In-House or Outhouse: The Hard Questions

Many organizations grapple with whether to handle email marketing operations in-house or outsource them. For marketers, the first step toward answering this complex question requires a comprehensive internal audit. Whether you’re a newcomer to email or a channel veteran, core, fundamental areas must be evaluated to determine if your in-house operations are up to tackling the challenging email delivery environment.

Today, predominant in-house approaches include implementing an email software solution (from a software vendor or internally developed) or piggybacking an existing CRM system already in use. Both options require strong internal technology capabilities, as well as strategic, creative, operational, and delivery expertise and staff. Let’s dig into those areas and surface the key questions to ask internally when evaluating in-house capabilities.

Strategy

Unlike print, broadcast, outdoor, or even other online vehicles, email provides marketers with a powerful ability to build two-way dialogues with customers and prospects. This one-to-one communication opportunity requires strategies and approaches that differ from other marketing channels. In-house email marketers need experts on their payroll who are steeped in crafting email-specific strategies and benchmarks in the areas of list/database, delivery, and performance optimization. Otherwise, the medium’s benefits won’t be realized.

Questions: Do we have people on staff who can create strategic email programs that drive results, improve customer relationships, and integrate with other marketing/communications efforts? Can we access industry-specific and vertical-market-specific benchmarks? Do we have a process to set our own benchmarks?

Creative

As email is a two-way medium, design and copy techniques that drive response and action differ greatly from print, direct mail, and Web channels. E-mail is evolving, and user behavior changes frequently. What produces click-throughs and conversions today may not work tomorrow. Copy must compel recipients to act and ensure messages aren’t caught in spam filters. Technical specifications aren’t uniform across email clients and platforms. Coders must understand how HTML and other formats display in different email clients. AOL, Yahoo, and Hotmail all render messages differently. Incorrectly coded email looks like garbled nonsense and can negatively affect a brand.

Questions: Do we have email-specific design and copy capabilities? Do we have strong knowledge of the complexities involved with coding email or how creative renders across ISPs and Web-based email providers?

Operations

From list management and set-up to delivery and reporting, many steps are required before an email campaign gets out the door. Permission techniques must be established. Lists must be deduped and cleansed, and suppression implemented on an ongoing basis. Segments and test cells are built and tracked. Quality assurance and message testing steps are taken. Delivery must be monitored, sometimes coordinated with other marketing efforts. Finally, reporting and analysis require a degree of expertise in mining results to calculate return on investment (ROI) and optimize for subsequent campaigns.

Question: Do we have project managers and analysts with experience in the email channel who can set up, execute, and analyze our email initiatives, from start to finish?

Distributed Campaign Management: Administration

Providing controlled access to the email system is an emerging trend among email marketers. Different people in an organization — list managers, database administrators, copywriters, coders, and project managers — may need to touch an email campaign before delivery.

Question: Can our system provide controlled access for individuals to get into their functional areas?

Data

Data management is an increasingly important system function as email profiles grow richer over time. An email system must easily upload and download data files, organize data intelligently and accessibly, and export in correct formats. Data should be easily accessible and leveraged (regardless of format) to create contextual, relevant communications based on profiles and behavior.

Questions: Does our current system allow us to import, export, and analyze data easily and in a consistent format to enable us to create highly targeted and effective email communications? Does the system also easily update legacy systems with performance data?

Technology and Delivery

Delivery challenges are a critical area to examine when determining in-house capabilities. The major technology buckets include list management, segmentation, delivery, reporting, and integration/marketing automation. At the most basic level, an in-house email delivery engine must deliver the optimal format to a recipient. This requires the ability to send multipart messages, rendered as HTML in email clients that support it and text in those that don’t.

Tracking and reporting, viral marketing, reply handling, and bounce management are also necessities. An ability to automate email communications and seamlessly integrate with other systems, such as legacy database systems (billing, subscription, and customer care databases) and existing IT infrastructure, is another big consideration.

Questions: Can our email platform assemble, deliver, and track high volumes of email in proper formats? Can we tap into our other databases and automate email communications? Does our reporting tool provide the information we need? Who supports the email system, and how? What’s the process for resolving issues arising from our email communication efforts: data quality, bounce backs, delivery, replies, customer questions, and so on? How easily can the technology adapt to changing delivery requirements from ISPs and Web-based email providers? How does the current system optimize delivery? Does the system operate on a proprietary email relay server, or are we reliant on a third party sending software for upgrades? Is there support for multiple sends for soft bounces? Can these be controlled by set parameters?

ISP Relations and Delivery Monitoring

At the risk of sounding self-serving, in-house email marketing has recently come under attack as the delivery environment grows increasingly complicated. Between spam filters, blacklists, whitelists, bounce management, and privacy practices, delivery is the most complex requirement of email marketing. As more detours and roadblocks are placed in the path to the inbox, consistent, reliable delivery puts many in-house software and CRM systems under fire.

Proper email delivery now requires considerable human intervention to build relationships with ISPs, Web-based email providers, and other email gatekeepers, as well as with the RBL and blacklist organizations. Organizations need to investigate getting on the whitelists of ISPs that have them.

Questions: Do we have staff with contacts at all the major ISPs and Web-based email providers? Who will communicate with these people on an ongoing basis? If we use in-house software or a CRM solution, how do we ensure our email is actually delivered? Do we have adequate systems to monitor blocking or absorption issues for critical communications?

Determining whether to build an in-house solution or to outsource can be a complex. It’s not to be taken lightly. For many organizations, managing and executing an email program in-house can initially make operational and financial sense. Conduct a careful, comprehensive cost/benefit analysis with the above questions in mind. E-mail is an emerging medium that’s undergone radical changes and advancements over the past six years. Many email service bureaus offer monthly code releases and enhancements to allow marketers to learn and do more with email communications.

Finally, remember your competitors may already be ahead with their delivery processes. Developing an in-house solution requires a considerable investment of not only money but also time, a scarce resource in a competitive environment. A platform that’s not 100 percent focused on the medium can be a dangerous and costly decision in the long term.

Have specific questions about an in-house versus outsource decision? Send me a note. I’ll try to address it in a future column.

Until next time,

Al D.

Don’t miss ClickZ’s Weblog Business Strategies in Boston, June 9-10.

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