comes in. Netcore’s enduring legacy of innovation, growth and relationships gives it a unique position to envision the future.

Forrester Wave

Netcore’s success as an ESP (email service provider) got recognition from Forrester in its recent Wave report on Email Marketing Service Providers (Q1 2022). Wrote Forrester’s Shar VanBoskirk: “The need to reliably communicate location-specific inventory updates, sanitation protocols, or changes to branch availability — combined with the appeal of a delivery vehicle for low-cost promotions — maximizes email’s moxie. Sixty-five percent of reference clients we surveyed for this report said that email marketing is somewhat or significantly more important to their companies today than before the COVID-19 pandemic. But email excitement can lead to careless correspondence. Surging email volume and data restrictions make preserving email addresses — and using them responsibly to unlock user identity and permission — critical.”

Forrester surveyed 13 email companies. Netcore debuted as a “Contender” – in the middle of the quadrant evaluating the current offering and market presence of the surveyed entities. From the report’s comments about Netcore:

Privately held and profitable Netcore Cloud is the most experienced email marketing vendor you’ve never heard of. That’s because it sends 55% of all the promotional emails in APAC and has just a sliver of business in the US. Netcore believes that email is about experiences, not just messages, and sells a related suite of customer and product experience solutions as well. While we’d love more behind its vision than just “send the right emails, to the right users, at the right time to create a memorable inbox,” Netcore does land its target market. The vendor is growing 40% year over year. Netcore’s campaign creation interface, querying capability, and ability to measure engagement outside of just opens and clicks are competitive with its western platform peers. Plus, this vendor is ahead of the curve at applying AI to marketer workflow. It offers in-line predictive segments and predictive content/offer performance to guide campaign creation. Netcore’s data integration is less flexible than that of the Leaders in this evaluation, so it primarily uses customer behaviors and profile attributes instead of contextual data to optimize message content and cadence. It also lacks packaged integrations with most major content management systems and doesn’t support distributed or franchise businesses.

So, even as there is room for improvement, Netcore has a very strong story for its enterprise customers. Its dominance in the hyper-competitive mobile-first markets of India and South-East Asia has pushed it to think deeper about the future of email. And from these conversations has emerged what I believe is the answer to the twin challenges facing every brand (rising CAC and lack of data): the pioneering innovations of Email 2.0.

Innovations

In multiple conversations I have had with marketers through the past months, two problems have stood out: rapidly rising customer acquisition cost (CAC) and the need for zero/first-party data. The outcome of increasing CAC is visible in the advertising revenues of Google, Meta, and Amazon, who together generated over $350 billion and are growing 30-40% growth rates. Brands are competing aggressively to acquire new customers and paying more and more each year for new customer acquisition. This is an arms race that will prove detrimental to brand profitability. The only way out is to build deep relationships with existing customers and reduce the wasteful spending (what I call “adwaste”) on reacquisition and wrong acquisition.

The first step brands need to take in building these deep relationships is to solve the problem of attention recession and build a “pipe” (hotline) to existing customers. This is where email comes in. Through the past two decades, it has been a great friend of marketers and continues to deliver the best RoI. Over the years, there have been improvements in the email experience: anti-spam filters have continuously improved to help cleanse the inbox of spam and unsolicited messages, and innovations like segmentation, personalization, BIMI, STO (send time optimisation), and SLO (subject line optimisation) on the back-end are all helping improve relevance.

But there is trouble in paradise. Email open rates hover in the 10% range for marketing (promotional) messages, which means 90% messages sent by brands are being ignored by their customers. New push messaging channels (RCS, SoIP and WhatsApp) are bringing interactivity and two-way engagement. Measurement challenges are rising in email with Apple’s privacy initiatives and image caching being done by both Apple’s email client and Gmail.

The big questions therefore are: can email step up to solve the marketer’s CAC and data challenges? What is the solution to attention recession? Can email improve engagement from its low rates? Can it serve as the base for a reliable pipe to enable brands to communicate reliably to their customer base? How can the email experience be modernised and made interactive? How is Email 2.0 different from Email 1.0?

