Episode 15:
Investing in Email the Right Way with Ryan Phelan and Chris Marriott

Scott Cohen: Hello, all, and welcome to That Inbox Army podcast. I’m your host, Scott Cohen. With me today, the Abbott to My Costello is my cohost, Garen Hobbs.

Garin Hobbs: Hi ho, Scott.

Scott Cohen: We are recording on the road today. We’re coming to you all from the beautiful Stein Erikson Lodge here in Park City, Utah. We’re together with friends and colleagues at MediaPost Email Insider Summit. 1 of 1 of, if not, my favorite shows of the year.

Ryan Phelan: My favorite show. Absolutely.

Scott Cohen: So today, we’re gonna talk about email platform utilization, mistakes seen in RFPs and program setups. You’ve been hearing a lot about Franken stacks and things this week. So it’s relevant.

Ryan Phelan: That term, by the way.

Scott Cohen: Very great. Fabulous term. And where folks should be investing their money for the coming year and beyond, and we’ve invited 2 of our favorite most knowledgeable people to the discussion. Joining us today, CEO and managing partner of RPE Origin, Ryan Phelan Hello. And CEO and founder of Email Connect, Chris Marriott.

Guys, welcome to the podcast.

Chris Marriott: Thank you. I may be here.

Garin Hobbs: Alright. Before Thanks for coming

Ryan Phelan: to my room

Chris Marriott: and just updating it.

Garin Hobbs: This is We’re hoping so.

Scott Cohen: Ryan had the best room in the of all of us, so we raided his room, and that’s Yes. Probably weird and not weird at the same time. Anyway, guys, before we get into the weeds, I always love hearing about the journeys that our folks have been on. We ask this of everybody that comes on the show. So, Chris, we’ll start with you.

Okay. How did you get to where you are today?

Ryan Phelan: That’s a long story. I but before I even get into that, I’d like to say, I believe the first use of the phrase Frankenstack was by made by me. Oh, here we

Chris Marriott: go again.

Ryan Phelan: 3 years ago, when I when I put a post on LinkedIn, commenting on the the Lumenreach acquisition of Exponia, and I referred to it as a Frankenstack, at which I apologize for a year later when actually it became clear to me that it was a pretty good move. But, I think that that was, again, I can claim to have first used that. So how did I get here where I’m inventing phrases like Frankenstein? I was I started my career a 1000 years ago in advertising, and, when the Internet real advertising, like, t TV commercials, although they made their, which is now part of WPP, whatnot. But, when the Internet, or the web became a thing in the nineties, I transitioned over to some of the one of the early web shops, a company called Think New Ideas, which was part of, John Wren, who’s the guy who just did that big deal with with, Intercom I mean, Interpublic and Omnicom.

He’s still running the company. He seemed ancient then. Sorry, John.

Chris Marriott: You’re not watching this. Maybe he is.

Ryan Phelan: But he but he’s still anyway, so so I got into the Internet and, eventually found my way to a company called, Digital Impact because they were looking for somebody to run agency services for them. This was in 2004. They wanted somebody to come into New York and run their office there who had an agency type background, client service, that kind of stuff. I I knew nothing about email, but I knew how to manage an agency type organization, which those early ESPs were of because nobody knew how to create email. So if they didn’t create email, if they didn’t bring to the table everything a brand needed for email, they weren’t gonna get, you know, off the ground shelf work.

Right. Exactly. So, I got into there, and and when I worked at then Acxiom bought them, worked at Acxiom, ran their global agency services for several years. And then when I left there, and I’ll I’ll I’ll wind this up, I thought back to my days in advertising, but it become popular. Hey.

This is a good story. It it in the late eighties and early nineties, it became a a new type of company consultancy emerged in the advertising world, which were called search consultants, which were made up of ex ad agency guys who knew all the secrets, who knew all the pricing, all the margins, and they offered their services to advertisers, brands, when they wanted to have a new agency, select a new advertising agency. And I thought myself self, this is around 2012, I bet there is a need. Platforms are beginning ever more complex. New ones were coming out of the market every day, and I thought that there might be a need for brands in their RFP search for new ASPs to bring in outside consultants to help.

And fortunately, I was right. And here I am today. I mean, I first did it with David Daniels at the Relevancy Group, and then I launched, we split that partnership in 2015, and I launched email connect. And here I am today.

Chris Marriott: I would give this story probably 3 and a half wreaths.

Speaker 5: I’ll take

Ryan Phelan: it. Out of 4? I’ll take it out

Speaker 5: of 4.

Ryan Phelan: Out of out of out of 4,

Chris Marriott: maybe. Okay. Alright. I’ll give you a a a shorter one because you have a bridge version. The bridge version.

Ryan Phelan: Mine is fast. Not long with you, so my story’s gotta be long. There we go. When I was

Chris Marriott: on the farm in rural Iowa. Dream. No. Let’s see. 1998, I was running nightclubs, and I was a DJ and decided that that was not a great career for making money.

And so I applied to a job, an Internet company back in 98. Back, it was goodpoint.com. They hired me to run their affiliate program and their email program. I took their email program and ran with it. I cofounded Affiliate Summit back in the day with Sean Collins and Missy Ward.

Ryan Phelan: I did not know that.

Chris Marriott: Yep. And then, my career has been 26 years in this industry working mostly for ESPs. I did a stint at Sears and Kmart for about a year and a half. But 10 years ago, John Caldwell, who was the founder of Red Pill Email, he and I used to go sailing on the weekends. And every time we went, he begged me to come work with him at Red Pill Email and and be his successor and take it on, and and I liked a regular paycheck.

And, I kept I kept saying no. No. No. And I worked for my last job was at Destra. When I left that company in a moment of weakness, he called me up and said, hey.

You need to come work for me, and and I said yes. And so I’ve been at, Red Pill, and we changed our name a few years ago to RPE Origin. I’ve been there since 2018, as a CEO and just having a great time with a wonderful group of people. Nice.

Garin Hobbs: But you’ve resisted the sandals throughout that entire time. No. John, he’s still for his flip flops.

Chris Marriott: He is, but he lives in California, so he can wear them all the time. Absolutely.

Ryan Phelan: Right? Should be wearing cowboy boots because he lives in Texas.

Chris Marriott: No. I will not wear I have a pair of cowboy boots, but I still have my Birkenstocks and wear sandals.

Scott Cohen: There you go. Yeah. Let’s jump right in then. Alright. So we’ve all seen the statistics.

Average utilization of an email service provider is what? 25%, 30% of the total capability, something like that. Ryan, we’ll start with you. Why does this continue to be the case?

Chris Marriott: So that stat came from my days at responses, and we went out to prove how much of the platform they were using. And it came back that they were only using 20% of all the functionality. And what over the years has persisted is that statistic is the same. I think it’s a function of people are still just doing what they have to do to get campaign work out the door. We’re critically funded, underfunded.

We have short staff, short of time. There’s not enough time to try something new, to invest in something new, and so I think people just do what’s easy. Now I think that that number may change here in the immediate future. I think that during the email wars, back early 20 tens between responses and exact target, you had all this functionality. You had all this, great stuff that people, you know, could use to extend the reach of email, more of the early process into omnichannel, and that innovation filtered down into the rest of the industry.

When those two companies got acquired, innovation dried up. That 20% number just became the 20% number. Now with AI, you’re seeing these market leaders, Zeta, Marigold, cordial. You’re seeing them with AI components and agents. And so what I think is gonna happen is those top tier leaders are then now going to spurn another innovation wave in the ESP class.

And AI has the service of making things easier, where people can go in and create segments, do a lot of the work that used to take us 6 months to do on the data sciences side. So I think that that changes, but it’s gonna still take dedication from the marketer to say, I wanna try something new. I wanna use this. I wanna test. I wanna take a chance instead of just doing the same old thing all day.

Garin Hobbs: I actually see this as being part of a a repeating cycle. Right? So early 2000, utilization rate was somewhere between 70 80%. Makes sense. The level of functionality was fairly low, and people were analyzing most of what was there.

Right? Then you have this whole shift in the industry where point solution started spinning off, sort of specific capabilities. And there was this well, the solution should be more of a distributed solution rather than one that is entirely en suite. Utilization rate drops is more of that functionality was found outside of the central platform itself. We are now see and then, VIN that follow follow follow then that what then followed that was, again, another period of consolidation where the big biggies piece went out there, bought up a lot of the smaller ones, bought up some of the point solutions, incorporated them into their platform, and yet some people still chose to work outside of the platform with other solutions.

So that utilization rate never quite recovered. Today, we’re seeing another period of consolidation rather than one of diversification yet again. You see all these folks out there snapping things up. But I think the utilization rate is down is because there’s just so much inside every ESPN. I mean, look at them.

Half of them offer CDPs as well. You don’t need to use that if you already have a CDP or data lake, data warehouse, something like that elsewhere. People are still very fond of other point solutions, and it’s very common, at our agency to work with clients who have email on one platform, SMS in another, and maybe even push is supported by something third, and then they have something separate for loyalty, etcetera, etcetera. So I don’t know that we’ll ever get back to that period of the early 2000s where we see those utilization rates back up around 50% or so. Because it was 80, then back down to 20, no more per per rhyme.

