Email Marketing: Insights from an ESP Owner with Jimmy Kim of Sendlane (Fascinating Insight)

Hey guys, I'm stoked to bring you this episode today. I've got Jimmy Kim, who is the CEO and co-founder of Sunlane. Jimmy, how are you? Good, good. Excited to be on this podcast or show. Yeah man, I'm excited to have you. Would you mind kind of sharing about your background? I feel like in terms of email, you're one of the most interesting people I've ever spoken with and met. I think you're going to be able to share a lot today. Do you mind kind of telling me about your background and kind of what you're doing today? Yeah, absolutely. I mean, in background history of myself, I've been a digital marketer for a little bit over 12 years. Before that, I started off my world in the car business and sales. And then one day, I found a love for email marketing about 12 years ago. And that, you know, I realized that it's the best channel that you can communicate with your customers and actually turn a strong ROI. Now, 12 years ago is a very different story with email. But as it continues to evolutionize, how I ended up becoming, I guess, an ESP owner is very simple. We couldn't find the solution to our problems back in 2013. You know, owning an e-commerce store myself, a retail and physical store in Las Vegas as well too. And then on top of that, also having another content creation company, we couldn't find products that actually did what we needed to do until we ended up at these really high-level, high-tier products that had all the levers and switches that we wanted to flick, right? Because we understood email more than the daily normal consumer. And it was generating 80%, 90% of our monthly revenue through email. So, like, it was so important, we had to go and figure it out. And so back in 2013, we went set off to adventure to figure out how to do this for ourselves. And that's kind of how our story started and where, you know, our love for email started to really come out. And, you know, it's been an interesting journey because even the first four years of this company wasn't really a company. I mean, four years ago, if we look at 2017, we had like two or three people in the company. And then, like, they were just doing customer support. And then we had our engineering team that, you know, that we were just building up. We had, like, one or two engineers. And, you know, I think it's been interesting to kind of see that. And then in late 2017 is when I, like, exited my e-commerce company, exited my other company and decided that I wanted to put both feet into this company. And we just entered the e-commerce space officially, like, being like, hey, we're going to just focus purely on e-commerce in 2019. So we're relatively fresh to this game, but we're not fresh to the e-commerce game at all from my personal experience. And then, of course, e-mail marketing, absolutely. And especially in deliverability and understanding, look, we can have all the best tools in the world. We have all the best everything in the world. But if you can't get that e-mail to the inbox, it means nothing. And so, you know, that's where we've kind of been our specialty. And then, you know, when we look at ourselves, we're very friendly in the way that we think about things. We don't care what you're selling as long as you're selling something to an audience that cares. So it could be the adult sex shop stuff. It can be the CBD or the cannabis stuff. You know, the great things that other ESPs are like, I don't want to deal with the compliance. We're cool. And the number one reason why is because we actually own our own infrastructure. So it's really hard for us to kick ourselves off of our own infrastructure where you're laying on a third party, like some of our other competitors out there where they're using a third party service. Well, they're at the mercy of their terms of service, not their, not the company's terms of service. And that's what the big key is that you got to understand is it's a lot of those decisions aren't coming from that company. They're coming from somewhere else. So it's kind of my background. You know, today we're in San Diego, California. That's where we're headquartered. The entire team is here. We are now, I say this now because we're growing so fast. We're, I want to say we're 39 people now with five or six more people joining on deck next month. So we've actually doubled team size through COVID. So, you know, being in the right place with being able to help our merchants really grow has been, you know, powerful to kind of watch them expand and grow as fast as they can. And, you know, every e-commerce brand on our platform actually has pretty much exploded in the last six months because of the shift of buying cycles have changed so much with everybody as well too. And even the email addresses, I mean, we're starting to see even new email addresses and different things come into our system and the data has been really cool. So, yeah, hopefully I gave you a little bit of a background of myself. Yeah, man, that's awesome. Before we kind of dive into like the meat of this presentation, one last question I have. So a lot of the fact that you guys are kind of accepting of all industries, I know CBD brands, cannabis brands, other brands really need a great home. So anyone that's listening and has been kicked off platforms, please check out Jimmy and Sunlane and what they're doing. One last question I have