It is this world of brand-customer engagement that Email 2.0 seeks to conquer. The starting point is to focus on Hooked Score as a metric to measure engagement intensity at an individual level, thus shifting the conversation from aggregate opens and clicks to stickiness and streaks. AMP makes emails dynamic, interactive and real-time by enabling apps and micro websites inside of emails. Ems combines microcontent and stories to make emails a daily utility in the lives of end customers and improve the mental availability of the brand. Atomic Rewards brings in gamification and micro-incentives to enable marketers to nudge customer behaviour. Progency (product-led agency) extends the internal brand execution team by combining product, professionals, and process to deliver KPIs and get paid based on performance. Taken together, these five innovations of Email 2.0 can engineer the habit revolution by making email cool again, enable marketers to cut wasteful adtech spending and collect more customer data, and enable CMOs improve revenues and profits.

Hooked Score

Hooked Score shifts the focus from measuring just aggregate opens and clicks to (a) measuring stickiness and streaks, and (b) getting these metrics for individuals. It can thus create cohorts based on engagement intensity. A simple way to measure Hooked Score is to use a multi-point exponential moving average. This places greater importance on recent actions.

Streaks are very important for marketers but haven’t received adequate attention. The goal needs to be to ensure that every message sent is being read and engaged with. It means creating an email habit. If this is not being measured, marketers have no hope of improving it. The current focus is on campaigns – segmenting the email base and then sending out a common message to that base and then measuring the efficacy of that campaign. While the overall numbers are useful, marketers need to shift focus to thinking of their customer at the receiving end of the campaigns.

Here are some of my past writings on Hooked Score:

Martech’s Magicians: Microns, Micronbox and µniverse (Part 11): “One of the key objectives is to win the transaction upstream game. This means focusing on attention, engagement and habits. A simple way to measure this is to track all the actions that a customer does with the brand communications and properties.”

Email2: Energising Engagement (Part 6): “First, measure Hooked Score for all email subscribers. Also calculate aggregate, average, and median scores. This can also be done for the past 6 months to get a trendline of change. As a side project, Hooked Scores can also be correlated with CLV (customer lifetime value) for each customer. Second, a goal can now be set for the email engagement team. Let us say the target is to double the aggregate Hooked Score over a year, which means it needs to grow 6% monthly. The email engagement team can then make its own tasks: they could focus on reactivation of the inactive base (those with Hooked Score of 0) or do a branding series with existing customers to drive greater engagement. As another side project, the team can track changes in Hooked Score with NRR (Net Revenue Retention).”

AMP (Interactive Emails)

AMP is a technology introduced by Google for making emails interactive. It enables the creation of microsites in emails. Think of AMP as enabling email apps. AMP is a big leap forward. It eliminates a click to the website or app for a wide range of use cases: filling a form, gathering feedback, scheduling appointments, showing live content, creating interactive games and collecting zero-party data. AMP makes email a two-way channel.

There have been two challenges so far which have limited AMP adoption. First, AMP emails are complex to create because of software that has to be written, meaning marketers need to add a new skill besides creative and design. Second, AMP is limited to the Gmail app and Chrome browser. It is not supported by Apple. As a result, in the developed markets, over half of recipients will not be able to view AMP emails. (A fallback design is there in every AMP email for non-AMP mail clients.) The situation is very different in countries like India where Gmail accounts for 85-90% of email lists.

The creation problem can be solved by the creation of AMP editors. (Netcore is also launching one shortly.) AMPlets which can be easily inserted into emails are another innovative solution. In fact, brands should consider creating an AMP-based interactive footer with multiple AMPlets. The client problem is a much harder one to address – but whether it is 50% or 90% of their base, brands should make use of it because the benefits in terms of attention and engagement are big.

Here are some of my past writings on AMP:

Microns and AMP: A Powerful Combo: “AMP gives email marketers the opportunity to transform the user experience. Emails can do so much more – forms, image galleries, product cards, games, dynamic data, and of course, quizzes. One has to really experience it to feel the possibilities and imagine a new future for emails… For the mission of “No Email Unopened”, AMP-enabled emails can be a huge enabler.”