Then just 3 years ago, it was hovering around 60% again. Now it’s back down to 25%. So you see this repeating cycle of of, diversification, consolidation, diversification, etcetera, etcetera. Maybe that’s something we’ll continue to see.

Ryan Phelan: I don’t know.

Garin Hobbs: What do you think, Chris?

Speaker 5: I don’t

Ryan Phelan: I you know, I agree with a lot of what both you and Ryan said. I think, I’m sort of sort of where to start. I think one of the innovation in in the industry you mentioned that, you know, that that these early third party companies that spun off in the ecosystem that that that did things that the platforms weren’t doing. And and we’ve seen that time and time again. What what we’ve also seen time and time again is that the ESPs, when they when they see that when the big vendors see that these these third parties are solutions are popular Yes.

They either build their own native or they buy it. And and so innovation oftentimes is is actually driven by by these 3rd parties, not by the ESPs themselves. A big reason for that, I believe, is and I’ve seen it because because for those of maybe those who don’t know what I do, I I manage RFPs, for brands. And the the vendors oftentimes miss the mark when they’re when they’re developing new features and functionality. They don’t develop for the practitioner.

They develop for the c suite. And and and that also that’s that’s the reason why, that the third parties exist because they listen to the practitioner and give them what they want. But but it’s also why things don’t get used. I mean, as an example, I I use this example of the perfect example of pitching to the c suite and not and not carrying what the practitioner thinks. Retargeting email openers with display ads.

Vendors, a few years ago, that was a huge thing, and and vendors were all so excited. We could do that. We could do that. We and and they didn’t stop to think. And and I never knew a brand that did that.

It never won an RFP, and, or even stood out in RFP even though we all talked about it. And it’s because the the email marketing team isn’t going to redirect parts budget to display advertising. That’s not their job. They’re not in acquisition. So, it it again, it was something that that that never was used.

It’s in there, but it was it went completely unused by the brands. The last thing I’ll say is what I think is also driving towards consolidation today as you were as you were saying, you know, back to is even as, you know, if you go back to 2010 or 11 or 12 when I started matching RFPs, I talked to the SMS. They were separate from the email team, which was separate from this. Today, and and you even see it here in the conference, the people are responsible for the the owned media channels. Exactly.

So they’re they’re responsible for SMS. They’re responsible. Right? Of course, they’re responsible for email. And they want that all in one platform.

You know, they’re the when when they were separate departments, they all have their own platform. But now that they’re all one person, that person’s saying, why wouldn’t I get one platform that does all of these things? Why should I try to integrate these platforms and and, you know, link these up and so I can get this complete view? So I think that the fact that all of these roles have sort of coalesced into a single role at the brand side is also driving the consolidation. And and and I I mean, the platforms have these capabilities.

Now people are saying, I wanna use I wanna I wanna use my platform to push. Right? I need to. Yeah.

Garin Hobbs: That single few orchestration Exactly. And that’s fidelity between these channels.

Chris Marriott: Isn’t it also that the platforms have gotten smarter about those consolidated plays? Because if you look early days, Adobe. Right? The the famous tagline in the early days with their all in one thing is the only thing that was, organized and combined was the billing system. And, you know yeah.

I love Adobe, but,

Garin Hobbs: you know,

Chris Marriott: so you you look at some of these platforms, Marigold, Zeta, that have done these consolidation plays, they’ve gotten smarter with their transfer of data, with their accessibility to, a broader dataset and and really worked on UX. Whereas in the old days, it was, I’m gonna consolidate this partner and plug it in. I’m gonna consolidate this, plug it in. And it was really clunky and sloppy.

Ryan Phelan: Yeah.

Chris Marriott: And so I look at the marketplace and just say, it’s easier as a combined platform because the companies have really thought about what that combined product looks like Yeah. And done it the smart way.

Ryan Phelan: And I’ll add sorry. Jump in on No, please. Another thing I I meant to say was, we heard even we even heard this today when when a couple of speakers were talking about, you know, I don’t wanna go to my IT team. Mhmm. And I’ve seen that brands it it it’s a huge thing in our piece in the last 3 or 4 years.

A huge component of, can you do this? Right.

Garin Hobbs: Can your platform do this,

Ryan Phelan: and can I manage it without IT or vendor intervention of self empowerment? Exactly. So the in the old days, people wouldn’t do x, y, and z in a platform with feature function because they have the other IT department. And nobody wants to go to their IT department.

Chris Marriott: No. Because they don’t have value.

Garin Hobbs: Right. You’re competing with other departments for their time.

Ryan Phelan: And they dismiss you out

Chris Marriott: of hand.

Scott Cohen: And they don’t and they don’t trust you with the data either.

Garin Hobbs: A 100%. Right. It’s always locked away. Exactly.

Ryan Phelan: So now that the platforms have gotten easier to use with by the marketing team, they’re able to try the features and functionality without having to knock on anybody else’s suit. Yeah. Yeah. And I think

Garin Hobbs: the data query is the biggest part of that. Right? I mean, how many of us live spent so many years living in SQL query now?

Speaker 5: Right. The

Garin Hobbs: problem with SQL is you had to know exactly what it was we were looking for. Right. And it simply confirmed exactly what you were looking for. With now this sort of open data structure where everything is unstructured data, you can see those act sites those insights more proactively without ever asking what may end up being a biased question.

Speaker 5: Yeah.

Garin Hobbs: And that’s not something that you would have ever got from the IT department. Right?

Chris Marriott: But you still have the problem with bias at AI. You’re not writing a query, but you’re writing a prompt. You’re creating an agent. And so AI is only smart as the person that programmed the insights and the and the weightings in the in in the model. So you still have that balance.

That goes that could be another podcast about how is AI making us dumber as marketers.

Scott Cohen: Short answer, yes.

Chris Marriott: Yes. Yeah. Yes, sir. Okay.

Scott Cohen: Well, I mean, let’s we talk about the decision. You know, how can we avoid IT? How can we, you know, how can we make the decisions easier and empower? You know, all of us have been through ESP changes either on the vendor side

Speaker 5: Mhmm.

Scott Cohen: Or on the brand side where you’re going,

Speaker 5: oh, shit.

Scott Cohen: I have to do all of this work now. Or even

Garin Hobbs: the agency side. Or the agency side. Yeah.

Speaker 5: You know?

Scott Cohen: Parties. Right. Exactly. So, you know, guarantee you’ve heard me say this a 1000000 times, but don’t make a switch unless it’s absolutely necessary even if it’s a good decision.

Garin Hobbs: 100%.

Scott Cohen: So, Chris, what is that go, no go decision point? You know, what are you know, what goes into a, yeah, you need to choose somebody new right now?

Ryan Phelan: Right. You know, it’s like when you it’s like breaking up with somebody. It it it you reach a point of no return, and and there are many ways you can get there. But my clients in in, you know, 50 RFPs over the past, you know, 8 or 9 years, only one stayed with their existing vendor. Because by the time because to your point, nobody wants to move.

But once they’ve decided they’re going to move, that train has has left the station. And and unless it’s a procurement driven, you gotta do one every 3 years. But we love our vendor. You gotta do it every 3 years. It the the but we but from day 1, we that’s why one of the reasons why we created a scorecard driven, methodology for RFPs is so that you could see in black and white how your old RFP compared to the new ones you were looking at.

And and so that you could see, you know, that there was enough of a difference to make the pain of the migration worth it. So, you know, those scorecards are you know, help brands, you know, go you know, stick with their decision to move because they get black and white says, listen, you you started with 8 in the 1st round, they they scored in 8th place out of the vendors. I mean, of course, you have to move. And, you know, people have heard me say I mean, there’s there’s a changing of the guard going on right now. And you’re seeing a lot of old tech get replaced by new tech.

That’s not a hard decision. No. It’s not like you have these next gen going against each other yet in a lot of these RFPs that I’ve seen, which I think is a tougher decision because is it a step change improvement going from one one to another? You know, you could you could make arguments both ways. But going to any one of those next gen platforms with the NoSQL databases from a legacy platform is a no brainer, should be a no brainer.

And I and I’m frankly stunned by the degree that legacy platforms still are able to maintain the client base that they have, and that it isn’t shrinking faster than it is. I think a lot

Garin Hobbs: of times that’s a question of what is the input versus what do I enjoy on the output. Right? So anecdotally, yours has happened to be 3 years ago. I was working for 1 of the new generation ESPs. Yep.

Went through this exhaustive RFP process, with, a very known well known, athletic shoe retailer. And at the end of it, they said, you know what? You’re right. This is exactly the direction we need to go. The future of our business depends on it, but not now.

Not today. It’s gonna require that we break and flatten our entire data structure. We just don’t have the time and resources. Even though we know by not doing so, we’ll be leaving a significant amount of opportunity and money on the table. Wow.

Chris Marriott: I love that. That’s alright.

Ryan Phelan: Yeah. He’d rather piece it in that way.

Chris Marriott: Yeah. What’s happening, though?

