“…trust me…”

We’ve talked a lot about direct marketing, specifically the benefits of RSS and permission based networks. One development we’ve been following in the US is the growing popularity of two companies, Return Path and Goodmail.

Essentially, what these companies are proposing is a “sort of FedEx for e-mail…for a penny or less per message, the sender gets guaranteed delivery for mail and the promise that it will stand out in the user’s mailbox” writes Esther Dyson in an op-ed piece she wrote in today’s NY Times about Goodmail. Esther continues,

Goodmail, in my eyes, does not raise moral issues. It simply wants to make the Internet a better place — and yes, make a little money along the way

We understand that Goodmail’s solution is meant to help filter out the bad e-mails from the good e-mails by labeling e-mail with a “certified e-mail” icon and thus making the Internet a safer place but we don’t believe this model is going to work as it is intended or promises. Truth be told, the only way to absolutely filter out bad e-mail is to build a closed network where individuals need to be individually certified by the person they are looking to contact (Linkedin.com, anyone?)

So, if Goodmail isn’t the solultion, what is? Could the answer be a permission based marketing (i.e. “I give Yahoo! permission to only e-mail me marketing info about green spotted frogs”) model? We don’t think so as permission based marketing (“PBM”) is about filtering out unwanted/random e-mail spam; the promise of permission based e-mails is to provide marketers exceptional measurable results while rewarding customers for playing.

You might be thinking, “so what the heck is your point, get on with it already” or “all this yelping about PBM and yet you fail to realize you’re comparing apples [Googmail] to pears [PBM]…”

Here’s our point: We believe Goodmail (and Return Path) further pollute the direct marketing environment by incentivizing corporates to turn up the volume on unwanted spam under the guise of safe, certified e-mail (“truuust me, dear customer, you’ll love this spam mail…”).

We truly believe this is the worst possible path for direct marketing to take as it approaches the problem of “spam” not from the end-users pain point (“dude, stop the spam”), but rather from the corporate/aggregator/ISP’s (e.g. AOL, Yahoo!, etc) monetization pain point (“man, I wish I could earn US$0.01 for ever time some joker used my network to send spam, a network of users that is costing me some bucks to maintain and support”).

We look at the issue of paid e-mail from the inside out, in other words, we’re advocates on not only rewarding the corporates (i.e. measurable results), but also rewarding those consumers who want to be contacted by advertisers (all the while leaving those consumers uninterested in “spam” alone).

In trading, when a guy has a strong opinion of the market’s direction we say “he’s talking his position” which mean he’s positioned to make money if the market plays out that way. And in this sense, with regards to permission based marketing and loyalty rewards, we are talking our position, however when you’re right, you’re right. Yeah?

Chris Early, Studio Manager for Microsoft Casual Games Group talks with gaming blog Joystix about challenges facing casual gaming and how MS is working to bridge the gap between console players and PC players.

One of the big challenges that–not just Microsoft–people have been working on for years in the online community space is “how do you allow consumers to differentiate themselves? “Because you and I, when we both log in, we are essentially the same, right? In that digital world we’re just a collection of bits.

How do we begin to establish different identities and differentiating ourselves becomes a key element to the community? One of the ways is by allowing people to pick their own avatar and self express in some forms. But another way is to allow people to earn and achieve those differentiators and have that be part of something you can be proud of and show of:

“In fact I am different because even though we may have picked the same avatar and remarkably similar name, I am clearly a much better Geometry Wars player or pick the game player because my score’s higher or I’ve earned more badges or because whichever method you want to go to.” Differentiation ends up being key.

FeedBurner has a new Feed For Thought article titled, “How feeds will change the way content is distributed, valued and consumed” that I think is really worth reading…

Here is a bit of the article:

Today, feeds are largely considered the output of content management systems. You create an article, an Atom/RSS version of that article gets generated, and that’s it. Visitors to the site see an html view of the content, and subscribers to the feed get some rendering of the same content (derived from the feed) in their aggregator.

Since the feed data is semi-structured, it is possible to enhance the feed with 3rd party services in a generalized way. Meta-data can be readily incorporated and other content can be spliced into the feed based on easily parsed feed elements…like meta-data additions (Media RSS, iTunes tags) and content splicing (links and photos) for some time now….

We can leverage the benefits of feed structure to allow publishers to provide a feedback loop to the Web site; the feed can become input to content on the site. There are unique capabilities that can be provided to the site as a function of performing transformations and enhancements to the feed derived from that web content.

I am totally convinced that there is a killer direct marketing/targeted email model that specifically leverages feeds…this includes developing a direct marketing feed aggregator…

The team at Shanghai based 1Diantong also think so, and thus they are working to integrate feeds into their distribution channels…it is going to be fun to watch how this plays out…

I had a chat with Bryan Ellis from Bertelsmann’s Book Club in Shanghai. Bryan is somewhat of an expert in direct marketing and loyalty programs; he was kind enough to pass along some interesting insights and lessons he has learned over his 8+ years at Bertelsmann, such as his acid test for weeding out the “players” from the “non-players” in the loyalty universe.

Bryan’s acid test is made up of three parts:

a. Who are the partners in the coalition?
b. How can a new member leverage this network?
c. What is the spread (buy v. sell)?

He noted that in China, most companies get some derivative of part “a” and part “b”, but no one has every been able to nail the economics of the business…or what he calls the spread…

Last week, Eric Tilenius and Steve Markowitz were in Shanghai visiting, etc. I had the chance to sit down with with these two loyalty and direct marketing thought leaders and chat about what makes a good loyalty program worth investing in.

Their core message was that any loyalty program worth its salt will work to achieve the following four goals/benefits:

1. Acquisition
2. Activation
3. Stimulation
4. Retention

Makes a lot of sense…funny thing is that 99% of these programs are okay at the “acquisition” part but fall dramatically short of the latter bits; most likely this has to do with an underdeveloped network/partnership and flat direct marketing campaigns…

I’m talking from experience: In 2000, I was a Director at Hong Kong based online brokerage, Boom.com and one of the most time consuming yet ineffective services we offered was a loyalty program called “Boom Points”. The idea was to give Boom Points to our customers each time they placed a trade; the amount of points were based on the size (value in HK$/US$) of each trade.

Some of the places we went wrong was in the following ways:

1. Trade sizes were not large enough for customers to earn nearly enough points to make it worth their while; they would have had to make institutional size trades

2. Because each Boom Point represented a $ amount, customers could calculate each points exact worth; in other words, what incentive did you have to trade more if you knew you could purchase the same radio Boom offered at Fortress for 30% less?

3. We didn’t offered any perishable goods, such as airline tickets ( high perceived value, yet low marginal cost); and thus we lost real money each time a customer redeemed points

4. Customers could only earn points at Boom; we should have build a platform or leveraged our branding to build a network effect

5. We didn’t create any impactful direct marketing campaigns to stimulate or enlarge our network

Hard lessons, for sure, but lessons nevertheless…I’m waiting for a company in China or Hong Kong to come along that can successfully address the four points Eric and Steve waxed on about…