Thinks 363

FT: “The implications of enabling a stable and secure digital identity in virtual worlds is enormous. It promises to give people the freedom to build genuine societies in the metaverse – with social, economic, even political interaction, based on recognised norms we enjoy in everyday life. In fact, NFT-secured virtual selves may in many ways become more secure than identities in everyday life. Passwords can be stolen, biometrics hacked, passports forged. Identity secured in the blockchain is more difficult to fake and steal. One of the most important implications of enabling identity in the metaverse is allowing people to migrate freely – as the same individual – between different virtual worlds that hold vastly different characteristics, cultures and rules of the game.”

Ninan: “If India is to urbanise successfully, it has to focus on these Tier 2 cities with a population of one-five million. Some of them are getting attention in the government’s Smart Cities programme, which is fine but inadequate without structural changes like directly elected mayors, a sensible property tax system, designs for being made citizen- and bicycle-friendly, and rules for floor-area ratios to enable high-rise office towers, required to create a central business district and avoid urban sprawl…Among structural changes needed for proper urbanisation are directly elected mayors, a sensible property tax system, citizen- and bicycle-friendly designs, and clear FAR rules.”

David Perell: “A freakishly large number of the smartest people I know studied debate. I like how much they focus on how ideas are framed instead of jumping to conclusions. Instead of moving individual pieces, they create the rules of the game. This, I think, is the problem with our obsession with fact-checking. It focuses too much on what’s being said while ignoring how the conversation is framed.”

Email2: Energising Engagement (Part 7)

Making It Happen

There are 3 entities that will be needed to bring Email2 to life at scale and with sustainable success:

  • ARCo, the Atomic Rewards Company, which is the entity which manages the rewards
  • Progency, the product-led agency which offer an end-to-end performance-driven solutions
  • LoyCo, the Loyalty company, which could typically be the ESP itself

ARCo manages the pan-brand points which drives the gamification in Email2. It needs to be across brands because no single brand engagement can create enough engagement and points to make it attractive for customers. ARCo thus creates the attention token (let’s call it Mu – µ), sells it to brands for a price (let’s say 10 paise per µ), and then runs a Mu Shop for customers to redeem their earned µ. ARCo will also need to maintain the Mu Ledger – showing each customer how they earned and spent their µ.

ARCo should borrow ideas from the loyalty programs run by airlines. As The Economist wrote recently in an article explaining how the loyalty programs have become more valuable than some of the airlines themselves: “Airlines once hoped simply to foster loyalty by offering customers freebies. Passengers collected miles as they travelled and were awarded a free flight once they racked up enough of them. But schemes today are far more sophisticated. Airlines profit by selling miles to credit-card firms at a price that exceeds the cost of providing reward flights and dishing out other perks, such as hotel stays. They also gain when miles expire unused or are cashed in for something of poor value … Credit-card issuers in turn use miles to lure customers with bonuses. Airline-affiliated cards tend to rake in much more in transactions a year than other cards. Many miles are therefore earned not in the air, but through card spending on the ground.”

The key for ARCo is to ensure that the value perceived by customers in items available in the Mu Shop is significantly greater than the cost. For airlines, this can be a 100X difference: points worth Rs 10,000 for a ticket may cost the airline just Rs 100 in the form of a meal.

Progency can help marketing teams of brands drive the Email2 program as a parallel track to all their regular activities. [I have written earlier about the Progency idea.] With the Hooked Score as the metric, the progency can be paid based on its performance in increasing the Hooked Score. As I mentioned earlier, two possible starting programs for the progency can be retention for branding and reactivation.

Email2 also needs a LoyCo, a loyalty company, who can bring it all together. The ESP is the ideal entity to house the LoyCo. An ESP could offer free Mu to attract senders – exactly the way airlines offer miles to attract frequent travellers. The advantage for the ESP will be the loyalty of sending brands in an otherwise commoditised market.

While ARCo will probably need to be independent, next-gen ESPs could combine the LoyCo and Progency to offer a one-stop solution to brands to grow their email engagement. The innovations we have discussed to energise engagement in the form of Email2 (AMP, Ems and Microns) offer a disruptive opportunity for new ESPs to shake up the old order.

Thinks 362

FT on nuclear fusion: ““Fusion is probably the greatest technical challenge humanity has ever taken on,” says Arthur Turrell, whose book The Star Builders charts the decades-long effort by engineers, physicists and mathematicians to achieve what some still believe is impossible. “How close it is depends not on time, but on the will, the investment and the commitment of resources to actually get there.”…Just one glass of the fuel created by the process has the energy potential of 1m gallons of oil and could generate, depending on the fusion approach, as much as 9m kilowatt hours of electricity, enough to power a home for more than 800 years, scientists estimate. Those characteristics, its proponents say, mean fusion, by providing cheap, unlimited zero emissions electricity, could genuinely save the world.”