Ryan Phelan: I would sit that out well in advance. Not Yeah. Yeah. Put the vendors through that. I mean, because

Garin Hobbs: it was a tough thing. They were awful. Wading down this path with another, ESP, in terms of making their final decision. In fact, they were in their final decision stage. I happened to meet this person at an event in Florida.

We were literally having a conversation at the bar. He pulled out his phone, called his entire marketing department, said, pause. We’re now gonna take a look at this other ESP. So it wasn’t necessarily something they had anticipated. It’s nothing that we have the ability to have foresight into.

Speaker 5: It’s just

Garin Hobbs: one of those things that happened. It was sort of a Cinderella moment that ended with the coach turning into a pop together.

Chris Marriott: But that’s a failure of that leader fully knowing what a migration and a change looks like.

Ryan Phelan: Yeah. I agree.

Chris Marriott: That is that is an ignorant statement because

Scott Cohen: a lack of needs assessment. Right?

Garin Hobbs: Yes. Yes. It’s also a lack, I think, of knowledge of what is available out on the market. Right? Yeah.

They didn’t realize that, hey. These open data structures now exist. I can open up all of these actionable insights across our family of 9 different brands. It’s just it’s more of that. We’re doing it this way because it’s the way we’ve always done it.

This is the way that we’re structured, and this is where we’re gonna continue for at least

Speaker 5: the 3rd of

Ryan Phelan: the future.

Chris Marriott: Well, and that’s one of the biggest mistakes that companies make when they do a migration is they migrate from platform a to platform b, and platform b at the end of the day looks just like platform a.

Ryan Phelan: Yep. Yeah.

Chris Marriott: And and it’s it’s this learning opportunity between that to say, okay. You’re gonna do things completely different. Your data is gonna be structured different. Your creative is gonna be built in different. Your automations are gonna be different.

Your reports are gonna be different. Get used to that and adapt because you have to. If you replicate the same stuff you have on this side to this, you’re not gonna be happy with this for very long.

Speaker 5: Right.

Ryan Phelan: Well,

Scott Cohen: then why are you making the switch if you’re just replicating the problem with the

Garin Hobbs: first one?

Ryan Phelan: Change of view.

Scott Cohen: Yeah. And It

Chris Marriott: it’s window dressing. It’s it’s a new interface, but it’s the same data. And and

Garin Hobbs: And you’re using it the same way?

Ryan Phelan: Yes. Right. Yeah. I I think one of the interesting things is that, in this in this sort of change in the garden is is you can’t do that. You can’t lift and shift when you’re going from relational database to a SQL database.

And but what I’ve seen and one of the reasons why did we why I was so eager to be in this partnership is, you know, it’s very easy to pick pick a new ESP and and then discover because the e the even the vendors don’t hammer home the difference that a NoSQL database means Right. And what that might and what the migration is going to be and how much more complex it’s going to be because you have to now think of, alright. What’s your data schema gonna be? Because Yes. They’re not schema lists.

There’s a but they they start schema lists,

Garin Hobbs: but there’s a schema

Scott Cohen: It’s all when you’re done.

Ryan Phelan: Yeah. Right?

Garin Hobbs: It’s all the risk.

Ryan Phelan: And and structures. You know, my my clients after the RFP was done and they picked somebody, you know, it got to the point where they look at me and they were like, help.

Chris Marriott: Yeah. Yeah. Yeah. It’s like,

Ryan Phelan: now we’ve gotta do this tons of work, and we wanna get it right, to Ryan’s point. We don’t wanna end. And it’s not like the old days where we’re bouncing from relational database to relational database, and and we could kind of lift and shift and and take the easy way out if we wanted to. Yeah.

Chris Marriott: But now it’s about lift and innovate.

Ryan Phelan: Lift and innovate.

Garin Hobbs: It should be. Yeah.

Ryan Phelan: And that’s gonna take longer. I you know, brands need to I I don’t wanna get off too much on a tangent, but brands need to understand how long the RFP is gonna take.

Speaker 5: Mhmm.

Ryan Phelan: But even more importantly, how long the migration’s gonna take. Right.

Chris Marriott: Yes.

Ryan Phelan: Because the migration is is going you know, I used to say to brands, how long is your IP gonna take? Tell, you know, tell me what you think it is, then then we’re gonna double that. Yeah. And for migration, I think it’s tell me tell me what you think it’s gonna be, and we’re gonna quadruple that. I know you’ll find Well, the

Garin Hobbs: the mistake is that they think

Scott Cohen: it’s plug and play.

Ryan Phelan: Right.

Scott Cohen: Yes. Right? And there’s it breaks your website. It breaks all your all your triggers have to be rebuilt. Yes.

Mhmm. Everything has to be rebuilt. The emails have to be rebuilt.

Garin Hobbs: Yeah. The rest of your entire stack.

Scott Cohen: The nuance of all the code has to be rebuilt for even even if you’re like, we love our designs. We still have to lift and pick that up and move it over to all that other piece. So Yeah. Even in the the best case scenario, 3 months?

Ryan Phelan: Best

Scott Cohen: case. And that’s if you have all your shit together.

Ryan Phelan: Yeah. And you’re tiny.

Garin Hobbs: Yes. And have sufficient resources and available cycles to actually complete right work.

Scott Cohen: Correct.

Ryan Phelan: Again, correct. Yeah.

Scott Cohen: I mean, let’s let’s talk about common mistakes. Right? We talk we talk touched on it already, but I feel like we’re just in that mode. I mean, that’s that’s a big mistake. Making a decision based on budget, is that a huge mistake?

Yeah. I think it is.

Ryan Phelan: Yeah.

Garin Hobbs: Yeah. You’re limiting your opportunity based upon what you feel you have in your pocket to spend versus what the needs and desired business outcomes actually demand. Right? And I think that’s I had kinda have 5 points. Scott, you know, at our agency, we get this question 3 to 5 times a day.

Yeah. So I tend to tell people, you know, you need to tick off all 5 points, not just one. One, you move because your the needs of your business have outgrown the capability of your current platform. 2, you don’t have the necessary insights, data or the ability to enact or to act upon those insights with your current platform. 3, your current platform does not allow you to extract the maximum value and utility from your own internal resources, your own internal marketing team.

Right? 4, it doesn’t integrate or complement the rest of your technical stack. And 5, even if you’ve answered yes to all of those things, is every single person, every stakeholder in your organization, to our early point, committed to not just making a switch, but doing things differently here internally as well? Yeah. It’s not like a mic drop.

Ryan Phelan: There you go.

Chris Marriott: It was I mean, that’s been the reason for moves for the last 20 years. Right? And and it’s not Supposedly, but

Ryan Phelan: it’s not usually we’ve seen it.

Garin Hobbs: It’s these weird things that end up actually driving the decision rather than those 5 very, very practical reasons.

Chris Marriott: Oh, yeah. You always have the intangible. You always have the intangible. I think the other thing the common mistake that a lot of companies make is they don’t realize that you you were talking about budget. About the profitability of the move is generally not seen until year 2 or 3.

Garin Hobbs: Yes. Yeah.

Chris Marriott: And so Yeah. You know, we, we’re going through a a very small CRM migration. Right? And and she is going to end up saving $10,000 a year on this new contract. It’ll have the same functionality.

It’s great. She’s like, instantly, I’m gonna save 10,000. I said, yes. But instantly, you’re gonna pay me 15,000 to pay for the migration. I said, you’re gonna see your profitability in year 2, not year 1.

And so it took me a while to teach her that that’s, you know, the formula. I look at some of the migrations and some of the projects we’ve worked on in the last 3 years. They look at the ROI of their migration and their chase their choice in a 3 to 5 year window, because they’re so complex and sophisticated. And so along with that timeline for the RFP, for the migration, for all that organization and execution, It’s looking at when can you report to the board that you actually made money off of the decision, regardless of of what you make from an increase in throughput in your programs. And it’s not just about the cost on the paper.

I think that when we talk about underinvestment or why am I gonna pay $60,000, a $150,000 more in

Scott Cohen: a year, and you go, people savings? Yes. Time savings. Like, you have to you have to do the math. Yep.

Yes. Because that’s how when I’ve done this from the brand side, people go, what? Why am I gonna increase my ESP expense by 25%? Like, yeah. But I’m gonna save 50% over here.

Right. Because I’m not dealing with legacy platform crap.

Ryan Phelan: Yeah.

Speaker 5: Right.

Chris Marriott: Right. And in some cases, I’m gonna save that money. But from the reduction, there’s a certain ESP in the space. Love when we can pull people off of that platform and take it somewhere else because their prices decreased by 40%. That’s an instant savings.

Yeah. Again, you’re gonna roll it into x, y, and z. Yep. And you’re not gonna pay as much for this platform as you were for that platform. But there is a capex presentation layer that goes with time savings and throughput and programs and and but it also covers off on we’re gonna have to spend extra because this platform has ad costs and acquisition costs, and we’re gonna be able to do x, y, and zed.

And so there is a deep discussion that makes it more complex. That’s where, you know, when we come in, you know, Chris and I, you guys, when we come in to an RFP or to a migration, we can help with those conversations Yeah. To ensure that everybody is still on board even though they’ve made this organizational change.

