Rajesh Jain

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:

• Micronbox: A New Inbox
• Micron-verse: Making It Happen
• Martech’s Magicians: Microns, Micronbox and µniverse
• µniverse and Bharatverse: Web3 Explorations
• Constructing the µniverse

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.

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!

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.

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.

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.