WSJ on mRNA vaccines: “With mRNA, vaccine makers only need about six weeks to adapt a shot and then take it from the lab to production. Messenger RNA delivers the genetic code instructing human cells how to create a protein—in this case, the coronavirus spike, which binds to the ACE2 receptor on human cells. The mRNA is enveloped in lipid nanoparticles, which are fatty blobs that protect the genetic motherload from degradation and facilitate its entry into cells. Once the mRNA is injected into the muscle, human cells become vaccine mini-factories that churn out pseudovirus particles, which in turn prompt the immune system to produce antibodies that respond when confronted with the real thing. The vaccines also induce T cells, which provide a backup defense to antibodies. If a virus mutates, scientists can easily swap new genetic code into the mRNA.”

Donald Boudreaux: “A policy of free trade is nothing more than a policy under which ordinary people are left unmolested to spend their incomes in whatever peaceful ways they choose. It’s a policy of government not penalizing or prohibiting commercial exchanges merely because the counterparties to those exchanges happen to live abroad. Free trade is a policy of not forcing fellow citizens – whether they be ‘elites’ or the most humble – to pay for special privileges granted to powerful interest groups…Free trade is a policy of simply leaving people alone. Free trade is not imposed; free trade is the absence of government impositions.”

Email2: Energising Engagement (Part 6)

Hooked Score

The Hooked Score is a good way to measure the extent of engagement. While it can apply to all actions done by a customer, we will keep the focus on email. We will keep the time period as the previous 30 days. There are two actions that can be measured with email: opens and clicks. A click is more valuable than an email. So, we can define Hooked Score as total opens + (total clicks * 3). Thus, if an email recipient does 5 opens and 1 click in the previous 30 days, the Hooked Score will be 5 + (1 * 3) = 8. For inactive customers, the Hooked Score will be 0.

Opens and clicks may not be the ideal metric to measure engagement, but they are a good start. They are easy to measure. (There can be a problem for customers using Apple devices because Apple caches emails and thus the Open may be inaccurate. For now, in India, this is a small percentage of users, so we can still use it. Over time, clicks and in-mail engagement for AMP emails will need to be the metrics to be measured.)

This gives marketers a good starting point to track and improve email engagement. 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).

While sending more marketing mails is one approach to increasing Hooked Scores, a better way is via Email2. The combination of AMP, Ems and Microns as a composite to create emails which are interactive, informative and incentivised should lead to a much bigger and lasting impact because this prioritises the upstream (attention, engagement and habits) rather than a short-term push for transactions. By competing and winning the battle for time (mental availability), brands put themselves in position to win the battle for money (repeated transactions).

Execution of the Email2 initiative can be done via the brand’s internal teams or the Progency. Making it happen will need some rebudgeting – brands will need to set aside one rupee per customer per month. This should pay for itself with higher retention, lower churn, and thus lower spends on reacquisition via Google and Facebook.

Thinks 361

Rita McGrath: “Before you can start building your strategy spine, you need to be clear on your objectives, scope and key advantages you have, for, say, a 5-6 year timeframe. What does “good” look like if this strategy were to succeed?  A great exercise that I recommend is for those who are involved with creating the strategy to write a story from the future. Write it as though an admiring reporter for a leading publication in your sector were telling the story of your success.”

Greg Ip in WSJ: “Neither supply or demand by itself is increasing prices; it’s an unusual combination of both…The unusual origins of this inflation mean the solution isn’t straightforward. Ideally it will recede painlessly as distortions to demand and supply self-correct. Rising semiconductor output will eventually cure the shortage of cars. A receding virus and less generous federal relief should coax some workers to fill job vacancies. Households may have all the furniture, exercise equipment and pizza they want. But that process could take a while; meanwhile, higher inflation could become self-perpetuating through price and wage-setting behavior. Then, the solution to this unfamiliar inflation becomes painfully familiar: higher interest rates and perhaps a recession.”

James Clear: “You only need to know the direction, not the destination. The direction is enough to make the next choice.” [via Shane Parish]

Email2: Energising Engagement (Part 5)

Bundle

To summarise: AMP enables interactive emails. Ems are informative emails. Microns are incentivised emails. When bundled into a single composite email (Email2, the next-gen email), this triad can help increase opens and clicks, and thus drive greater engagement by bringing excitement back into emails. There are other benefits of a successful Email2 program: higher retention and lower churn in the long term, and more inboxing and greater reach in the short term.

Consider today’s emails and the power of Email2 will become apparent. Most emails are long and have too many choices (which can also be confusing to some). The emails are not interactive in-place, thus necessitating a click to a web page or an app. The emails are not gamified, reducing the incentive for us to even open them. Email2 solves all of these problems. Email2 is a 10X better solution in the sense that its focus is to take email open rates from 10% to 100%. Marketers take great effort to create the emails and decide whom to send them to; it is thus a tragedy if these emails go to waste and lie unopened and unseen.