Garin Hobbs: As far as those savings and, you you know, the cost efficiencies in terms of time, people, process, etcetera, I think I go back to your earlier point. You shouldn’t probably rightfully expect to see those in year 1 as well. Right? There’s Oh, no. Definitely a time to value.

There’s not only the mic the technical migration, but there’s the knowledge and skill set migration as well.

Scott Cohen: Right? It’s

Garin Hobbs: what does it take for me to now do I have to learn liquid? Do I have to learn AMP script? How long is it gonna take my team to not only learn those things, but but to become

Speaker 5: You should

Scott Cohen: never have

Ryan Phelan: to learn.

Garin Hobbs: Oh, thank you. I I’m with you a 100% ever again. But and and and not just the the operative, but more the philosophical as well. If we have this new opportunity in front of us and this great array of capability, how do we then amend our own current business processes and our philosophy of approach to meet and take full advantage of those things? And that just doesn’t happen overnight nor within the period of a migration.

Chris Marriott: No. And that’s extra services from we do that for companies post migration is stay on for a period of 6 months and help teach them, check their work, be almost a fractional resource for them, or take over for them when they when they don’t need it. Right? And so there are a lot of things that people don’t think about. They just think, hey.

I got a chosen ESP. We’re gonna put our data in there and our campaigns, and I’m gonna start, push,

Garin Hobbs: and go.

Ryan Phelan: Right. We have a It’s interesting because because vendors don’t make money in the 1st year of contract either. It’s not typically Yeah.

Chris Marriott: No. And the secret is they make money when you send your first email.

Ryan Phelan: Right.

Chris Marriott: That’s when they can realize the revenue for the for the p and l. Right. And so that’s why in a in a migration, and this is one of the biggest mistakes that companies make.

Scott Cohen: That’s why they push it to go so fast.

Chris Marriott: Yes. That’s why your first meeting

Scott Cohen: your first meeting Yeah.

Chris Marriott: If you go into the first meeting after you sign the contract and they start talking about IP warm up, you are in trouble. And you need to raise your hand to an agency to come in and control that conversation because the only reason they’re talking about an IP warm up is that they want you to start sending emails so that they can recognize the revenue to the street. That is the only reason because the last conversation should be about IP warm up. The first conversation should be, what is your data structure? How do we make it work inside of our platform?

What resources do you have? Let’s map out what your current, people, processes, integrations, all that stuff. Those are the core conversations upfront. It has nothing to do with IP.

Scott Cohen: Well, frankly, those should be happening before signing.

Chris Marriott: They should, but it commonly doesn’t. Yeah. And and that’s because it’s an investment that companies don’t wanna make. Right? And and ESPs Yeah.

Don’t wanna over commit in case it falls through. I mean, there’s been a lot of deals in the history of the space where it went from verbal and in the contract, it went to hell. Right? And so, yes, when we talk to clients, we want them to do that discovery and that mapping process, with a product we have, at the time that they have a verbal with the, with the last 2 vendors. Not even with the last one.

With the last two is when you’re supposed to start prepping for that migration because you know it’s gonna happen. And and regardless of who you pick, the migration is is your stuff, not their stuff.

Ryan Phelan: Yep.

Garin Hobbs: You know, having heard that, I wonder if there might be an advantage to that being a process that happens even earlier on in the decision before they even decide if they wanna move. Is there an opportunity to sit down and mentor?

Chris Marriott: So we

Ryan Phelan: do that. We do that. I mean, we do that. We’ve started But

Garin Hobbs: how many folks are really open to that? You know what I mean? It’s it’s

Chris Marriott: it’s really about transparency to the client to say, here’s what you have ahead.

Ryan Phelan: Yeah.

Chris Marriott: Right? And and if you’re

Ryan Phelan: while running a marathon.

Chris Marriott: Yeah. Yeah. If you’re ready to run this marathon at above mile x, you’re gonna start wishing you were dead. Yep. Right?

And and what we try to do is say, how can we make sure that when you pick the right vendor, you’re happiest with the vendor after you’re done. And so in that education of the client, it it benefits them to know, hey. You should start prepping for your migration today. You should heavily do it when you’re down to the last 2. And then, you know, we have clear steps to to help make that happen.

Ryan Phelan: So you first, Chris. Okay. I was gonna I was gonna say, the other thing about the migration and and the time it takes and another reason vendors historically tried to compress it. You’re exactly right, Ryan, and this is when they can recognize money. But, also, if you sign a 3 year contract, the longer the migration takes, the the shorter your actual earning cycle is in the contract.

And I’ve actually recommended the last couple of RPs we’ve done that that the migration be a discrete project. Don’t don’t put a 3 year contract starts after migration’s done. Everybody, I think, feels better. I that to me, that makes way more sense. There’s no reason why a single contract should have the migration built into it.

Keep them clean. Keep them separate. And and and that way, the the to your to the point you made right again, which which was excellent. Yes. They still wanna start sending, but the pressure’s off that they’re not burning their 3 year contract, warming up your IPs.

Yep.

Garin Hobbs: Correct.

Chris Marriott: Or just just being irresponsible with the timelines that it’s gonna take. Yep. And, you know, everybody knows that the the migration is going to

Ryan Phelan: take a bit of time. Yep.

Chris Marriott: Account for that in your volume estimates, in for your service fees, and all that kind of stuff. That’s what Chris helps do with a lot of companies is let’s structure the contract in what is realistic, and let us help you to to to negotiate that with the ESP Yep. Knowing that you’ve seen contracts for the last 8 years and and know what everybody’s gonna agree to.

Garin Hobbs: Yep. Exactly right. So, Scott, we’ve all given you the perspective from agency side, consultant side, provider side. Out of the 4 of us, we’re the only one who’s been on brand

Ryan Phelan: side through one of these.

Garin Hobbs: So Oh, no. I have. You have as well? Sears. Oh, Oh, that’s right.

You were at Sears and Kmart

Speaker 5: for a while

Garin Hobbs: as well.

Ryan Phelan: Sears and

Chris Marriott: Kmart, we moved from

Ryan Phelan: Cheetah Mail to responses.

Garin Hobbs: How was that?

Chris Marriott: I left before it got bad. Took them 3 years, to move, which was not uncommon. That was 15 years ago. But, you know, it was imagine. It wasn’t

Scott Cohen: I can’t imagine something taking

Chris Marriott: that long. We currently have a client that is in year 3 of a migration, and they probably won’t be done

Scott Cohen: for another 2.

Garin Hobbs: Is it a safe assumption to say that’s more of a legacy provider situation

Ryan Phelan: or or a more of the

Chris Marriott: newer wave of of solutions? Legacy to newer.

Garin Hobbs: Yep. So so somebody who

Scott Cohen: has, like, 25 years of data Oh,

Chris Marriott: like, they took grand

Speaker 5: Mhmm.

Scott Cohen: And their data to to the point earlier of you gotta have your shit ready to go. Yep. If you don’t, the migration takes that that extends Not only your

Chris Marriott: data, but the politics. Yes. That’s one thing that a lot of people don’t think about is Yeah. The politics of what exists today to what has to exist tomorrow. So think about it this way.

This group controls x. They have always controlled x. That’s where his power base or her power base is, and everybody has to come to the well to get the to get x. Well, with a new platform, now I want x’s stuff to be in that platform.

Garin Hobbs: Yeah. Democratized. Yeah.

Chris Marriott: Yes. So now what happens to his or her power base? It goes away because now it’s being put into the platform. Yep. Right?

And so if you’re not ready for those political discussion and the cover that you’re gonna need from the c level to make that happen, it just keeps going in a circular, hamster wheel of I don’t want to I do want to. Let’s spend 6 months exploring how that would look. And at the end, oh, it just won’t work. Let’s

Scott Cohen: How many times have you run into more more on the other side of the coin? But the number of times I’ve run into it where you go to IT and go, we need this, and they go,

Ryan Phelan: we could build it.

Chris Marriott: Oh. Oh, yeah. For sure.

Scott Cohen: Oh. And you go, do you have do you have can you do it in 6 months? Well, no. Well, we need to move in 6 months. So can you do it in 6 months?

No. Then we’ll buy it.

Chris Marriott: Yeah. I I can’t remember if

Scott Cohen: you that said it or somebody said it 10 years ago. If it exists, buy it. If not, build it. Yeah. I probably said that.

And I heard it.

Chris Marriott: Yeah. And I’m just stealing it from Chris who’ll probably claim that

Ryan Phelan: I think Under the same Yeah. Yeah.

Garin Hobbs: It it was the same Frankenstein. What?

Speaker 5: Yeah.

Chris Marriott: Yeah. Yeah. Yeah. Yeah. Yeah.

Ryan Phelan: But but that check, yeah, that Frankenstein. You can go back to my LinkedIn post. But,

Garin Hobbs: what was it?

Ryan Phelan: Now I can’t hear what’s my train of thought.

Garin Hobbs: Excellent.

Ryan Phelan: Next topic. We can build it. Oh, no. I no. Good for you.