though is if you had to categorize in terms of a range, like what size are the brands kind of using your platform? Are they 100K to a million? Are they a million to 50 million? Like how do you think about the size of the brands you do? Sure. Our businesses range right now somewhere around $500,000 a year to about 50 million. We've got a couple outliers at $100 million right now, but $50 million. We definitely have great enterprise, great software. So it allows you to kind of scale with us. So we are pretty wide open, but what we like to say is where our core enablement really comes into with our deep data integration with obviously Shopify, WooCommerce. And then we have two other like non-mainstream companies. Well, we have ClickBank, which is a digital mainstream company. So we integrate with them at a deep data. And then also we do another company here locally in San Diego called Miva Merchant that we also integrate with as well too. And, you know, it's very interesting to kind of see that. But those are our four core platforms. If you integrate with those and you're using them to sell, most likely you're a great customer for us because, I mean, who doesn't want 100 points of data the moment you integrate to our platform? That's awesome. That's sweet. Well, I'm excited to dive in. I'm going to let you kind of take over and screen share, but at a high level we're going to be kind of talking about like what the mind of an ESP looks like, for lack of a better way to describe it, right? Kind of the things that you guys are looking at, kind of the things that you guys spit out. Is that correct? Or how would you best explain kind of the- Yeah, we call this the insights from an ESP. And the way that I look at it is very simple. I think a lot of people think about everything from subject lines and one to send and one to do, but what you're not thinking about is how does the other side, how does deliverability metrics and how does that information really translate to really understanding it? And even down to the things that you may have experienced, everyone's experienced a frozen account at one point in life in an ESP at one time. And if you haven't yet, then you're coming to it as well too. But if you actually understand what's actually the thought process on our side, it's going to really help you understand it. So there's two things that I'll go over on here is really just understanding the data side and then really another part I'd say is the top five reasons that you'll get yourself into trouble with an ESP. And that's what I'm going to expose here today. And this is definitely insider stuff that you probably won't ever hear anywhere else because most companies won't share this information. But we're cool with it because we're transparent as a company and we want everyone to be better. We don't care if you're just using our service or not. It's about being better as a business and being better for email and hoping that email will continue the longevity that we anticipate as it's becoming the main channel medium. I know there's a thousand other ones we can talk about as well too, but let's face it, email is still always going to be the number one channel of revenue for most users. So I will put my screen on here. Let me first move you over here so that I don't kill the time on this. One second here. All right, cool. Google doesn't really love me right now. All right, there we go. Chase, there we go. And share. All right. So we've got a little pretty slide deck that I've built up for you guys to kind of talk about that. So this is insights from an ESP, data deliverability and best practices. And we'll just jump right into it. And so we start off with something really interesting. And I really want people to understand that there's two different separate sections of how triggers and data review is really looked at. And we'll go into the metrics in a second as well too. And some of these are not things you'll really understand, but other parts we'll go over. So we'll kind of just start off on the left side here and just kind of drag down here and kind of show each and every piece of that as well too. And I've got my little fancy pointer up so you can see where I'm talking about the entire time. So let's talk about the data triggers that we use. So this is where the computer, the system, is going to trigger data points. And this is what happens when we actually go through it. So let's talk about open rates. We all know what an open rate is. When people open your email, it triggers through a pixel generally and tells the service that someone's opened the email. Now, there's two different numbers. There are unique and raw number. And that's actually important. People don't realize that there's an importance behind it because the unique is important because it's identifying unique people. But raw is also a very important metric because raw tells us and identifies weird things like bots and malicious users and anonymous services and all sorts of weird things that can happen with that. And then secondly, you can also see a viral aspect happen with raw too. If you see a product or a brand that has a lot more virality behind it, a lot of times these emails get forwarded and pushed around a lot. And that happens as well too. So it is important to look at that raw number. There should be a number metric, a 10%, 20% metric over your unique on purpose because that raw number is actually really telling you how many