Jim Collins famous “hedgehog” concept proposed that great businesses were greater still because of their profound focus, doing one thing better in their marketplace than anyone else. Recently, a number of service companies have taken a not so obvious way to become better at their core business and that’s by operating businesses in other areas. Stay with me as I explain this emerging trend and ultimately introduce you to Tom Klein, the CMO of MailChimp.
One example of this trend comes from the digital agency Huge, which operates a coffee shop in their Atlanta office. Undoubtedly this helps them understand the challenges of brick & mortar retail and the role of digital in driving store traffic and increasing loyalty. Closer to home, Renegade acquired the popular blog Social Media Explorer to give us laboratory for testing content marketing approaches. In the two months since this acquisition, we’ve already run multiple tests that have significant increased our advisory and executional capabilities in the content space.
A far more interesting example comes from Tom Klein who in our interview below explains among other things how MailChimp is getting better at their main service, email, by operating an online store of their own. By reporting on the progress of this business with complete transparency, MailChimp also turned this store into a goldmine of interesting, empathetic and informative content for their target. Now that’s renegade thinking at its finest!
Drew: What were your top priorities when you came into your role as CMO?
Tom: No matter what, our responsibility is to grow the business without compromising our principles. When I started working at MailChimp, one of the most fascinating things to me was the fact that it’s a B2B business that actually has a brand. MailChimp has a level of emotional appeal and emotional connection with customers that most B2B brands do not.
Drew: How is MailChimp able to stimulate an emotional connection with customers in a way that B2B brands traditionally do not?
Tom: We’re humble, and that’s very important for our connection with our customers. In many ways, we’re communicating with people like you or your company. We appeal to a very challenging audience: people who are very skilled in design, creativity or marketing. So, we try to model our behavior after the level of creative courage that we would like to inspire in our customers. I think that’s really how we appeal to them without being “salesy,” so to speak.
Drew: How does courage permeate you or your brand activities?
Tom: I use the word courage because confidence doesn’t seem like enough when it comes to really putting yourself out there. It describes how we need to be, because we are, in many ways, a model for our customers. As a company, we should feel free to be more human, more personal, weirder, and more original, because ultimately, differentiation is the name of the game.
Drew: It’s interesting that there’s this trend in the agency business to develop products around products. MailChimp is doing this with an in-house venture, correct?
Tom: Yes, the store is called Freddie & Co. and the email series, which is essentially a behind-the-scene series, is called “What’s in Store?” We knew we had a very creative culture so we decided to tap into it. We had an employee who was exceptionally brilliant, had a lot to say, and was also in charge of our email newsletter, so we had her head up a new ecommerce operation – even though she had no knowledge of ecommerce. The idea was that she would chronicle all the things that went wrong in the “What’s in Store?” series – it certainly has helped us recognize some key pieces of information, like shipments aren’t always correct and the design isn’t always perfect. It’s the problem that creates the drama, which results in the understanding that we’re after.
Drew: How do you measure brand love and assess if the things that you’ve done are making a difference in nurturing this love?
Tom: We run brand health and equity studies to get a sense of how we are doing. We evaluate brand equity by looking at unaided awareness, aided awareness, and preference. Unlike other B2B brands, we also look at it on a quarterly basis because we like to understand the impact of our brand-oriented or inspirational marketing messaging. We also look at net promoter score.
Drew: Tell me a bit about your marketing.
Tom: We are a “freemium” product, so we need to have lots of different flavors of marketing. First and foremost, we want people to get to know MailChimp, which may take form in a few different ways – sponsoring design conferences or podcasts like Serial, for example. When customers decide they want to try MailChimp and sign up for a free account, there’s a follow-up email teaching you how to use the product. Another thing that we look at is the number of new visitors that typed MailChimp.com into the browser – they’re not just searching email marketing and then finding us; they’re typing MailChimp and then coming to us as a preference.
Drew: Do you drink your own champagne? In other words, is email marketing is a big part of your own marketing. Is that true?
Tom: Absolutely. We sent 36 million marketing emails in June of this year to a wide range of subscriber lists, like “What’s in Store,” which has 170,000 subscribers alone.
Drew: If you’re doing 36 million emails in a month, clearly you have a lot of data on what’s working and what’s not. What should your customers be doing to make their email marketing operations successful?
Tom: Testing and learning. It sounds really boring, but it’s very straightforward and valuable. In our free products, we have AB testing, and in the Pro offering, we have multivariate. I have to say, from a brand perspective, it’s very easy to set up multivariate tests and we run them within our marketing department. That being said, we also want our customers to feel liberated from a creative perspective. Often, people feel like they have to do exactly what everyone else does, but using the multivariate tool, you can test many options to find the winner. That’s probably the most straightforward thing that we would love to get our customers doing, because we know it works.
Drew: What kinds of multivariate testing does MailChimp support?
Tom: We support three styles of multivariate testing. One method, for example, allows you to take a list and divide it into a few different subsets – for a list of 10,000, you could do five different emails send them to 2,000 people. Then, you can just look at the results and learn for next time.
Drew: From your experience, are bigger brands approaching email differently?
Tom: I think that’s an intriguing notion. Most of our customers probably have fewer than 200 employees. I have friends who work in marketing for package food companies – these are brands that have over a billion-dollar budget – and they don’t know who their customers are. As you know, email has always been a great way to communicate directly with consumers in an economical way. If one of these companies wanted to communicate with 5 million people, we have customer lists of that size. Surprisingly, there are many large package food companies who just don’t do it. I think doing that is an important first step and next would be optimization.
Drew: Is there a lag effect with email? I know I’m always behind but I tend to only delete or file the stuff I read or know I never need to look at?
Tom: People often look at their email as a data repository of stuff. That is to say, it’s almost always beneficial for your email to be in your customer or prospect’s inbox, because they will use it even if they don’t open it and engage with it right away.
Drew: What is state of the art when it comes to integrating social media within email campaigns?
Tom: Email is a kind of beast, from a technical perspective. We would love for your email client to function just like a regular browser window, allowing us do all sorts of magical things. Unfortunately that’s not the case, so if you’re our customer, we tend to keep your email relatively straightforward. As it relates to social itself, we have a lot of functionalities that actually let customers use their email as a social channel. For example, we have a nice integration with Facebook that lets you post your email on Facebook. Customers can also use their email subscriber list as a way to take these subscribers and generate an ad based on them.
Drew: In your time as CMO, are there things that you wish you did better?
Tom: Probably almost everything. We’re growing and hiring so we’re really looking to improve all aspects of the company. More specifically, we have a lot of customers that are agencies, and I feel like we could do a better job supporting those types of clients. We also want to get better at engaging with our customers around the world – MailChimp is a global business, even though we’re based in Atlanta.