Speaker 5: Yeah. Yeah.

Ryan Phelan: Yeah. The biggest mistake thank you. The biggest mistake I think any brand can make is hire a senior is hire, somebody from Amazon into a senior IT role within their company. Because every time I run across a company where they’ve got homegrown ESP or or they’re they wanna, you know, they they wanna have a team compete in the RFP that’s internal Mhmm. There’s an Amazon guy behind it because they think they can because they built yes.

Amazon. So they think they can build everybody. So don’t hire anyone from Amazon. A 100%.

Garin Hobbs: I’d have them as a I mean,

Ryan Phelan: they’re great.

Garin Hobbs: They’re the response to everything that I would bring to them is, well, we can build this. Right? And my response was always, but you won’t. Right.

Ryan Phelan: No. You build it.

Garin Hobbs: How soon

Scott Cohen: Is the worst. And how many 1,000,000 of dollars do you need to hire internally and do all that?

Garin Hobbs: Yeah. It’s but it’s beyond that. Because now you have to support and continue to evolve Right. Something that is entirely proprietary

Ryan Phelan: and built it out. Yeah.

Garin Hobbs: And by the way, the knowledge of which is usually solid within 1

Ryan Phelan: or 2 people who may or may

Speaker 5: not No. They’re not

Ryan Phelan: gonna document it. Yeah. Right. They’re gonna build that document. Well, and you know what?

The minutes are it’s done. They’re gonna move on to the next cool project. Right. And it’s cementware from then on. Yep.

It’s not gonna evolve.

Chris Marriott: But that’s the that’s the funny thing about the perception of what email is is that there are some legacy platforms that were built on their own that that do work well.

Speaker 5: Yeah.

Chris Marriott: But that was a service of they had to because the platforms at the time could not support the volume. Responses, exact target, any of the big the big players back in in the early or mid 2000 could not handle that volume. And and Amazon, Facebook, all had no choice but to build their own platform for deployment. Now today, that doesn’t exist.

Ryan Phelan: Right. Yeah.

Chris Marriott: They can capacity elasticity. Yeah. When you talk about, cloud based infrastructure, when you talk about the scalable technology that a lot of these ESPs are built upon, it’s no longer a choice of builder to buy it. It is always buy it.

Ryan Phelan: Yeah. Yeah. I think

Garin Hobbs: of folks like Groupon. Right? Nobody could support Groupon with the platform for decades, because they had just such monstrous Right. Send volumes and Well, I

Ryan Phelan: mean, in a worst I mean,

Garin Hobbs: it’s not just the volume. It was the burst of emails

Ryan Phelan: just had

Chris Marriott: to go out in

Ryan Phelan: a limited all of all of the daily, you know, deal links. And, you know, they had to and who’s gonna

Garin Hobbs: build this megalithic thing that sits there idle 90% of the time?

Ryan Phelan: And then 100,000,000,000 emails in 10 minutes keeping 7 AM in 10 Right.

Chris Marriott: But Chris and I have talked to one of the largest centers on the planet. They’re shop they may be shopping for an ASP. Right? Yep. And that’s not and they don’t even cross the Rubicon of we should just build it ourselves.

No. It is just this is the reality of of things even at their volume. Yeah. And the technology just is is capable of doing I mean, I can remember being at at at responses. And part of we were in an Orbit’s pitch, part of the the pitch was, you’re gonna come to our office.

We’re gonna give you a USB stick of, like, 5,000,000 people, or some ungodly number. You have to upload it into your system and send the campaign while sitting in our office, and we’re gonna have the stopwatch on. Yep. Now the funny thing is behind the scenes, it was a dedicated server in the office of the corporation, and everybody had shut everything else down.

Ryan Phelan: And it was people praying over the box Oh, man.

Chris Marriott: That it could do it.

Ryan Phelan: It was not even it wasn’t even in our stack.

Chris Marriott: It was a server set up on somebody’s desk

Ryan Phelan: Oh, jeez.

Chris Marriott: Just to power the demo. A

Ryan Phelan: hardwired demo.

Chris Marriott: It was. It.

Garin Hobbs: Remember that old office? It was a great location. Well, let’s see.

Scott Cohen: We talked about AI briefly. Mhmm.

Garin Hobbs: Actually, I know we have a question for this. Do you mind if we hit that one? Yeah. The underinvestment? So, you know, where are folks under investing in email?

I definitely have a thought on that, but we’d love to hear from Ryan and Chris first.

Ryan Phelan: Let’s let’s Raggle first.

Chris Marriott: Everywhere. At every level, staff, innovation Yep. Agency services. There is not a piece of the email, department that is funded to full capacity unless you get to the super enterprise level. And then you have, internal people, external people, agency people, that are properly investing.

But on a on a I have rarely run into below the super enterprise. I have rarely run into a need to develop department that I’m like, wow. You you got all the money you should have. You got all the people you should have. You’re clicking along.

Everyone I meet is deficient or stressed or pushed to their boundaries, and so that underinvestment is is everywhere.

Ryan Phelan: I would say service mainly, agency services. And Yeah. There’s a couple of reasons for that. Back in the day, ESPs like I said, that’s why I was hired by Digital Impact. Had had to have agency services or they nothing got done.

Mhmm. And over time, the age the ESPs with agency services became fewer and fewer numbers. Some of them shut their doors. Some of them shut down that part of their business. So so you’ve asked for it today, and particularly when you look at the next gen platforms, you know, that they because of, you know, the Wall Street model of, you know, services is a will lower your valuation.

So keep it all There’s

Scott Cohen: no profit in services. Exactly.

Speaker 5: Right?

Ryan Phelan: The margins are too low.

Scott Cohen: Because it’s a people driven thing instead of a technology. Exactly.

Speaker 5: Right.

Scott Cohen: The people are not scalable. Right. Well, then it’s just comparative.

Speaker 5: And and

Ryan Phelan: so they’re gonna drag down your multiple. So you don’t wanna have a lot

Chris Marriott: of the key thing, even today. Yeah. Right. ESPs don’t want services revenue.

Ryan Phelan: Well, you

Garin Hobbs: well, then you now have a hourly model or a time monetization model competing against the SaaS model, and the 2 are natural enemies. Right? I mean, SaaS has literally built something once and sell the shit out of it for the next few years. Correct. And there’s no way to do that with a we’re we’re in an issue in a service issue or service agency where time is your currency.

Ryan Phelan: Mhmm. But but and you keep but a brand can’t replace that level of expertise Agree. Internally. They they simply can’t because people cycle through. You know, the people don’t stay in those jobs long.

People it it’s it’s a stepping stone up Where where you have the experience, where you have the the vision, it it’s really in and and this you know, I’m not an email agency, folks. So I can say there’s nothing self serving if that’s where the email agencies are, I believe, are so important. Because they bring that creative you know, the creators in an email agency want to do email creative. The creative at your regular agency don’t wanna do email creative, and they you’re getting the guys just hired out of out of Parsons School of Design. It’s the true artist

Garin Hobbs: job in commercial artist house.

Chris Marriott: Yeah. Exactly. And so Well, it’s it’s also the direct mail people or the website designers.

Ryan Phelan: Yeah. Right.

Chris Marriott: Slobbing it together in a single image with a header and footer and saying, look, it’s pretty. Yeah. You know?

Ryan Phelan: So it it I think I think they should and and I and and I even see it when when we when we talk to brands and survey, you know, what what are your biggest obstacles to, more efficient program or or how do you plan to improve ROI? It it you know, real time data is always right there and and and the way you leverage that data. But right behind it is always services. I mean, they know and it’s so it’s not that they take people’s fault. It’s the synths that that aren’t putting you know, they they need to put more money behind their email program.

And that is if you if you’re on the right platform, which lots of people are, you know, the only way to really bring more efficiency out of that is to put the brains behind that, and then you can find that. You’re not gonna build those teams in house, and you’re not gonna find it at your vendor anymore.

Chris Marriott: So Right.

Scott Cohen: You gotta hire an email agent. The problem is the perception of value because email is cheap.

Ryan Phelan: Right.

Scott Cohen: Mhmm. By comparison, like, if if you gave cup in 2 lives ago, McKinsey came into the organization I was working for at the time, and they sat me down. And their question was, if we gave you $5,000,000, what would you do with it? And I sat there and I went, well, I’d give 4,000,000 of it to the website team to make sure the website was the best it could be. And then I’d still have trouble spending the other million because the program I had at the time wasn’t big enough that I was gonna get anywhere close to spending a1000000 even with my team being covered under that million.

Ryan Phelan: Right.

Scott Cohen: If you give $5,000,000 to digital advertising or paid social, they can spend it in a day without blinking

Speaker 5: an eye.

Ryan Phelan: That’s true.

Scott Cohen: And so there’s this perception of value of, oh, because I gave them them a $1,000,000 and I gave you $50,000, I expect you to get more out of $50,000 than they get out of a million. Right. And you go, I think this is flipped. Right.

Chris Marriott: But okay.

