KEY POINTS:
Jeff Mann would like to get one thing straight: his email marketing company doesn't do spam.
What it does do is manage permission-based bulk emails. And as he patiently points out, spam, or unsolicited email, has been illegal since legislation made it so in 2007.
In the past decade email marketing has moved from being a quirky new technology to a mainstream communication channel. Set up in 2001, Auckland-based Jericho Creative was among the first local companies to introduce and specialise in the technology, developing a software program called SmartMail that automates the sending of bulk emails.
The more than 600 customers on its books include Telecom, Ezi-Buy and FlyBuys, plus several customers in Britain and Australia.
The company has invested heavily in new technology, and for the past two years has spent about $500,000 on R&D. The investment has paid off: Jericho is a finalist in the BDO Spicers under-$5 million category in the Vero Excellence in Business Support Awards, and won the supreme award at the 2007 IBM and Fairfax Annual Business Partner Awards.
MetService signed up with Jericho to boost its website traffic and to introduce something that would keep MetService top-of-mind, says consumer market development manager Nicola Burroughs.
Snow seekers can now sign up for weekly forecasts and email alerts on conditions at their favourite mountains, and MetService is about to introduce a monthly "seasonal report" for the agricultural sector. The figures speak for themselves, says Burroughs.
More than 40 per cent of people receiving the emails open them and the average click-through rate is 20 per cent. Mann compares these results with industry standards of a 22 per cent opening rate and 4 per cent click-through.
In the past three years Jericho has gone from eight staff to 25 and Mann emphasises its success is due to his team, who are involved in all strategic decisions.
Of the original founders, Mann, business development and strategy manager Roanne Parker and creative director Andrew Kay are still involved, but technical project manager Matt McLean sold out several years ago.
Despite the current economic malaise, Mann is positive about the coming year, expecting 25 per cent growth. (He won't give exact turnover figures, pointing only to the fact that the company is in the Vero awards' under-$5 million category.)
While marketers have been more "indecisive" recently, companies are looking to spend less on communications with greater returns. "Clients can have big ad agencies with big budgets spending half a million each year then come to us; it's one-tenth of that budget and we blow their results out of the water."
What has helped boost business is the company's investment in on-demand bandwidth capacity. Increased demand meant the company's previous infrastructure provider's off-the-shelf solution was not coping with growth. In 2007 Jericho teamed up with IBM reseller Integral Solutions to implement an on-demand model which Mann describes as like having a virtual server.
Rather than own or lease computer hardware, Jericho now pays for as much processing power as it needs to cope with customer demand, and can add capacity almost as easily as turning on a tap.
The company was one of the first - and smallest - in New Zealand to roll out the new technology and, as well as winning the IBM award, was able to attract customers whose combined email volumes run to millions of messages a month, such as FlyBuys, Ezi-Buy, Air New Zealand Holidays and Telecom.
It hasn't all been smooth sailing. Mann, a former direct marketer and publisher of Rugby News and New Zealand Adventure magazines, set up the company with three acquaintances from their own funds in the wake of the tech bubble.
It took three years to make a profit but the biggest hurdle was educating the market on how to use the new tool.
Early on, Jericho developed a division that catered for website design, marketing campaigns, and personalising and updating databases. It also established and still tutors a practical email marketing course for the Marketing Association.
The company also faces a mind-boggling array of technical challenges.
Its software has to comply not only with legislation in New Zealand but also with that of every country to which the emails are delivered. In 2007, when United States web giant Yahoo partnered with New Zealand's largest ISP, Telecom's Xtra, Jericho had to ensure it was on top of Yahoo's own firewall and filtering protocols and processes as well as the different US and later the New Zealand anti-spam laws.
Each ISP uses its own protocols and processes and, to keep up the fight against spam, some change these monthly, weekly and, in some cases, daily.
Jericho spent two years working on submissions for New Zealand's own anti-spam legislation, eventually creating the Marketing Association's E-Marketing Network's official response to it.
Mann says the legislation had no effect on Jericho's practices since it had developed industry best-practice guidelines for the education courses and worked by them itself. Some of the rules introduced were that companies cannot harvest email addresses, and the sender's address must be registered and accurate.
So, what's the secret to ensuring people open rather than delete marketing emails? Mann prefers not to generalise but says as well as getting permission - for example, the customer subscribing to the service - key factors include the size and placement of images and text, and including only relevant information.
Email marketing works best by building loyalty, he says.
"If you send an email to someone with your brand on it and they don't know who you are, you just annoy them and damage your brand. Get the relationship going and then deliver the information."
If it finds the right partner to work with, the company plans to set up an office in Australia, Britain or the US in the next 12-18 months.
Mann will be hoping a new office will replicate the cheerful atmosphere of the Ponsonby office where staff enjoy regular fruit deliveries, mobile massages, paintball days, quiz nights, and summer barbecues on the large deck.
Jericho Creative
What it does: Email marketing and web design.
Set up: 2001.
Customers: 600, including Telecom, Ezi-Buy, MetService and FlyBuys.
Staff: 25.
Outlook: Predicts 25 per cent growth in the year ahead.