people saw it or repeated saw it. Just like every other thing, it requires multiple touches to get someone to convert. So when you're thinking about that, that's why we look at those numbers uniquely as well too. Same thing with click-through ratio, right? Click-through ratio tells us how good and relevant that content is and how you're speaking to your audience. And it gives us a better understanding of what that's happening, right? Unsubscribes. Unsubscribes are huge actually. Unsubscribes, there's two pieces to it. There's UTA and there's unsubscribe. So unsubscribe is the number of people who are leaving your list because they don't want to hear your emails. What's even bigger is the UTA action, right? UTA ratio. What we call that is UTA. It's unsubscribe to action ratio. And what that's saying is how many people are clicking on your unsubscribe page and then actually unsubscribing and those who are just checking it out and leaving. And this is where it's really important to make sure that you have a very nice custom unsubscribe page where someone can go on there and actually understand who you are, who your brand is, maybe links, maybe images, really being able to kind of teach people that that's important because that's your last line of defense before they say bye, right? And then there's the spam complaints. Now, spam complaints are really weird. And I know people will look at it and be like, ah, you know, I've got 100,000 lists. I've got four spam complaints. Not a big deal. But the way we look at it, it's not about the overall spectrum of it because not everybody reports back on spam complaints. So Gmail, the number one provider out there of free email addresses and consumers, they don't report back on spam complaints directly on a one-on-one level like Yahoo or anything Verizon, of course, Yahoo, AOL, Verizon or Hotmail or any of the other brands do, right? They all spit back actual unsubscribed numbers and tell you exactly who, not unsubscribed, complaint numbers and tell you exactly who complained and exactly what happened, where Gmail is more vague. Oh, there was a percentage of unsubscribed complaints. We're not going to tell you who, right? So using that number, we break it down by TLD, which is top level domain, which is at Yahoo, at Gmail, at, you know, wherever it is. And we split those down and we look at those deep metrics. So when we say you can't have a spam complaint rate of more than 0.01%, for example, you don't actually mean 0.01% of the entire send. We actually break it down at the TLD level because, again, people at Yahoo and Hotmail and Verizon products are going to be much more different reacting than someone on Gmail where they might just move you to junk and since it's behavioral based, that doesn't affect the entire spectrum. It only affects that one user, right? So that's kind of how we look at spam complaints. And, again, I'll talk about metrics in a second here. And then we've got bounces. Bounces are also important to understand too. A bounce, there's two types of bounces. There's a soft bounce and there's a hard bounce. A soft bounce is something where someone has, like, out of office, mailbox is full, it's slow delivery because they're using a custom dedicated box and it's just slow to get the email and whatever the delay may be, those can be called soft bounces. And those will get continued to deliver, but they'll still kind of trigger as a bounce for now. And then there's a second one, which is a hard bounce, which is invalid emails, spam complaints, complainers, things that are just bad, right? And that's also the secondary bounce. And we look at those metrics as well too because it's really important to understand why your emails are not getting over, not only as a deliverability aspect, but also when you're as an ESP, you're on the other end of the spectrum and you're like, well, why are they bouncing so much? Because bounces only happen because you're getting bad email addresses, you're either doing that or you're sending irrelevant content and a lot of people complain that they're blocking you or your domain reputation, you might be doing something shady. I mean, there's so many things that come into place, right? And then last but not least is the UTA ratio, which I talked about earlier, but that's one of those ratios that you'll never even think about or hear about. But we want to know how many people are clicking on that unsubscribe page and actually taking action behind it because that action is telling us how much people are actually like either confused by your brand and have no idea who you are or secondary, maybe the content was disturbing, who knows what it was, right? But that's it. Now we'll go into that. Then if any of these things, again, we have those metrics I'm going to show you, but when any of those things trigger off things, this is how we start to look at your account and we start really much on the top level, which is domain reputation. One of the things that has really changed dynamically in email in the last 12 years has been like this. It started off much more on IP reputation, it's shifted into domain reputation. I would say if I was putting a fair number out there, I would say your IP from the SMTP provider you're using, meaning like if you're using like us or one of our competitors or SendGrid or anything like that, is it starts on IP. And I would say nowadays 30% to 40% of your reputation is laid on your actual IP