Scott Cohen: So there there is that that’s the uphill I mean, I’ve been on both sides. Right? And then on the brand side, you you constantly fight that battle of, I need to raise my ESP spend by $40,000 next year, and they go, oh my god. And I go, that’s a rounding error for the Google team. Why am I getting this shit?

Right? And so it’s crazy.

Garin Hobbs: I I agree with both these points. I agree with Ryan a 100%. They under invest everywhere. Specifically Chris’ point services, agencies like ours, certainly shorten that time to value and, you know, get you to that point of success that much faster. Yep.

I see another area, and that’s in the solution itself. Right? Specifically in the ESP solution. Not so much in the base license for the base platform. But what we’ve seen lately, or lately, the last, you know, handful of years here, is that look, the battle between ESPs used to be one of acquisition and retention, and that still exists.

But now there’s a secondary battle, and that’s one of monetization. Right? You see a lot of ESPs, they sell the license, and now it’s, how do we further monetize our existing customer base? So they innovate, but they lock those new innovations behind, you know, additional paywalls, additionally paid sort of features and functionality. And to Scott’s point, it’s, hey.

We just spent a half $1,000,000 on a solution. We’re not spending more for these other little sort of, you know, bits even if they can advance the the business in a meaningful way. Case in point, one of the new wave of ESPs. 4, 5 years ago, their big pitch was, we give you unlimited data. We’ll adjust all of your data, help you find the actual insights, and that’s what’s gonna make the biggest difference between us and the competitors out there.

Mhmm. And we’re not gonna charge you for any of that. Right? It’s just an all you can eat type of models included in the licensing. 2 years later, they did a flip on that.

And it’s, well exactly. We’re now gonna start charging for data. There’s a certain limited amount that comes with your base license. But if you want more, specifically things like, you know, additional profile data, event data, most specifically Yeah. Then that’s gonna cost you.

Ryan Phelan: Right?

Garin Hobbs: It’s the result of that. They don’t spend on that event data, and it is the event data

Scott Cohen: that you need.

Garin Hobbs: That really drives the need,

Ryan Phelan: but that that files up very

Garin Hobbs: quickly A 100%. So now you are just right back to you may as well have a legacy platform because you’re not unlocking a lot of the things that you this platform was meant to unlock. Right? So I see folks under investing in some of that additional functionality or specifically the ability to enact a lot of their data on these platforms now that it’s being charged.

Chris Marriott: But that’s a problem born out of and I would I would agree with you. I think that’s one of the problems born out by some of the players in the space that are known for nickel and diming for everything you want, and QBRs turn into 10 minutes of what your business is doing Yeah. And 40 minutes of what now you need to buy.

Garin Hobbs: Yes.

Chris Marriott: And so there’s almost this PTSD from going from that kind of vendor to another vendor, and they’re just like, oh god. I don’t see it all the time. And then somebody comes and says, hey. We got this new thing, and they’re like, oh god. Bless.

Leave me alone. You know? And so it’s this panic.

Scott Cohen: What’s the the the worst line I ever heard? Don’t worry. It’ll be in the next release.

Ryan Phelan: Oh. Oh, yeah.

Garin Hobbs: It’s on the road map.

Ryan Phelan: Yep. Yep.

Scott Cohen: It’s on the road map. It’ll be in the next release. There’s nothing worse than

Chris Marriott: that. Mhmm.

Scott Cohen: Because it’s never the next release.

Garin Hobbs: Never the next release. The worst is when they hold their actual annual conference showing all of these things that don’t have the. This will be out later this year. 2 years later, it still hasn’t been utilized. Yeah.

Scott Cohen: Well, I mean, AI is we got this far without other than nuking it in the beginning. Yeah. How crucial is AI to a tech stack right now? When we talk about underinvestment, is part of the problem that AI is tackling the stuff it shouldn’t be, like the soft skills, like writing and design?

Ryan Phelan: Yes. Yes. And Mic drop.

Scott Cohen: Yes. Yes. Yeah.

Ryan Phelan: That’s another area where the vendors got it wrong. I agree. They’re pitching the soft skills in their platforms and brands and I’ve I’ve seen this happen. And brands are sitting there thinking, no. I want the stuff taken off my plate that I hate to do Yes.

Or that I can’t do. Yes. And so vendors, once again, are disconnected from what they think brands want versus what brands really want.

Chris Marriott: That’s a maturation of AI. Right? Is so it started off with language models, and now we’re and that was the infancy of it.

Garin Hobbs: It was NLP for the longest time.

Chris Marriott: Yes. And and, you know, my comments early on was, that’s great. NLP will be here for 5 seconds. Let me see what the next iteration of that is. And there are some vendors that are very aggressively going against or going for agent development in data manipulation and propensity driven models and some of the things that used to take us 6 months to execute with 30 people.

To your question, I don’t know that I put a lot of value in what it is today because when when we’re here next year, it’s gonna look vastly different. Mhmm. Mhmm. And so what I would say is when you’re looking at vendors with AI capabilities, look at that AI road map in connection with what they’ve already done. And there should be an equal amount of what they’ve already done to as what they’re going to promise for the next 12, 6, whatever months.

But what you wanna do is pair yourself with a technology vendor that is aggressive in developing these technologies and this AI, not necessarily what they have today.

Garin Hobbs: Yep. Agreed. I don’t know if we can mention specifics here, but, that quick, presale we saw Kara give. Mhmm. You know, one of our our industry colleagues.

And, I think that was the most practical and meaningful utilization of AI that I’ve seen thus far. Right? Before it’s it’s a lot of window dressing. And worse, it’s people taking the same shit that’s existed for 5 or 10 years calling it AI. Correct.

Same time optimization. No.

Ryan Phelan: That’s not AI. Right?

Chris Marriott: No. That’s not AI.

Garin Hobbs: RFM. No. That’s not. That is. Thank you.

Right? It’s it’s really in the insights, querying the data, understanding where my opportunity lie, and more importantly, what should I do? What how should I execute to actually realize that opportunity?

Ryan Phelan: Yes. But, yeah, the length the the

Garin Hobbs: the copy, the creative, that’s the worst possible place to be applied, because it feels disingenuous. You can immediately sense that complete loss of EQ in those in those AI generations.

Ryan Phelan: Oh, that’s the fun part of the job. The creative stuff is the stuff that’s the fun part of the job.

Garin Hobbs: That’s why I’ve stayed in email this this entire time. I’m fascinated by what it takes to compel people on a daily basis to put hands on mouse, fingers on keyboard, and follow through on

Ryan Phelan: a call to action. Right. And I don’t want

Garin Hobbs: a computer doing that for me. Right? It’s a human experience. Right? We’re we’re it is a reflection of our own human experience.

I don’t know if that’s something that can be digitally replicated. I’ll probably be proven wrong in the next few years, but

Ryan Phelan: for right now Yeah. Yeah.

Chris Marriott: No. I I don’t wanna see AI in creative. I don’t wanna see AI in text unless you’re gonna do it at scale and informed by models. But even still, it’s it’s you

Scott Cohen: have to inform the models. Correct.

Garin Hobbs: Yes.

Scott Cohen: That’s the piece I think people are basically

Speaker 5: like, oh,

Scott Cohen: I can just throw it in the chat. They’re fine. They’re not leading It’s like Right. Well, they’re just learning for everybody. They’re not learning

Chris Marriott: you. Yeah.

Scott Cohen: They’re not learning your brand. They’re not learning your voice. Right. The promise behind AI is that you teach it, and it makes you faster. It doesn’t replace you.

It makes you faster. Correct. I think the people are what’s happening is and, Chris, you brought it up earlier with the selling to the practitioners versus selling to c suite. C suite goes, oh, I can get rid of people. Right.

And there’s this curse of good enough. Yeah. Yeah. And you you we we didn’t We’ve already

Ryan Phelan: seen it.

Scott Cohen: We’ve done the mic drop of maybe we’ll do another podcast on is AI making us dumber. Yeah. The short answer is yes because people are going, yeah, it’s good enough. Yeah.

Garin Hobbs: Yeah. I think one of the problems go back to your point, you know, Chris, about why people are necessarily using it in

Ryan Phelan: creative and in copy.

Garin Hobbs: You know, they are hoping that AI removes these repetitive things that tend to take up a lot of their time. When you Mhmm. Work for a brand with a high send frequency, it could be incredibly taxing to come up with, hey. What do I say today versus what I said yesterday? Mhmm.

How how how is what I’m gonna say tomorrow be different to today? So it feels very alluring, I think, I would imagine for them to be able to, like, hey.

Chris Marriott: Let’s talk about this. A break. Yeah. Yeah. Yeah.

But the problem is is and, you know, when I talk to marketers about AI, and this may be a little harsh and and maybe it you know, there are particular circumstances. Your cows in the park. I know, but there’s people’s hurt feelings. If you need AI to to to create your copy, your subject line, Go back to school You heard the right job. For for being a marketer.

That’s your job. You know, I’ve been told that I should never write consumer facing copy, and and it’s true. I shouldn’t. But I can always start it off, and somebody can look at it and complete it. Right?

I don’t need AI to write it because every time I see AI written copy, I just throw up. You can tell. You can tell.