Email2: Energising Engagement (Part 3): “AMP was introduced by Google a few years ago to make emails interactive. Think of web pages in the late 1990s, and you will get the idea! Actions can be taken within emails without having to click through to a web page or an app… The challenge in AMP is the cost of design and coding; the solution is to create templates which can be used by marketers with limited friction.”

Ems (Microcontent and Stories)

Ems are short, informative emails which tell stories. They fit on a single mobile screen so customers know they don’t have to see an endless scroll. They offer something useful rather than just the usual promotional content. Ems also can tell continuing stories to keep recipients engaged. Above all, ems ensure that there is something new daily – thus increasing the brand’s mental availability. Media companies have perfected this: their emails reach our inbox at the same time daily to the extent that we start expecting them. Imagine if brand emails could elicit that same feeling!

Brands send 7-10 campaigns a month. Imagine if a brand could send an email daily which is delivered at the same time. Days when there is no campaign can become the days when Ems are sent. They can be identified in the Subject line with a special character (an epsilon, perhaps) which lets the customer know this is a short, informative email and will not need more than 15-30 seconds to consume. For every brand, it is possible to create relevant microcontent. Ems could also become games that help with recall of some brand attributes.

Here are some of my past writings on Ems (in the early writings I had termed Ems as Microns):

Microns and Brands: Made for Each Other: “Think of all the moments when we would like to get something and which are not leveraged by brands. A book I showed an interest in, a product I want to buy, an article I read, a movie that piqued my interest, a habit I want to develop, a person or idea I am keen to know more about, a concept I want to dig deeper into, a smartphone I just bought and whose features I want to understand. All of these are what I think of as “micron moments” – when a short duration micron subscription could be triggered to create a win-win for both brand and consumer, publisher and subscriber, sender and receiver.”

Microns: Theory and Economics: “Less can be more. Small can be big. Signal can and must overwhelm noise. That’s why microns which can be fully consumed in 15-30 seconds. Information-rich, permission-led microns can transform email communication. Think of microns as driving the minimalism revolution in brand-customer interactions…Microns can thus open up a new, unexplored world for marketers – long-term relationship building with informational content, going beyond the transactional and promotional mails with a focus on branding, and leveraging moments to trigger short-duration enriching engagements.”

Microns: Making B2C Emails Better: “Microns, by their very nature of being short and info-rich, are likely to have extremely high engagement – they will be read on arrival into the inbox. Every micron opened will lead to subsequent microns being delivered into the inbox because of the way the algorithms work. Microns can thus be used for something that email has not been used for – branding. By having emails delivered at a near-zero cost into the inbox, brands have an infinitely scalable opportunity to be in front of their current and prospective customers every day.”

Email2: Energising Engagement (Part 3): “Ems thus can become a utility in our lives – coming into the inbox at the same time, like emails from media sites. Most emails today are hard sells – buy this, see that. Ems, on the other hand, focus on attention and habit creation rather than the immediacy of pushing for a transaction. Ems can be the way brands build hotlines to their customers. They can be a great asset for reinforcing branding for existing customers. Ems create “email moments”.”

Atomic Rewards

Atomic Rewards bring gamification to emails. They are micro-incentives to help marketers get attention, drive engagement, nudge behaviour and create habits. Think of Atomic Rewards as a loyalty program – linked with attention (time) rather than transactions (money). Atomic Rewards offer the perfect solution to Attention Recession; these rewards can be embedded in AMP-enabled emails or in Ems to reward streaks.

Atomic Rewards will work best when they are offered across brands because no single brand can offer enough to make it exciting. Rewards filling the email inbox is when we will get a mindset change from “delete” to “delight”. Atomic Rewards make perfect economic sense for brands – for a small cost, they can ensure the hotline to the customers stays active because if the customer becomes inactive or churns, the cost for the same attention will be many times higher via the adtech platforms.

Here are some of my past writings on Atomic Rewards (Microns are emails with rewards):

Microns and Loyalty: Gamifying and Rewarding Attention: “Adding elements of loyalty and gamification can make microns much more rewarding. Our attention has a lot of competition; if someone is willing to pay us for it, they have the potential to stand out. By disintermediating the media and ad platforms, brands can build a direct hotline to their customers, with the rewards working as magnets for visibility, engagement, actions and eventually, transactions.”

