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A Kinder, Gentler [And Cheaper] Goodmail?
Nov 6, 2007 2:47 PM , By Ken Magill
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David Atlas, senior vice president of worldwide sales and marketing for Goodmail Systems, knows his company has irritated the crap out of e-mail service providers—the very companies that in hindsight it should have been courting.

Now, the company is apparently out to make things right again.

“Our approach to the channel in 2007 was very heavy handed, and did not take into account the realities of the economics in e-mail marketing,” he said. “This is not the way we are doing business now.”

Goodmail has experienced a dramatic shakeup among its top executives recently. In September, John Ouren left to take a vice president position at online market research technology provider MarketTools.

Ouren had been named co-CEO in July along with company co-founder and CTO Daniel Dreymann when Goodmail’s previous chief executive, Richard Gingras, stepped down.

More recently, Goodmail lost Ken Hirschman, its vice president of business development.

Last week, Goodmail hired Charles Stiles, former postmaster at AOL, to be its vice president of worldwide business development. According to Atlas, the new team has a new approach to the market.

By most accounts, this is probably not a bad idea.

As the Goodmail saga has unfolded during the last two years, some e-mail-service-provider executives have been grumbling behind the scenes because they felt the company was trying to sidestep them by selling directly e-mail senders.

E-mail-service-provider executives have resented what to them looked to be an attempt by Goodmail to cram down their throats CertifiedEmail—where e-mailers pay a small fee to have their messages guaranteed to be delivered with a blue icon certifying them as non-spam, with graphics and links intact.

Atlas conceded during an interview last week that the company may have misjudged the inner workings of the industry.

“We did business with the senders directly not taking into account the realities of the relationships that exist at these ESPs,” he said.

Many e-mail marketers look to their service providers for tactical advice. If Goodmail stands a chance of gaining any real traction, it must have the ESPs on its side.

“When a sender outsources its e-mail marketing program, it’s not outsourcing its sending of mail,” said Atlas. “They’re outsourcing their strategic thinking about their marketing. Goodmail recognizes that in order to work with senders we have to have a working relationship with ESPs … and deals in place that put these ESPs in a position to be able to roll this out to clients.”

Can Goodmail overcome the ill will that apparently exists among those who should be its willing partners? Certainly. It will just take a little time, sources say.

However, the company still must overcome many marketers’ hesitancy to use the product. With that hurdle in mind, Goodmail struck a deal with ESPs Epsilon, CheetahMail and Acxiom Digital in August to offer Certified Email free to the ESPs’ clients through the end of 2008. Atlas said last week that effort is on schedule.

“The key thing I see happening in the next two quarters is a massive increase in the volume of Certified Email and a key driver of that is the ESP channel,” said Atlas.

However, CheetahMail’s clients, for example, reportedly hesitate to employ CertifiedEmail even for free because it may train e-mail recipients to expect Goodmail’s blue icon and senders can’t predict what the effect would be if the icon were then turned off.

Meanwhile, Atlas also said that Goodmail’s original target price of $2.50 per thousand messages for Certified Email was probably unrealistic. As a result, it has been lowered to $1.

“I think in terms of the adoption of Certified Email, let’s be honest, I think we were very aggressive in some areas,” said Atlas. “I think our pricing was aggressive. I think our pricing was based somewhat on pure ROI. The reality is the senders are not ROI based, they’re budget based; they’re objectives based.”

Marketers generally set aside single-digit percentages of their budgets for e-mail. Moreover, the channel returns a whopping $48.56 for every dollar spent on it, according to the latest figures from the Direct Marketing Association.

As a result, he said, Goodmail’s original target price of $2.50 per thousand was “not really workable given the budgets that exist.”

Atlas also said the company has some new products in the works, including a product displaying the United States Postal Service eagle postmark that would have the assurance of delivery offered by Goodmail with the legal authority of the USPS.



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