How GDPR Highlights How We Should Be Marketing
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John Jantsch: Hello and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch, and my guest today is Ryan Urban. He is the founder and CEO at Bounce Exchange, a people-based marketing consultancy that helps organizations increase their online conversion rates, and we are gonna talk about what is, in at least May of 2018, the most talked about topic it seems like, something called the General Data Protection Regulation, or as we fondly refer to it, GDPR. So Ryan, thanks for joining me.
Ryan Urban: Hey, hey.
John Jantsch: So, is there a succinct way to describe what this is?
Ryan Urban: I think it’s just basically what the people have wanted for a long time, and it’s not everybody, but it’s just people want their rights respected, want the right to be forgotten, want to be able to know kind of what you’ve collected on me, and if I want to have that removed, please do, and if I’d un-opted to something, please don’t spam me. So it’s kind of just like basic tenants of life. It’s like, don’t spam me, if I didn’t ask for it, and don’t get a whole bunch of data on me if you don’t need it, and if you have a whole bunch of stuff, and I’m not your customer anymore then please delete it.
John Jantsch: I would agree with you, there’s a lot of common sense in this that we as marketers probably should want to do anyway. But what do you think drove or is driving some of this, ’cause there’s a couple of initiatives. This one’s mostly in the European Union, but there are a couple of initiatives like this. Is this consumers really wanting to take back control or is this regulation?
Ryan Urban: It’s a combination of both. So, look, if you’re a politician, you want to get wins, and this is, in the U.S. you get rid of things like net neutrality, which is a win for the carriers and win for other people, and because the way our political system works, and in Europe, the lawmakers wanted to give a win for the people so this seems like an easy win. It’s also the companies that are really kinda at a fence here, a lot of them are giant American companies.
John Jantsch: Yeah.
Ryan Urban: Google and Facebook and it’s kind of a way to, “Hey Trump, hey American companies, hey Google, you have a dominant market share, and Facebook, you have a dominant market share here, and you know what, maybe people have the right to be forgotten, and maybe we’re gonna apply our laws a little differently in Europe than in America, and maybe how they should be.” So, I think it’s a little bit like the big American companies. I think it’s a little bit politicians trying to get a win, and there’s definitely a lot of push back from the consumer side. I don’t think it’s 50 percent of society, and I say probably 15 percent of society believes the Illuminati is real, but there’s a lot of people who do want …
John Jantsch: Yeah.
Ryan Urban: … their privacy respected.
John Jantsch: So, you touched on a point that I think a lot of people are asking.
Ryan Urban: They are real, by the way.
John Jantsch: If I’m a U.S. company, most of my, at least as far as I know, all my business is in the U.S. I mean is this something I even need to worry about?
Ryan Urban: Yeah, well if you’re in the U.S., then your website works in Europe.
John Jantsch: Yeah, right, yeah.
Ryan Urban: And, you wouldn’t say like, “Hey, you know what? Let me black out, let me put ad block or let me put website block on people from Europe, and if someone wants to spend a lot of money and order stuff from Europe, I’m not gonna send it to you.” Of course, you do. So if you want to do business in Europe, whether it’s small, then you gotta respect the laws. This is not Pago Pago, this is Europe. There’s a lot of countries there. So, go respect the laws. And you know what, if you wanna do business in Canada, Canada’s had these policies for a long time.
John Jantsch: Yeah.
Ryan Urban: They’ve had some restrictive ones. You can’t, say in the U.S. if you buy something, that means they have a business relationship with you, and that means they can spam the hell out of you, right? In Canada, if you buy something online, they can’t just opt you into the email list. You can’t pre-check a box. In the U.S. you don’t even have to have a box. In Canada, you not only have to have a box, but someone has to say, “Hey, I wanna opt in.” And you know how you get people to opt in? You let them know the benefits of opting in, and you stick by it. ‘Cause otherwise people opt out. So you gotta come up with what benefits people, and then say, “Oh! Well what would benefit people? How would it make our email program better?” So Canada’s done this for quite a bit. And Europe’s actually following suit.
John Jantsch: Yeah, and…
Ryan Urban: They just didn’t come up with a GDPR name for it. It was just like be a good citizen, and drink maple syrup.
John Jantsch: Yeah, and we’ve had, what we’ve called in the U.S. I think it’s just U.S. canned spam, which doesn’t have near the teeth that it seems that this has, and also, what about enforcement? I mean obviously this is only gonna be as good as if they tried out a couple companies and really spank ’em isn’t it?
Ryan Urban: Well, the enforcement really is not gonna come down to government, ’cause the government’s probably … they know the Internet’s real right now, but they’re quite a bit behind understanding any of this, and if anyone watched the, kinda C-SPAN in Congress, it’s clear they don’t know what even Facebook does, how they make money. They don’t know how the Internets work, so the government enforcing this, that’s never gonna happen. But for people to enforce it, it’s really easy. You can have companies who dominates the email world. You have companies like Gmail, you have Yahoo, there’s still a few people who use Hotmail and AOL, God forbid, and there’s a lot of new providers as well.