Imagining Mus: An Attention-Action Currency: “Mus are points that are earned by consumers for actions done in their engagement with brands. Initially, Mus are earned within microns: opening a micron, clicking a link, filling a survey, referrals to family and friends. Later, they could be extended beyond microns – clicking on SMSes or push notifications, downloading an app, completing a profile to share personal information with a brand, and so on. Mus are a transfer from a brand to consumers. Mus are thus earned by consumers. They can be spent on rewards or gifted to others. As the use of Mus expand, they can become currency – a medium of exchange.”

Stop Loss: The Power of Attention Messaging: “By ignoring the power of Attention Messaging, brands are missing a key chapter in their playbook. By spending almost 10X more on the acquisition of new customers than on retention and growth of existing customers, they are simply feeding the profit machines of the tech giants (Google, Facebook, Amazon). By not building deep relationships, they are leaving their customers open to being targeted and acquired by competition, thus leaving their own future vulnerable. Attention Messaging holds the secret for brands to create the twin moats of profits and monopoly.”

Atomic Rewards: The Solution to Attention Recession: “Attention and engagement are upstream of transactions. Brands have focused on rewarding transactions either through loyalty programs of their own or partnerships with credit card companies. But what has been missed (or ignored) is what comes before the transaction – our attention. This is where “atomic rewards” can be the game changer as the solution to attention recession…Attention and engagement need as much focus as marketers are doing with customer journeys, onsite and in-app experiences, and transactions. These Mu moments can be the secret to engineering profitable customers for life.”

Email2: Energising Engagement (Part 4): “Microns are emails (and can be any push message later) which have a micro-incentive for a micro-moment (an action to be performed by the recipient). These actions could be opening the email, clicking on a link, filling out a form in the email, answering a quiz, or just providing feedback. The subject line of the email uniquely identifies such an email, and the points earned are updated in the email footer. In my writings, I termed this concept of incentives as “Atomic Rewards” and called the points as “Mu” (µ). Microns are the carriers of Atomic Rewards. They are emails which gamify engagement…The big idea behind Atomic Rewards: to get customers to pay attention pay them for their attention. (Else one will pay Google and Facebook 100X more for them if they churn.)”

Constructing the µniverse: “µniverse exists in cyberspace. There is no single owner who decides, only rules that determine the actions. It is a two-sided marketplace, an exchange. It connects brands with their customers. Unlike the BigTech companies who play the role of intermediary and take a huge cut, µniverse simply enables a direct connection via its µ token as enabler. It lies at the intersection of three worlds: gaming, loyalty, and crypto.”

Progency

Progency is a new type of agency built on top of a product (in this case, a martech platform). It is thus a product-led agency. It combines product, people (professionals), process, and pay-for-performance. It brings to the world of martech and customer retention, growth and cross-sell the ease of outcome-driven marketing that adtech agencies have done for new customer acquisition.

Progency extends the brand’s internal marketing team to deliver on specific KPIs. This lets the brand team focus on business as usual. Progency – like IT consulting teams focused on specific tech platforms – brings in the necessary expertise to solve specific problems like reactivation, increasing Hooked Score, driving referrals and collecting zero-party data. Each of these initiatives can be measured, improved and rewarded.

The twin goals for Progency are to increase revenues and reduce spends on adtech. It can thus bring in a focus on profits. For this, Progency needs to bring together diverse skill sets – combining creative and design, with software and analytics. Email 2.0 is what can be best driven by Progency, with very specific 30/60/90-day plans.

Here are some of my past writings on Progency:

The Coming Martech Era: Driving Exponential Forever Profitable Growth (Parts 13 and 14): “The traditional agency model needs a revamp for the coming martech era. The pre-digital agencies, built for print and TV, were driven by creative and focused on branding. The digital agencies, built for Google and Facebook, added new skill sets like analytics and campaign optimisation, and focused on new customer acquisition. The next generation of agencies will be built atop proprietary digital experience platforms and will focus on customer retention, growth and reactivation. This new agency is what I call “progency” – product-led agency. Like the adtech agencies, it will charge based on performance. This will ensure measurement and accountability – two key tenets for outsourcing core activities.”