now. Your domain reputation, in my opinion now, and what we're seeing on the marketplace is actually about 50% of how much you're going to be able to inbox. And then about 20% of that is about content and what's inside of that. And we're going to touch on all that in just a second. And then we've got sender names. That's like, hey, is it a clear, identical sender name? Are you trying to trick people or just trying to do things there? We've got sender can spam address. Is the address real? We'll Google Maps an address and say, is that a real address or is this some random made up address as well too? Your subject line, obviously we're looking at the content again. Is it misleading in the content? And then we look at even your links and your final destination places as well too. And then even down to your sending hack. So we analyze it one, two. One, this triggers on the left side where this data trigger will trigger this. And then this is what the human aspect is, how we determine if we need to either freeze an account, kick an account, or we need to reach out to the client and say, hey, guys, we know you're doing great, but can't do this. And so we try to figure out what it is and we make our actionable steps behind it. Now, let's start with that data because I think those data are really important points here because you should be thinking about it. Now, remember this is not a – these are metrics to get triggered. These are not metrics that you should achieve. These are metrics you get triggered. So I want to be clear here. You don't want to hit these metrics and be below them because if you're below them, that's going to trigger something. So you want to be above these metrics. Open rate, right? Let's face the facts of life right now. So 10% should be your minimum. If you're doing lower than 10% open rate, you've got a serious problem going on here. And we've got to figure that out together. It may be generally 98% of the time it's an age list. That's just basically you're not doing good hygiene on your list. But there's other reasons that it can happen as well, too, as well. So then click-through rate. Now, I know the click-through rate is dependent on the content that you have. It's just when things are flagging us where they'll go up too high or come down too low. That's where we're kind of looking for the jumps that are kind of happening between things. Your click-through rates generally are average, increasing, decreasing. They don't go one day from 2.5% and go to 25% the next day. That generally never happens. So that might trigger something and put a flag up. Spam complaints, I already talked about this. 0.1% is our metric. We're breaking it down into TLDs and looking at it as Yahoo, how many spam complaints, how many do a little over, how many spam complaints we get. That's our metric, not how much did you send in the entire spectrum and that little metric, right? Balances, again, the same thing. 2% based on TLD, not based on the entire spectrum of it. And this is really important. You'll hear me say this a lot. It's not about your entire, like, outside. It's about those four little metrics that come into place, right? And that's 2% that we're looking for or less than. And 2%, we want to be – if you go over 2% in a balance, we're going to flag the heck out of you. And then we've got UTA, which is unsubscribed plus complaint. That's the math real quick. Unsubscribed plus complaints divided by unsubscribed complaints plus clicks, right? It needs to be less than 30%. If it's over 30%, we are flagging you as well, too, because that means that over 30% of the people who said, who is this person? I don't know. I better un-hit, manage, or unsubscribe, right? Then they went and actually finished the completion of the product, which tells me that these people really didn't want to hear. And I get it, right? You've got 10 unsubscribes. We're not going to care about the numbers. We're talking about larger lists here. When you've got a million lists behind you sending a million contacts, you know, you're going to see 500, 700 unsubscribes, 1,000 unsubscribes. That's normal because that's what's supposed to happen. But the beauty of it is we also have to understand how that metric is playing into the entire ecosystem of things. So that's data reviews, and those are the actual metrics that will trigger things. So just to recap real quick, open rates, they need to be above 10%. Click-through rates, you know, we think about, like, you know, average is 2.5. We're more thinking about spikes up and down. Spam complaints breaks down at TLD level. It needs to be less than 0.1%. Balances, again, TLD level, less than 2%. And then, of course, and these are things that you should be at. And then UTA, you need to be less than 30%. If you're over it, that's going to flag a lot of triggers as well for us as well. So then let's talk about that human review. What's that human review going to look like, you know? Is it clear? Is it identifiable? You know, is the canned spam address, is it real? Is the email address related to a brand? Is there a website behind that email address? Subject line, is it clear? Is it misleading? Is the content duplicate? Is it misleading as well too? What's going on with that link? Do they have weird trackers in there? Do they have rotators? Do they go to a lot of places? Is it congruent to the email itself? And then how often is the sender sending as well too? That is something that