Ryan Urban: So it’s really up to them to kind of arm the users, and if Gmail wants to continue to gain market share, then they wanna keep spamming ’em, watching things out. So, I think Gmail’s actually done a really good job. They were one originally and it dropped out, even on mobile had a report spam button. And now they’ve added an unsubscribe button. You don’t even have to go into the email and do it. So they’ve done things like that for a long time and Gmail also kind of innovated where deliverability is based off engagement metrics. So it’s based off how many people are opening and clicking through emails and also how many people are unsubscribing. That will determine your deliverability rates, so they’ve already been the ones enforcing this for quite some time. If you’re opting people in who aren’t on a list, you’re buying lists or you’re sending people who unsubscribe or you’re sending just crap emails. You’re sending two emails a day and no one’s opening it, they’re gonna lower your deliverability and cut you off, which is the right thing to do. They’ve applied a lot of their SDO algorithms and user experience for related items to email.
Ryan Urban: And then Yahoo and Hotmail are gonna follow suit or else they’re gonna lose users. Because too much spam and crap’s getting in the inbox that people don’t want.
John Jantsch: So, I know there’s a lot of hand wringing with businesses everywhere that, particularly that, you know this is a customer of mine. They bought a product. You know we’ve corresponded, you know for years via email. And all the sudden now am I at risk if I am communicating with them even though we have a relationship.
Ryan Urban: In some cases yes. So I think part of it is that the lawmakers don’t fully understand some of the negative effects of it. Like if the policy was that hey [inaudible 00:07:22] and then a whole bunch of people kind of like the emails or like the communication receipts, those people it should be okay to continue to send. But you know what those people, I think the law is also fair in the fact that, hey if you didn’t get the explicit permission right away, if you have a good relationship with them then they should have no problem just replying or no problem kinda re-giving their consent. So, if you’re claiming that someone’s really an active email subscriber, well they should be willing to take four seconds of their life, click their email, click a button.
John Jantsch: Yeah, and I would suggest that there are plenty of businesses out there that you know 85 percent of their list should probably be scrubbed completely.
Ryan Urban: Yeah, and it should. And what I really like about this is we’re a business, we’re really reliant on we do a lot of people-based email so we kind of have always been advocating not only getting consent but why don’t you send the emails to people that actually kinda want to receive.
John Jantsch: Yeah, yeah, yeah, yeah, yeah. And I think that’s probably a good place to start with the benefits of it. I think everybody’s so focused on the “Wait how do I comply? What does this mean? You know how do I do this? How do I not get penalized?” I think that the real point of this is you know what are some ways that you could actually take these practices that are sort of human centric and apply them to the bottom line.
Ryan Urban: Yeah, and so you said we’re a people-based marketing company that’s what it says on our website, but I think what people-based marketing is marketing for people. It’s not marketing to people. It’s what’s a website experience someone wants to have. How do you kind of minimize marketing to the things that people enjoy. So, to answer your question it’s you got to take five big steps back and you say, “Oh, okay, cool well who are the people that really enjoy my communications and what are the communications they actually like receiving? And let me send more of those and less of the stuff they don’t like.”
Ryan Urban: So people are gonna have to now when they’re cutting out a lot of their lists to gain more growth it’s like oh! What’s really working here? Before what was working was just bludgeoning everybody and pushing buttons and saying, “Woo! Let’s do this kinda batch and blast cannon marketing strategy,” and now people are gonna have to use their brains a little bit, and that’s gonna be better for the brand. It’s like, “Oh! You know the thoughtful subject lines the really clever emails, the ones that have great imagery, the ones that are really relevant to people, well it turns out those are the ones that are really effective. So let’s do more of those.” Okay, great let’s do a strategy on that. It’s not just, “Hey let’s push a button and queue up the whole list and send everything to everybody.”
John Jantsch: You know one of the things that is a component of this is maybe re-evaluating your privacy policies and terms and conditions and things like that. To comply, so to speak, with the letter of the law, you really have to say, “Here’s exactly what we’re doing and why we’re doing it and how we’re processing.” And I’ve seen some really brilliant examples of people, you know how privacy policies are just boilerplate legal stuff. I’m seeing people get very creative and almost telling stories around new privacy policies and I wonder if that’s gonna become sort of the standard.
Ryan Urban: There’s also one thing, it’s a … not every action has an equal and opposite reaction, but there’s side effects that are unexpected from things. Here’s one that has nothing to do with GDPR but driverless cars. Those are projected to save a lot of lives, especially when whole cities go fully driverless. It can save millions of lives. But the unintended consequence is the people on the organ transplant lists are going to die and wait a lot longer because nearly all of them, like 75 percent of them come from people who die in car accidents, so that’s the negative repercussion there.