Progency for Martech: The Missing Link: “The progency will be different because for the first time an agency will build solutions on top of its own product. In the past, agencies have not focused on having their own internal products. Adtech agencies have used products provided by Google and Facebook, and then overlaid their creative and analytical skills to deliver results. The progency will be tech-first, owning a martech platform. Ownership is important because only the developers will fully understand the power of what their platform is capable of. This is what will provide a sustainable competitive advantage to the progency… The progency is the missing link in today’s martech ecosystem. Martech platform providers need to expand their offerings to create a performance-based business unit which can interface with marketing departments to provide the solutions and outcomes they need. Marketing managers need to go beyond trying to buy every new point solution and instead focus on the KPIs the business needs to drive profitable growth. Only when the two meet will brands see success and the martech solution providers benefit from an addressable market that is 10 times larger.”

Example: Wordex

We have discussed the various elements of Email 2.0: AMP and Ems to make emails better, Atomic Rewards to power a loyalty program for attention, Hooked Score to measure engagement intensity, and Progency to make it happen.

Here is an example of how a composite of AMP, Ems and Atomic Rewards can work together to drive greater engagement. Most of us are familiar with Wordle. Imagine if brands could use the same game idea to drive more engagement. We have called it Wordex.

Exhibits A and B show the AMP-enabled email delivered into the inbox. It can also be considered as an Em – short, informative, sequenced. The µ in the Subject Line identifies it as a micron – an email with rewards. The number next to µ (1803 in this case) shows the total loyalty points I have. When I open the mail, the MuCount in the footer (shown in Exhibit B) has increased by 1 – so I earned 1 µ for opening the email. This real-time feedback is important to ensure customer delight.

Exhibit C shows the results as I fill in the letters to guess the word. I am doing all this in the email itself – without clicking to a website. This is the magic of AMP! Exhibit C shows me also earning more Mu by guessing the word in 3 chances. Exhibit D shows the increment in MuCount with my newly earned rewards. Exhibit D also has some AMPlets – to rate the email and unsubscribe.

This is email like we have not seen before! Interactive (AMP), Informative (Em), Incentivised (Atomic Rewards). Together, they can combine to make push messaging so much better. This is the way to drive a multi-fold increase in email open rates and engagement, thus laying the foundation to building the brand hotline to each customer. A brand can begin with 10% of the user base entrusted to Progency to combine regular campaigns with Ems, with every email AMP-enabled and enriched by Atomic Rewards. Hooked Score can be used to do an A/B test over a 30-day period. The results should conclusively prove that the problem of Attention Recession can be solved. This creation of the pipe is the path to profitability.

Pipe Power

Email 2.0 is not just the pipe to customers but also the path to profits. Building a hotline to existing customers is a mission critical agenda for brands. Without customers listening to their messages, the connection with the customer is broken, leaving brands with no other option but to join the unwinnable race to spend on the Big Tech platforms to acquire new customers. Email 2.0 is thus the solution to attention recession, retention recession and continuous customer churn; it is the path to profitability.

Put like this, it all seems so obvious. So why have marketers not focused on this? There are multiple reasons. First, until a few years ago, the martech platforms did not exist. While email lists have been around for the better part of two decades, without the ability to collect, analyse and segment customer data to scale, there were only two choices marketers had: one-to-one transactional messages or mass broadcast to all. It was the marketing automations platforms that helped marketers orchestrate journeys for better targeting. Second, among the push channels, even as email showed the best RoI, it was still a one-way channel with the only option being a clickthrough to a website. Compared to the richness of social media, email came across as almost ancient and clumsy in its interface. Third, the increasing ease of spending on customer acquisition (pay for performance) combined with the land grab mindset of top management made acquiring new customers as the priority. Adtech was easy; martech and CRM was hard. Easy always wins. Martech budgets were only 10-20% of overall marketing spends, and that is not enough to build multi-talented teams to deliver results. Finally, in most brands, the tenure of CMOs is typically 2-3 years. So, by the time a fledgling martech program starts to deliver results, there is a new leader who starts the journey from scratch.