Scott Cohen: And I’m sorry. The AI imagery, they haven’t figured out eyes and fingers yet. Fingers. And the AI video where the eyes don’t really move, but they move all the time. In a commercial, you can see it.

Right? Oh, no. It’s like Yeah. There’s I think I’ve seen it. I’ve actually haven’t watched the show, but the show Scorpion, there’s this clip I’ve seen where, like, they’re in an art museum, and one of the guys just looks at it, and then he just slices it.

And they all start freaking out, and he’s like, no. It’s a fake. The brushstrokes are wrong. They’re like, how did you know? And it’s because I can’t wait.

Catherine what’s it? Catherine McPhee, whatever her name was from American Idol. She’s on that show.

Ryan Phelan: Oh, okay.

Scott Cohen: And, her there’s like, she loves this painting, but she was, like, revolted. Like, she could tell something was off about it. And I go back to that and go, that’s AI.

Ryan Phelan: Right.

Scott Cohen: Yeah. Like, if it’s you can sit there and go, it can get you some of the way there, but the important stuff, the nuance, the EQ, you kinda go,

Garin Hobbs: this is

Ryan Phelan: But that’s quite right.

Scott Cohen: Bit of Westworld. Yeah.

Chris Marriott: Yeah. And and I think that that’s that is a curse of the vendor class that for the last 10 years has fudged the truth on what big data was, machine learning was. Some more. Big data. Remember big data?

Scott Cohen: I remember big data.

Chris Marriott: Machine learning, AI, all this stuff. It’s all been pitch after pitch after pitch. We’ve got the newest buzzword. Right? Dejure.

Speaker 5: Yeah.

Chris Marriott: Yep. But if you ask a marketer today, what’s the difference between machine learning, AI, and generative AI? They’re gonna look at you and go, I don’t know.

Garin Hobbs: Is it generative? Copy.

Ryan Phelan: One. Yeah.

Chris Marriott: Right. But Good. And that’s that’s the problem is that we’re informed by a vendor class that is selling stuff and and putting lipstick on a pig. That is not entirely true. What what needs to happen for marketers is really understanding what these what these terms mean and how the impact is and how that is translated to the platform to which they use it and what are the limitations to it.

There are a lot of limitations to the best AI rollout at a vendor class right now, but the the marketer needs to not just suck up the sales speak. They need to actually do the research and reach out to people and say, okay. Apply this in a use case. Help me to understand how this interacts with my data, how to your point earlier, how do I teach it accurately

Ryan Phelan: Yep.

Chris Marriott: Or provide the right information to it for it to be taught? Yep.

Garin Hobbs: I mean, to your point, I mean, vendors, I think, are pushing something that is, in a large sense, a solution looking for a problem. Right? So it’s, hey, where can I apply this? So rather than, what are the friction points in my in my production process? Where do I lack the resources, the knowledge, or the available time to do these things myself?

It’s it’s where can I reduce the things that I should be investing less of my time in so I could be working on the more transformative aspects of my marketing strategy? Exactly.

Scott Cohen: Yeah. Alright, guys.

Ryan Phelan: What’s 2020? We

Scott Cohen: have. What’s 2025 look like? Let’s see some predictions here.

Ryan Phelan: I before I just wanna go back to one thing, Garrett.

Garin Hobbs: Okay.

Ryan Phelan: You were talking about, you know, you have to email create it for today and then email create it for tomorrow, email create but think about it. 95% of the people you sent that email to me today didn’t see it.

Garin Hobbs: Agreed. So we put a lot more pressure on ourselves to be Thank you. Exactly.

Scott Cohen: When I

Ryan Phelan: when I learned that change the email out the next day, just maybe send out change the

Scott Cohen: Three lives ago,

Garin Hobbs: we sent the same

Scott Cohen: we had 4 emails we sent every week.

Speaker 5: Yeah.

Scott Cohen: It was the same damn email every

Ryan Phelan: because most people don’t send

Scott Cohen: And to your point, I would send you something about this one thing. You got it 6 months ago. You’ve been getting the same email for 6 months. You converted on the one I sent you 6 months ago today versus the one I sent you today.

Garin Hobbs: Yep. Right.

Scott Cohen: That’s how crazy humans are.

Ryan Phelan: Yeah. Yes. Yeah.

Garin Hobbs: Yeah. The inbox has become in the new search engine a lot of times. Yeah. Oh, gotcha.

Chris Marriott: Long tail and we did studies with this back in in Sears. We would look at clicks and purchases for an email out 12 months.

Ryan Phelan: Yeah. Yeah.

Chris Marriott: And 30% of the revenue from an email came after the first 72 hours. I believe it. I believe it. And and that’s why Especially for high consideration purchases. Exactly.

Like that. It’s but also think about this. When you move ESPs, you cut that off. Yeah.

Garin Hobbs: Yes. And Yeah. That’s what it is.

Chris Marriott: Just you have you have reset the clock on every email. And so a

Ryan Phelan: good call out.

Speaker 5: Yeah.

Chris Marriott: One of the things you have to do is go back and look at what your long tail is and how are you gonna replace that revenue and our and what campaigns are you gonna do to make up that footprint?

Ryan Phelan: Mhmm. Yep. Yeah. Good point. Yeah.

This point,

Garin Hobbs: I think people going back and, you know, engaging with emails that are unsolved in their inbox. It kinda goes back to I think it’s an article I put it out a few weeks ago. It’s really trying to sort of reset a lot of marketers’ expectation of email. It’s not, hey, if I send an email out, every one on my list is gonna convert. Some of them will.

But in large part, it’s a it’s a fleet of being. It’s a showing the flag exercise. It’s about staying top of mind, top of consideration. When folks are ready to convert, they wouldn’t think of going anywhere else because you did continue occupying that space in their inbox. Yep.

That is the value. It’s not always gonna be click send, and then I see, you know, all of that come back in terms of concrete ROI immediately. It’s you’re buying yourself market share for future

Scott Cohen: in many cases.

Ryan Phelan: It’s awareness. It it it it’s an impression. I mean, ad people talk about impressions. Yeah. And billboard what seems to be in a billboard in a subject line?

Not much. And

Scott Cohen: and So it’s a lot it’s a lot safer too. Right. Nothing worse than seeing a QR code on

Ryan Phelan: a billboard. There you go. Yeah. But but you That’s fine. As you’re deleting an email, you’re seeing who it’s from.

So it’s still making an impression from you even if you don’t open it. And I think most of us could come very close to naming every brand. Now we’re crazy. But but I think most people when they they thought about it, we could name every brand that they’re subscribed to. You know?

And Oh. And that’s the and that’s that memory thing that says, oh, I know I get emails from BrandX, and I now wanna buy something. So I’m gonna go back and look at that.

Garin Hobbs: Or how many people will go into a store? Repetition.

Scott Cohen: Yeah. How many people go into a store and then go, oh, wait. Do I have something in my email that’s a coupon?

Ryan Phelan: Exactly. Right.

Scott Cohen: Exactly. A great example of impressions and just being ready for when they’re ready to make that purchase. 100%. Alright, guys. Alright.

Let’s do Okay. 2025 predictions. Okay. They can be safe. They can be controversial.

Chris Marriott: Do we get one? I think we should get one. Everybody gets one. K.

Ryan Phelan: Year of I I think, mobile push is gonna see an explosion in 2025. I think it’s it’s now natively in most platforms, at least the newer ones, the next gen. And pricing models are I’ve seen them changing. It’s it’s incredibly inexpensive to use, and I think brands are are going to be be embracing, because because real time data is no good if you can’t get into the customer’s hands in real time. Yeah.

And SMS is too expensive. It’s always been too expensive. And but mobile pushes a way to get event we’re talking about event data earlier, to react to an event in real time to something that we have with us all the time. So, I’m I’m declaring 2025 year of mobile push.

Garin Hobbs: I’d like to see that broaden down even beyond mobile. Right? I think I mean, web push is something that I think should be a bit more ubiquitous than it is today as well. Mobile push is fantastic. I’ve never seen web push work.

Scott Cohen: So Yeah. Yeah.

Ryan Phelan: I hope

Chris Marriott: you’re right.

Ryan Phelan: Well, I’m just talking about the Yeah.

Garin Hobbs: We’re talking about the evolution of the channel. Right? So mobile is it it’s really difficult to beat the engagement and the immediate sort of reactivity to mobile push. The problem is is the barrier of entry. One, you have to have an app.

2, your party your audience has to download the app. 3, they actually have to opt in to receive those push notifications.

Ryan Phelan: But they’ve opted into your emails. I mean, you make it worth their while. It’s

Garin Hobbs: it it’s true. Right? Like, that is the barrier of entry. It’s and then a lot of the times when you talk to the

Ryan Phelan: brands, it’s, well, I already maintain a website. Now I have to maintain This segment of the podcast is not teardown Chris Marriott.

Speaker 5: No. No.

Garin Hobbs: Not even. No. No. No.

Speaker 5: No. No. No. No. No.

No. No. No. No. No.

No. No. No. No. No.

No. No. No. No. No.