Ryan Urban: When the EU changed their laws around, like I know the EU website which is really annoying. It’s annoying as hell. There’s a little pop up that comes on and says, “Hey this website does cookies.” And it just goes along but doesn’t say what cookies are, and you gotta click okay. What websites have done and companies have done is use that active consent as rights to collect all this data and have that. So like in Europe, because everyone just does default and clicks that button, so all these companies actually actively have consent that the rights they collect so much compared to the U.S. So the unintended consequence of like, “Hey letting people know that you’re collecting cookies,” is, “Hey, you clicked that button so boom! Now I can do anything I want to,” and European websites are more annoying than U.S. websites. So there are some unintended consequences of that. There will definitely be some for GDPR. I don’t expect the lawmakers to make the right adjustments to that. And people will figure out how to take advantage of the loopholes. It’s gonna be business as usual for a lot of those things.
John Jantsch: Yeah, well, that’s true. So one of the offenders that you mentioned is Google analytics. So I would say in the U.S. somewhere in the neighborhood of 85 percent of websites have Google analytics on it. Is that gonna end up getting people in trouble because just the virtue of the fact that it is there collecting data on your website?
Ryan Urban: Google analytics is a phenomenal product and it’s a free product and I like that Google kept it free. I do think Google does because that’s a valuable thing, there’s some data they should be allowed to collect on it as a fair exchange. I think that they do have a paid version, and the paid version they shouldn’t be allowed to collect anything. So I think they should be upfront like, “Hey this is the free version. We’re gonna collect some data and here’s the data we’re gonna collect, and if you don’t like it there’s other ones,” and that way the paid version doesn’t do anything. So I think also Facebook will probably offer the option where, “Hey we’ll respect your privacy and respect your privacy depending on the country you’re in,” and you’ll have the option to a paid version that maybe offers you no ads, though I think Facebook ads are pretty elegant actually. But no ads, doesn’t store any information on you. So I think offering alternatively really important.
Ryan Urban: But you have a choice to use your [inaudible 00:14:16] You can use many alternatives. So I think in some cases Google has a right to do that. I don’t think people actually had an idea that Google’s building graphs and doing all this stuff with this data that wasn’t necessarily intended. Or Facebook is using like buttons to and using Facebook logins to really get and persist a lotta data on users, when that wasn’t the intention of the product.
John Jantsch: So if somebody came to you and said, “Okay. We want to be good practitioners. We want to start doing polite and friendly and maybe more profitable campaigns.” In your mind is there a checklist of things that you need to do, whether you’re adhering to GDPR or just trying to actually be more people friendly?
Ryan Urban: Yeah I mean a lot of it is just gonna come down to email. That’s gonna be, I’d say the main use case of this. I’d reckon that people looking, starting the opposite way [inaudible 00:15:18], so looking at the unsubscribes. So look at all of the people who’ve unsubscribed, and I’d also look to the people that are active openers and who stopped opening. So those are the things I would stop doing. So I like starting with a stop doing list. So look at people who are active openers who are opening once or twice a month then stopped. And what’d you do to change that behavior? Did you increase the email frequency? Did you start sending things that weren’t relevant?
Ryan Urban: What’s interesting is on aggregate, say, we all remember, five, ten years ago companies were sending one or two emails a month, maybe one email a week. And now especially in the U.S. it’s some companies sending two, three, four emails a day. So why did that happen?
Ryan Urban: Well marketers thought they were smart. So this is what marketers did. Say they were sending one email a week, and they said, “You know what? I heard there are some other companies doing two emails a week. Let’s do that this time. Let’s test it. We’ll have one group that gets two emails a week, and we’ll have the other group that gets three emails a week, and we’re gonna look at the revenue.” And sure enough the group that got three emails a week would get more revenue, and it maybe a split test. And they’d do it again and sure enough every time you add another email you’d get more revenue. But what that looks at is if you’re looking at a single send or a weekly basis, that’s short term. And you’re not looking at the bit of the long term.
Ryan Urban: And you know what more people said, “Hey let’s look at the unsubscribe rates. Oh you know what? When we’re sending more emails the unsubscribe rates about staying the same. It stays at just .3. You know what actually sometimes the unsubscribe rate even goes down.” Because you’re burning out so much of your list that you’re burning out the people that unsubscribed, and the people you’re left with are people that don’t even look at their inbox and just ignore all the emails. They have like 58 hundred emails that just sit in their inbox on their iPhone.