Email 2.0 addresses all these problems. As part of sophisticated, AI-driven Martech 2.0 platforms, it allows omnichannel personalisation. Second, it makes email fun and interactive – bringing in immense possibilities and excitement. Creativity can now combine with tech to create memorable customer experiences. Third, CEOs are now starting to realise the dark side of adtech – the deep impact on profits. The realisation is starting to dawn that incessant and relentless acquisition cannot build an enduring business. Finally, Email 2.0 can deliver results in days and weeks, not months or years. CMOs can now hope for the corner room if they deliver – they can be the rainmakers, the stars at the head of the table.

Email 2.0 is the key that opens the door to lasting and win-win brand-customer relationships and profits in a way that none of the other push channels can. SMS has the telco tax, push notifications lack the richness and interactivity, and WhatsApp’s price tag makes it prohibitively expensive if used regularly and at scale. Email is the best answer among the push messaging channels, and Email 2.0 addresses all the weaknesses of Email 1.0 to create a genuine transformation. In fact, Email 2.0 will make other cross-channel efforts much more successful because marketers will have the attention of their customers and much more first- and zero-party data for personalisation and segmentation. Email 2.0 can thus make every other customer interaction more meaningful.

Email 2.0 needs a new word – the one I like is Microns. Just as Internal combustion engines and electric motors can both power cars but they are a world apart, Email 2.0 is not only an upgrade but also different and significantly better.

Getting Started

Here is a 30-60-90 day plan for brands to get started reaping the benefits from Email 2.0 (and also better versions of their martech and adtech programs, Martech 2.0 and Adtech 2.0).

First month: Start with Email 2.0 and 10% of the email list. The email IDs should be randomly chosen from the entire database. Ideally, the inactives should be excluded because they need a different program. The 10% list should be split 80:20 into the Test list and the Control list. The broadcast campaigns (“Cams”) being sent by brands are sent to both lists. The Control list gets them as is. The Test list has them enriched with Atomic Rewards and an interactive AMP footer to capture zero-party data. Cams will account for about 10 emails in a month. Ems should constitute the other 20 emails, to ensure that there is a daily email going out from the brand to the customer. Each of these emails should go out at the same time daily. Ems can have a mix of games, stories and informative content. The aim is to engage and make email interaction a habit. The Hooked Score should be measured for both the Test and Control lists. Over the month, the Hooked Score should show a marked improvement for the Test list.

Second month: The next phase can work on three tracks to bring in Martech 2.0 into the mix. The Email 2.0 program can be expanded from 10% of the list to about 35-40%, with Hooked Score being tracked closely. Cams and Ems can be augmented by Rems (Response Emails) – triggered emails based on the actions done by the customer on the app or website. These should be as short and informative as possible. The second track is about enhancing the experience for the Best customers. For this, CLV must be used to identify the Best. Velvet Rope Marketing (VRM) must be used to treat these customers like royalty. Martech 2.0 with its unified customer view and AI-based predictions is what is needed. Brands will need to work across departments to substantially enhance the experience of their Best Customers. The third track is for the Test customers – they need reactivation. Email 2.0 can help with the Reactivation program.

Third month: The third phase also works on three tracks and brings in Adtech 2.0 into the mix. The first track is an expansion of Atomic Rewards to the entire email database and other push messaging channels to ensure an omnichannel hotline. The second track is about creating a referral program only for Best customers. Referrals are (near) zero cost new customer acquisition, and focusing on the Best can get more high value customers. The third track is about using the Best Customer Genome (BCG) to optimise new acquisition. This can substantially decrease adwaste.

Here is a summary of the 90-day plan to do a complete makeover of the existing marketing program.