definitely is a trigger as well too, especially if you're doing improper segmentation or you don't actually understand what you're doing with the email marketing. This can happen. And generally, it's not happening on purpose. People just don't understand that sometimes when you build a segment, there's overlap that can occur. You've got to make sure that your segment is against your segment, right? So that's kind of the thought process on the human review side. All right. So let me just dive into the top five reasons that you'll get into trouble with your ESP. So here's the five. Metrics, identity, snowshoe spamming, content, and abusive excessive sending. Okay? Let's break into each one of those real quick. First things first, metrics. We already talked about those. Those metrics can cause you all sorts of problems. I'm not going to touch on that again. I know we just spent the last 10 minutes going through that. Second thing, identity. Too many people think and think that, oh, you know what? If I do something really tricky, they might not know who I am, and it's going to make sure that they open the email, right? So identity is actually a big problem, and people do this more and more, I've noticed, because they've started to realize this works. Now, what's funny about this is I laugh. In 2008, we discovered this, thought this was the most incredible, mind-blowing way of doing things. We later learned that's called spamming. But what we learned then, and now we're going full circle again, and people are starting to pick up on these things and go, oh, man, I need to change things to, like, trick people so if I sell sunglasses, I want to call myself Sunglasses and not say I'm Jimmy at Sunglasses.com, for example. You know, like, whatever it may be. So I put together some examples here of identity, the good being something like Jimmy Kim or Jimmy at Sen Lane or Sen Lane or Caitlyn at Sen Lane, someone who's clearly identifying who they are, where, you know, it's okay if you're just using a fun first name or something really simple, and that's okay, as long as you're being consistent around there. But the bad is things like when you just say, like, service or account or your shoe, I use that as a joke, but people do some weird, funny things like that as well, too. So that is considered bad and actually not can-spam compliant as well either. So that's important to understand. The next thing is called snowshoe spamming. This is another thing that's come into this world, especially because people are starting to realize that you can actually go in there and let's just say you have an email address like john at john.com and you've been sending from it and it's been doing good, but then I was like, well, let me go spin up paul at paul.com because, you know, this is a fictitious email address and maybe I'm doing a DBA or whatever I want to call it, but I know that if I am sending here and I send here with Paul, I'm going to see a spike happen really fast on my thing. But what you'll see happen behind that is the fast decline that happens behind it and then people start getting into this weird habit of changing the email. So snowshoe spamming is actually identified by spam hosts as the use of fictitious business names, fake names or identities, and they're using it to be anonymous or to trick the ISPs from thinking that this is a new email and it's undetectable, right? That's a spam trick. This will get you on a spam house list. This will get yourself blacklisted and probably get you kicked off the ESP as well too. So please don't do it. It's something that people are starting to discover, especially e-commerce world being a little bit newer to the email world where there has been a world in slow spammers for years since email came out. This is becoming new even though this is very old as well too. It's just something that people are learning to do as well. The next thing is I say stop copying and pasting. There's nothing worse than that duplicate content that you're using out there and people are starting to do this thing where they're like, oh, this brand is doing something really cool and I'm sure Chase, you see this all the time. This brand is doing something. Let me just copy literally almost verbatim onto my page and just go send it out. God, I can't do that anymore. People want to have branding behind. They need to be modifying it. So I like to say this, and this relates to those who are doing a little bit more performance marketing, which means that you may be layering it with some kind of referral partnership stuff, but a lot of times if you have a partnership, you'll end up getting an email and they're like, send this email. And you're like, yeah, that email looks great. I'll just send it off. But what we're seeing is that is causing problems for people because content is starting to be abused. So make sure your content is relevant and fresh when you're thinking about it. And then secondary to that is stock images. Got to stop the stock images. Stock images are pretty. Go modify. Make it look different. Add some wording over. Do something to really modify it because what happens if you're in Gmail, for example, and you're sending to a Gmail audience, you send an email out. Gmail is actually using their image algorithm, checking against it, seeing if it's a stock image or a unique image, and then identifying that as something that might happen. Now what happens is, and it's not your fault most of