Ryan Urban: But people look at the wrong metric they look at the unsubscribe rate. What your ESPs, your market platforms don’t look at or won’t show you is the total amount of unsubscribes. They’ll tell you total revenue, they’ll tell you total number of subscribers you have. They’ll tell you your total list size. They won’t tell you the trending metrics of how many people are unsubscribing or how many people are disengaging. I call it ghost rate. So, that’s when a guy annoys a girl, and she stops answering his texts. So when a marketer annoys one of the customers, they start ghosting you, they stop opening up your texts. They stop responding to you. So the ghost rate is actually part of your true retention rate. And you also have marking as spam. So going back, when the marketers thought they were smart and say, “Hey, we’re testing, we’re sending more emails, and it’s more effective.” That’s looking at a very small window. You’re just looking at a one-send period, one week period.
Ryan Urban: If you look at both of those cohorts now, over a six month period, over a 12 month period, the one where you were getting more revenue in the beginning quickly goes to less revenue because the list is burning out because you have that high ghost rate, you have that high market spam rate, you have a high unsubscribe rate. And also, what the ESP won’t show you ’cause they’re just doing A/B Split test. Now that your engagement is lower, now Gmail is 50 percent of inboxes. So Gmail, everything works on engagement. That engagement rate’s lower your delivery rate’s lower overall. So your deliverability to the inbox.
Ryan Urban: So by practicing bad marketing, you’re really hurting yourself. By doing kinda having a stop doing list, and practicing good marketing, you’re much better off for the long term. You know in the short term, if I were in a store in a mall, say, I don’t care The Gap, right? If I wanted to make more money one day, I would have a sales rep have every single person as soon as they got in the store, “Buy this, buy this, buy this, buy this.” And in that one day I would make more money. And if I A/B Split test that versus another store that didn’t do that, and I looked at the results say, “Hey you know what, if I have a sales rep just attack someone when they come in I’ll make more money.” What will happen? People will stop going to the store. You can’t look over a one day period. And then the people will hate you and not recommend you.
Ryan Urban: So that’s why there’s actually flaws in A/B testing software. It doesn’t necessarily look at the long term. It’s also difficult to track cohorts over time. So I think that’s the way a marketer needs to think. It’s like, “Well, do I enjoy my own emails? Do I wanna get ten emails a week? Do I like all the content I’m sending? And what would I enjoy?” And then you can start saying, “What are the things that I like, and then which are the most effective campaigns for people?” So say if you sent out a blast email to a whole list, why just isolate the people who convert it?
Ryan Urban: Or you can even get a bigger sample size, you can isolate the people who click through that email. And say, “Oh, you know what, what is the category of this email? Oh we’re having a sale in a certain category. Or there’s a new product launched in this other category.” So you mark that say, “Hey who are the people who’re responding to sales in this category? Who are people who’re responding to new product launches? And you know what, cool, that’s how we can start doing this segmentation and making the right cohorts and things.”
John Jantsch: Yeah it is amazing. I mean, I’ve been looking at, we’ve been sending email for a lot of years, and there seem to be people that do certain things consistently and it’s not that hard to identify them.
Ryan Urban: You know what, there’s some people that open up all your emails, and you can send ’em something a little more often. Now that doesn’t mean they wanna get three emails from you a day, but those are the people who like what you’re saying, so you can send a little more to them. And you can also give them the option, say, “Hey, we’re sending three emails a week right now. We have this special insider alpha whatever VIP customer list. Would you like to get six emails a week? We’ll give you some exclusive content, we’ll give you the extra three. Would you like that?” So you could see. What you don’t wanna do is send to the inbox and then burn and then start getting those people that liked you to start ghosting you. So if you can send more and keep the quality, then that’s important. So you don’t want to decrease the quality. That’s really the key. If you have something else that’s important to say, then you can say it.
John Jantsch: So I’m speaking with Ryan Urban, the CEO of Bounce Exchange and we’re, this is May of 2018 when we recorded this and this is kind of the looming start line deadline whatever you want to call it for GDPR, and we’re talking about best practices in being nice to your customers, being nice to your lists.
John Jantsch: So Ryan is there …
Ryan Urban: Marketing for people! Yes!
John Jantsch: Marketing for people. Is there anywhere that you want to share that people should go to find out maybe more about GDPR, but certainly more about what you’re doing at Bounce Exchange?
Ryan Urban: [inaudible 00:21:43] Google GDPR and find out. If you’re a business, it’s not even about GDPR, it’s just start practicing thoughtful minimalist marketing. Start with, what kind of marketing do I enjoy? Do I currently enjoy the things I’m sending out? What are things we like doing as a brand, and start with that. It’s not about GDPR, it’s about marketing for people. And that’s people-based marketing. And BounceX, just go to bouncex.com and download a piece of our content. So we have a great time in people-based marketing. Don’t even request to download just go get some of our content, it’s free. Some cool stuff there.
John Jantsch: Awesome. Well thanks for joining us Ryan and hopefully we will see you out there on the road.
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