No. No. No. No. No.

No. No. No. No. No.

No. No.

Ryan Phelan: No. No. No

Garin Hobbs: Unfortunately, I think it’s still just a fraction of their total addressable audience because Oh, yeah. Of the contingency

Ryan Phelan: of the app. I don’t disagree. I mean, email’s gonna be king for the next 25 years. Agree. But mobile push is 20 Well, I think year mobile push.

I think what’s important

Scott Cohen: to call out here is and we’ve talked about this on some previous episodes as well, is I feel like 5, 10 years ago, people just got an app because they thought they needed to have an app, and we’re past that. The maturity of apps has gotten past that. People who are coming out with apps have a purpose for them.

Ryan Phelan: Right.

Scott Cohen: Yes. And so because there’s nothing worse. I mean, the the old app days, it was it’s just a storefront.

Garin Hobbs: Literally. It

Scott Cohen: was literally just the mobile website.

Ryan Phelan: I’m like, well, why am I downloading

Garin Hobbs: an app?

Scott Cohen: It’s just that. Whereas if you have an app that enhances loyalty and there’s subscription and membership and shipping tracking, I mean, we bash on Amazon a little bit, but they have the best app on the planet probably for usability and everything else. It’s almost freakishly easy to use in terms of buying and keeping track of everything.

Ryan Phelan: Because I don’t think I can buy Kindle books on their app.

Garin Hobbs: No. You have to go through the website.

Ryan Phelan: And that drives for the hell

Speaker 5: out of

Ryan Phelan: Android. Right.

Chris Marriott: Amazon But, yeah,

Garin Hobbs: there you go. Yeah. As well.

Chris Marriott: Oh, is it? Yes. Okay.

Scott Cohen: But but because of that, if you have an app that increases stickiness, then, of course, push comes a long way. Exactly. If with these next gens platforms having them, you know, I think MessageGearsbot would Swerve last year. Yeah. Sure.

This time last year. So Cool. You know? And that I’ve used that platform on the brand side. It’s a great platform.

So there’s benefits there. And so I can totally get on board with that because thank god we’re past the I have an app because I said I had to have one.

Ryan Phelan: Right. Because everyone else is doing it.

Garin Hobbs: Yeah. Yeah.

Chris Marriott: So in a typical year, this industry is split into thirds. 3rd of the industry is in in change, so they’re in RFP. They’re wanting to make a change in their stack. A third just moved, and a third is just fine. Starting at the end of q one this year, 95% of the market said, we’re just going to stay put.

We’re not gonna go anywhere. And this is across the board, not only email, SEO, SEM, you name it. Everybody kind of froze this year. I think for 25, not a prediction, it’s a hope and a dream, is that I believe that 25, we’re gonna see those thirds shift dramatically. I think there’s gonna be not a replacement cycle, but an innovation cycle.

I think that, the pause that a lot of marketers, a lot of companies took this year is gonna unstick, and they’re gonna realize that if they stay dormant too much longer, they’re gonna be surpassed by the competitive set or the technology set. And 3rd, I think, you you know, people just can’t nature abhors a vacuum, and I think this year has been a vacuum for a lot of companies. And so 25 is about those those thirds shifting dramatically. So I like that. I like that too.

Garin Hobbs: For myself, I’d say oh, sorry. Did you wanna address that?

Ryan Phelan: No. Go for it.

Chris Marriott: But you said mobile player web push.

Garin Hobbs: Well, I said as far as we’re talking about

Ryan Phelan: he was ripping off of them. I just said, yeah.

Garin Hobbs: Say, hey. Let’s let’s explore the push. RCS. Right? So I think that really opens up, and really increases sort of the viability of mobile as a channel.

Right? Right now, you kinda see a big divide between brands who just use it as a secondary channel for the same stuff they’re sending out via their email, and there are those folks who tend to use it a little bit more thoughtful way. Maybe it’s more of these sort of time sensitive, the alerts, the status updates, and things of that nature. I think RCS is gonna bring a lot more purpose to s to SMS or to RCS is gonna bring them more of that to mobile messaging. MMS is really is prohibitively expensive.

RCS kind of, you know, alleviates that issue. But now we can take more actions directly within the text itself. Right? Sort of what the promise of, sort of, you know, Amford for email is supposed to be. We now are likely gonna see more of that being realized in SMS, which certainly opens up the use cases and broadens its usability as a channel.

Scott Cohen: I will add on, RCS will be huge for subscription management. Yes. Mhmm. And for any sort of order management, things like that. I don’t know what it costs.

I haven’t heard whether it’s an s SMS equivalent or an MMS equivalent, but I

Garin Hobbs: think equivalent. It’s no addition. It’s literally just a new syntax that is

Scott Cohen: Oh, that’s fantastic. Yeah. I mean, I don’t I will not be cheeky and say ample have its moment because I don’t believe it will.

Garin Hobbs: Absolutely.

Scott Cohen: I think it’s still a far cry away from being I mean, when you create a third MIME type, you’re creating problems. So unless it becomes ingrained in all of the next gen platforms as an option, it’s never gonna see a direction.

Ryan Phelan: Grace has started talking about it, which which, you know so now it was it was Netcore sort of like the voice crying out the wilderness. Netcore stuff is Now Ray’s talking about it. And and so while I agree with you that I I don’t think 2025 is the year of AMP, once somebody like Bray’s starts talking about it, you’re gonna see, I think, the other guys talk about it a little more, the other next gen platforms talk about it a little more. They’ll have to. So I don’t think it’s, I I don’t think it’s on life support anymore, and I think it was on life support as recently as 2023.

Yeah.

Scott Cohen: Yeah. I would just say the interesting thing to watch will be the m and a space.

Chris Marriott: Oh. You know,

Scott Cohen: it could be the legacy.

Garin Hobbs: List of the Yeah.

Scott Cohen: I’m stealing it from you, Chris, because you were talking about that, but it makes a ton of sense that the late some legacy player is gonna buy somebody

Garin Hobbs: They’re gonna have to.

Scott Cohen: They’re gonna have to. So they’re gonna they’re either gonna have to or they’re gonna they’re gonna have

Ryan Phelan: to bow out. Wall Street Journal was talking about Salesforce, and they’ll be looking at brands.

Speaker 5: Yeah. So it’s

Ryan Phelan: not even secret. It’s not even a Right. Right? I mean, that’s it’s in the Wall Street Journal.

Scott Cohen: In this period of consolidation. We’re in this period now. We’re not in this period. So it’s it’ll be interesting to watch. I also I’m not bullish on q one opening the floodgates.

No. No. But q 2, based on what happens in q one politically because, you know, we had the election this year, which everybody just held on to their wallets basically as a result, and they’re gonna watch and see what happens in q one.

Chris Marriott: I would push back on that a little bit because budgets are gonna be fresh

Scott Cohen: in January. Could. They might wait on it too.

Chris Marriott: It might. My thing is that I’m gonna be watching the market, the pipeline from Jan 1 through, Valentinsta.

Ryan Phelan: Yeah.

Chris Marriott: And in that time, I don’t think we see a lot of, closed won opportunities, but I think we have a lot of

Garin Hobbs: conversations. Opportunities. Yes.

Chris Marriott: Increase of opportunities. Pipeline is a lot more full. There’s a lot of realistic timelines put on decision making processes, and it may push into the end of q one. But I do believe that that that first 6 to 8 week period, will be a good indicator of what the rest of the world rest of the year looks like from an interest in conversation.

Ryan Phelan: Cool. Good.

Scott Cohen: Well, we could go for another hour, but, you

Chris Marriott: know, cocktail party starts

Ryan Phelan: I was about to say I’m parched. I gotta say I’m parched.

Scott Cohen: Alright. Well alright, guys. Where can people find out about more about you and your companies?

Chris Marriott: You can go to rpeorigin.com. I’m on Twitter at ryanpphalan. LinkedIn, always look me up. And if you wanna see my personal side, you can go to ryanpphalan12 on Instagram to see all my cooking adventures.

Ryan Phelan: And you can find more about me on email hyphen connect. I know. Hyphen. Not not but it’s email hyphen connect.com, or you can go to the Global Email Alliance, of which we are all parts of. We are You can also find out, or follow me, at Twitter at csmaria, or look me up on LinkedIn, or look up look up, email connect on LinkedIn.

Scott Cohen: Mhmm. Well, this has been awesome.

Garin Hobbs: This is good fun. Yeah.

Chris Marriott: Next time, we need to do drinks. I think the government

Speaker 5: Next time.

Ryan Phelan: You can stay. You know

Scott Cohen: what? You know what? I I don’t think we needed help. Let’s put

Speaker 5: it that way.

Ryan Phelan: I think we We

Scott Cohen: do need help.

Chris Marriott: It’s a little challenge.

Scott Cohen: Well, hopefully, all of you could keep up with all this, and we’ll find out very shortly whether the recording actually worked. Thanks to you all who are listening and watching. If you’d like to learn more about Inbox Army, check us out, inbox army.com. Till next time. Be safe and be well.

Ryan Phelan: Cheers all. Thanks. Make good choices.