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.

Email2 thus opens up a new world because it is a new format – made for the micro-attention recipient who is viewing it on the mobile. Tiktok showed that even 6 seconds is good enough to engage with videos. Email2 is about creating those brief moments to inform, reward and enchant, and in doing so, imprint the brand for a few seconds daily in the minds of the customers. “Hooked” customers is the way to drive repeat transactions, and Email2 is the pathway to creating Hooked customers.

Thinks 360

Picking a wedge for your product: “A wedge is simply a strategy to win a large market by initially capturing (1) a tiny part of a larger market or (2) a large part of a small adjacent market. In business, as in rock cutting, a wedge is made up of two parts: (1) the right tool and (2) the right place to strike. In other words, the right initial product and the right initial market. Tesla’s wedge (into the larger transportation market) was a luxury car targeted at affluent early adopters. Robinhood’s wedge (into the consumer finance market) was a commission-free trading platform targeted at millennials. PayPal’s wedge (into the payments market) was an online payment platform for eBay sellers.”

Rajdeep Sardesai on corruption in India: “Elections, after all, lie at the heart of the democratic setup and money oils the election machine. Routine elections every year, from gram panchayat upwards, demand a constant flow of cash. If the major parties rely on funding from the big corporates, those down the line need their own poll financing from local “syndicates”. In effect, there is a “decentralisation” of corruption that co-exists with a centralisation of power: The nature of the corruption may vary, but the “deal-making” is in-built into a well-entrenched system of localised political-bureaucratic networks.”

Watched: 83 (movie about India’s victory in the 1983 Cricket World Cup).

Email2: Energising Engagement (Part 4)

Microns

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.

Here are some of my past writings:

Here is what I wrote in the last essay: “Atomic Rewards work across brands because no single brand engagement will offer enough incentives to become an independent program. These rewards are not linked with transactions. They come in the form of points (Mu) and are thus non-financial. The points aggregated across multiple brand engagements can be redeemed at the Mu Shop … Atomic Rewards help with the habit loop. The µ symbol in the Subject of an email or adjacent to a QR code is the cue. The craving is the quantum of Mu that can be earned and what the additional Mu does – maintain a streak, bring one closer to the free item in the shop or the next level rise, and so on.  The response is the action in the form of an open or click – the attention and engagement desired by the brand. The reward is the earning of Mu and a step towards a desired goal. Over time, µ becomes associated with a reward, and that is what can drive behaviour change.”

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.)

Thinks 359

WSJ: “Global advertising spending will grow 22.5% to $763.2 billion this year, excluding U.S. political ad spending, according to the latest forecast from GroupM, Digital advertising will account for 64.4% of total advertising in 2021, GroupM said, up from 60.5% of the total in 2020 and 52.1% in 2019. Somewhere between 80% and 90% of digital advertising outside of China will go to Google parent Alphabet Inc., Facebook parent Meta Platforms Inc. and Amazon.com Inc., GroupM estimated.”

Anticipating the Unintended Newsletter: “A large shift to the formal economy has happened across sectors among the consuming class. This has hit the informal economy hard. No wonder the labour participation rates at this moment are the lowest in over a decade. We had seen a similar trend in GDP right after the initial shock of demonetisation where the formal economy which gets measured easily and more frequently showed robust growth while the drag of the informal economy showed up later. This time around the pain in the informal economy could be worse. The GDP growth and record GST collections and corporate profits must be seen in this light. The overall pie might have shrunk while the formal economy part has grown.”

From Farnam Street newsletter: “Don’t face complex issues head-on; first understand simple ideas deeply. Clear the clutter and expose what is really important. Be brutally honest about what you know and don’t know. Then see what’s missing, identify the gaps, and fill them in. Let go of bias, prejudice, and preconceived notions. There are degrees to understanding (it’s not just a yes-or-no proposition) and you can always heighten yours. Rock-solid understanding is the foundation for success.”

Email2: Energising Engagement (Part 3)

AMP and Ems

I have written separately about each of these 3 innovations that comprise Email2.

AMP

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. From a previous essay: “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.” AMP only works on Gmail and Yahoo Mail, and that too in their native apps or the browser. A Gmail account viewed on an Apple device through its native mail app will not support AMP. In India, Android and Gmail dominate – which means AMP emails should get wide acceptability. 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

Ems are informative emails. They are short (mobile screen length) and thus can be read in 15-30 seconds. They are part of a series and tell a story. 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”.

My previous writings on Ems:

(The idea I now call Ems was called Microns in my early writings. Microns now is a term I use for emails with rewards.)