the time, but let's just say you take a stock image. What happens is that stock image gets flagged by Google because some spammer used that same image somewhere else in the world and basically made that image considered spam. And so your email deliverability drops. All of a sudden your reputation score drops because your image is tracked internally and matched. As crazy as this sounds, this is what's happening right now in the world right now because of the amount of imagery that's being used. So stock images are cool. Just make sure that you make them your own, even just cropping them, modifying, adding some words. Just add enough that makes Google or any of these ISPs, mostly Google, by the way, know that it's something different. And last but not least, abusive sending habits to the same contact. And this is where things start getting really, really just gray a little bit because we're looking at you and saying, all right, well, how are you actually sending? And yeah, you're paying for send and all that stuff. I get it. But realistically, there is a level of abuse that comes with it. So I wrote down a couple metrics here. Send every couple days to the same contact. Great. No problem. Send once a day. You're still cool. Start sending twice a day. We're starting to watch you, and then you start sending three times a day. We've got a microscope on you, and we want to know what the heck you're doing. So it's easy to understand that there's reasons to mail stuff. So you're launching a brand-new product, and you want to hype them up and do an event marketing and prelaunch them and get them hyped up, tease them and hit them. We get it. We're not going to stop you. We love it, right? We want you to do your marketing. But when you just start doing it as a habitual thing because you realize if you send three emails a day, you're going to make more money than if you send one email a day, well, let's face it, that's going to be the truth in most cases, at least initially, until you burn your customers out. Well, that's what we want to stop you from getting to where you burn your customers out. We're going to lose trust in us. We're going to lose trust in you. And ultimately, we're probably going to have to part with you. So it's easy to understand there's multiple reasons, but use segmentation and share to those who want to hear. Obviously, we all know that, but we want to make sure that you get that. So that's it right there. Those are your five steps, and thank you for this time here. You know, if you want a copy, I always put it up there, jk.senley.com, if you ever want a copy of this presentation, I've got it here. There's my Skype address as well, too. And Chase, that's it, man. That's my presentation there. And, you know, I try to keep it concise to make sure that there is a lot in there as well, too. So, yeah. And this is fascinating, right? These are all the things I wish I knew a couple of years ago. I've been kicked off more platforms than I'd like to admit, right? So this is fantastic. You also, I know, obviously, we're connected on Twitter. What's your Twitter handle? I feel like you're somewhat active there. I'm much more of a lurker than a poster. My Twitter handle is realjimmykim. So it's R-E-A-L jimmykim. I picked this a long time ago because I had a really generic name, and that was the only way to do it. But, yeah, I'm realjimmykim on there. I'm much more of a lurker, but I do respond to DMs and communications all the time, but I don't post that often. I'm the weird social guy that lurks but doesn't post very often. That's just me. That's fair enough. I know a lot of people listening are Twitter people, so I wanted to give you the plug. Jimmy, before we let you go, anything else you want to mention? I know you obviously gave us a ton. It's all good if not, but anything else? Are we good? No, we're good. I think there's a lot to consume here. And, you know, again, as I said, if anyone wants a deck so that they can kind of consume it themselves, please reach out. I'm happy to send you that deck. And, you know, obviously no strings attached. I'm not going to ask you for a demo or anything. Don't worry. I'm just purely going to send you that deck and let you do it, what you will with that as well, too. But, yeah, I mean, I think the evolutionary change, I think you're doing a great thing in the world right now and teaching a lot of great people about email marketing. You know, I look at you as someone I was doing this stuff back in 2015. I was educating content creators on how to do email. I had a course that I put 40,000 people through back in 2015 about building their email list as a content creator and so forth. So, you know, this is a good service. And, you know, listening to this stuff is how you become better, which you just said, you know, if I had this stuff five years ago, I wouldn't have got kicked off a ton of ESPs. Well, me, back in 2013, I was getting kicked off. I wish I knew this stuff back then, too. And the crazy part of email is that, foundationally, it's shifting and adjusting, but it's still the same thing at the end of the day. You're still communicating. You've just got to start. People are just getting too lazy sometimes, and it's all about not being lazy and always being fresh and creative. So that's all I had to share here, but excited to be here. And thank you again for letting me share it to your audience. Of course, Jimmy. Thank you so much. All right, cheers.