Track	Month 1	Month 2	Month 3
Email 2.0	10% of Email list Email 2.0 Daily (Cams, Rems and Ems) Measure Hooked Score	Expand Email 2.0 to 35-40% of list Reactivation of Test Customers (via Progency)	Expand Email 2.0 to the entire list Expand Atomic Rewards to other push channels
Martech 2.0	Calculate CLV for all customers to segment into Best, Rest and Test Decode BCG	Separate SBU for Best; deploy VRM Focus on Next Best Action for Rest 🡪 Best	Expand Atomic Rewards to website and app, and physical interaction points (as applicable)
Adtech 2.0	Calculate Adwaste by identifying reacquisition and wrong acquisition spends	Use Adtech-Martech Bridge with Zero-Party Data and BCG to identify attributes and affiliations	Referrals Program for Best Use BCG to optimise new acquisition

Metrics like NPS, Hooked Score, Earned Growth Rate, Reacquisition Ratio and Net Predicted Revenue can help measure progress and improvement at every stage.

Profits

Let us take the examples of two companies – one which is already profitable (Company A) and another which is not (Company B). The likely difference between the two will be on their marketing spends. The idea discussed in this series will achieve twin objectives: grow revenues by 20% and reduce marketing spends by 30%. What is the impact this will have on the profitability of the companies?

	Company A		Company B
	Before	After	Before	After
Revenues	100	120	100	120
Gross Margin (40%)	40	48	40	48
Non-Marketing Costs	20	20	20	20
Marketing Costs	10	7	30	21
Total Costs	30	27	50	41
Profit (GM – Costs)	10	21	-10	7

Revenues increase because brands are engaging better with their existing customers. If open rates in emails go up from 10% to something substantially higher, there will be a knock-on effect on web/app traffic and transactions. If the experience of Best customers improves with the availability of more customer data, they will spend more. If the customer journey of Rest customers becomes better, their spends will also be higher. If more Test customers (inactives) start engaging, there will be revenues coming in from them also. As Atomic Rewards work their magic, the discounts needed to drive transactions will decrease. Taken together, marketers now have many more levers to grow revenue. Thus, a 20% increase in revenue is a reasonable estimate. In reality, it can be much higher.

Marketing costs decrease because adwaste is being cut. The spends on reacquisition and wrong acquisition will be substantially reduced. Marketers will not have to pay the CAC rent to the adtech platforms. Success with referral marketing via Best customers will beget more Best customers, further cutting the ad spends. In this context, a 30% reduction is a fair estimate, even after assuming that martech budgets will rise – which is a good thing because it is money being spent on creating better relationships with existing customers.

The outcome: Company A has doubled profits, while Company B has swung from deep losses to a respectable profit. This is the power of Email 2.0 (along with Martech 2.0 and Adtech 2.0).

The takeaway: CEOs have to look hard at marketing costs if they are to get on a path to profitability. Just dumping money on new customer acquisition is not going to cut it. Growth has to come from existing customers. Smart CEOs are realising this. A recent headline in Wall Street Journal: “JCPenney’s CEO Is Done Chasing New Customers. ‘We Are Loving Those Who Love Us.’” And a quote from Gaurav Munjal, Unacdemy CEO, as quoted in Morning Context: “I can say we will do 200% growth, but then I’d have to burn a lot of cash. I don’t want to burn that much. When we were setting our goals for this year, the top was the path to profitability … We want to consolidate and make a more sustainable business. And then the market is becoming tricky too. And it is not just edtech. Tech stocks across the world are facing the heat. Until two-three years ago, the markets were rewarding growth over profitability. Today, there is a renewed focus on profitability.”

Email 2.0 and its allies Martech 2.0 and Adtech 2.0 are the keys that open the doors to the kingdom of profitability.

Summary

Here is an executive summary of the Email 2.0 pitch.

The Problem

90% of marketing budgets are being used up for new customer acquisition, leaving only 10% for existing customers
Marketers are increasingly worried about rising CAC and limited customer data
AdWaste is the unstated problem – reacquisition and wrong acquisition. Half of the marketing budgets are being wasted.
The rising CAC is forcing marketers down a doom loop of ad spending
The adtech spends are being further impacted by changes in privacy rules and the limits being put on the use of cookies
Marketers need a way out because their department has become a cost centre and loss leader
Every CEO needs to be concerned about AdWaste because it has a direct bearing on profitability

The Real Problem

To solve the problem there needs to be a better understanding of the problem
The real issue is Attention Recession – the lack of a hotline to existing customers
Customers are ignoring push messages, and thus brands lack an effective way to bring them back to the website or app
Attention Recession causes Retention Recession leading to Customer Churn
This forces brands down the spending path of new customer acquisition
The path to cutting AdWaste and increasing profitability therefore lies in solving the problem of Attention Recession

The Solution

What brands need and have failed to do is to build a hotline to their existing customers
Push messaging is the only way to do this; email remains the most effective push channel
But email has not evolved and is not seen as cool, leading to 90% ignore rates in messages
This is where Email 2.0 comes in, with its five innovations of Hooked Score, AMP, Ems, Atomic Rewards and Progency
Hooked Score offers a new metric to measure stickiness, streaks and engagement intensity
AMP makes emails interactive and infinitely more engaging; it also enables easier collection of zero-party data
Ems increases mental availability of the brand by making emails a utility and daily habit for customers
Atomic Rewards gamifies emails, offering micro-incentives and nudges for the behaviour marketers want
Progency is the next-gen agency that can make it all happen with a pay-for-performance model
Together, they have the ability to drive attention, engagement and habit creation
Email 2.0 creates the pipe; a hotline to existing customers
This is what ensures that the brand’s messages get through to their existing customers
This in turn drives higher revenues from the existing base and enables reduction of spending on new acquisition
A 20% increase in revenues combined with a 50% decrease in ad spends can drive a doubling profits for brands (or convert losses into profits)
Email 2.0 thus needs to become a CEO priority; it is the only path to profitable growth
Email 2.0 can make CMOs the heroes their company needs: profit creators not profit killers!

The Future

Email 2.0 is the foundation for Martech 2.0, Adtech 2.0 and better brand-customer relationships. The best martech platforms can be used to craft the perfect message, but if customers are not listening, it is all a pointless exercise. That is why the combination of interactivity, information and incentives is needed to create the hotline such that the customer responds when the brand speaks. Customer data platforms and AI-ML can add the layers needed to martech platforms to provide a unified customer view which can make the engagement that much sharper and precise.

The pipe created by Email 2.0 is what enables the next phases of modern marketing – partitioning and prospecting. The key is to focus on the Best customers, create differentiated experiences for them, and make them the channels for new customer acquisition. (See my earlier series for details: Martech 2.0 and Web3: Solving Advertising’s 50% Problem.)

As I see the future, microns will pave the way for the micronbox and the µniverse. The micronbox will declutter the customer’s existing inboxes and ensure that no brand messages are missed. The µniverse is about taking the brand-customer relationship to new heights using Web3 crypto tokens. These are also themes I have covered previously:

Tesla’s innovation in electric vehicles is creating an exciting new future – starting with personal transportation but going way beyond. Similarly, the promise of Email 2.0 is vast. Email remains the best communications channel; that is why it has survived for 50 years for one-to-one and group interactions, and almost 25 years for brand-customer engagement. Many wannabe alternatives have come and gone. Email 2.0 takes email into the future; making it cool again. For customers, it creates magical moments; for brands, it drives habits. For marketers, it makes them the profit creators not profit killers. Welcome to the world of Hooked Score, AMP, Ems, Atomic Rewards and Progency. Welcome to Email 2.0!

Postscript 1: 27 years ago, I launched India’s first Internet portals. Now, my hope is that Netcore can pioneer the Email 2.0 revolution. More importantly, I want Netcore Cloud to be the company that enables brands to become profitable. For the past 15 years, Netcore Cloud has built a foundation of profitable growth. I want to be able to take this same mindset to brands. Yes, capital is easily available and so can be used to fund growth. But it is only profitable growth that creates enduring, great companies. Email 2.0 is the technology that is the key – I would argue, the only key – that can unlock exponential forever profitable growth. For brands, and hopefully, for Netcore Cloud.

Postscript 2: Here is the Email 2.0 webinar presented jointly by Forrester and Netcore. Shar speaks initially, and then I present from minute 22 onwards. We then have Q&A from minute 44 onwards.

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