On December 10, 2020, the rental housing marketplace Airbnb completed its initial public offering at a $47 billion valuation — one of the largest IPOs of the year. No less than 24 hours later, the company’s market cap shot north of $100 billion. Both were incredible milestones for a platform that, by design, predominantly just facilitates transactions — it owns virtually none of the services it helps its suppliers provide.
The success of Airbnb is not without precedent. Over the past 20 years, industries have been redefined by marketplace giants like eBay, Amazon, Uber, and Udemy that have upended the way we shop, travel, eat, work, and learn. But at the same time, even the most successful marketplace businesses don’t reach transformative scale. The question is: What are industry-changing marketplaces doing that others aren’t — and can those practices be replicated?
Clay Christensen’s seminal theory of disruptive innovation offers guidance. While many marketplace businesses simply organize and facilitate transactions among current market participants, disruptive marketplaces create new types of transactions that draw in buyers or sellers (or both) who weren’t already participating in the market.
For managers, entrepreneurs, and investors who are looking for the next disruptive marketplace opportunity, it’s essential to understand how these novel transactions can be identified and created. In this article, we provide a guide.
Disruption Meets Marketplaces
Many markets don’t work well. The costs of accessing the market and/or identifying and communicating with potential transaction partners can limit who participates or make it hard for participants to transact with each other. Asymmetric information about sellers’ offerings or buyers’ needs, meanwhile, can make parties less willing to transact, lest they end up being taken advantage of. Under such market failures, there are opportunities for beneficial exchange that are inevitably overlooked. Marketplaces address these problems by providing rules and infrastructure that facilitate and improve transactions, and mitigate market failures — creating value in the process.
But when is a marketplace disruptive?
A disruptive innovation underperforms on traditional measures that current market participants value, but is “good enough” for a different set of prospective consumers who value affordability, accessibility, and convenience. Disruptive innovations thus target those who were previously left out of existing markets — people Christensen referred to as nonconsumers.
In the marketplace context, we have found it useful to separate nonconsumers from what we call nonproducers, i.e., individuals or businesses that are constrained in their ability to offer supply in the market. For a marketplace to be disruptive, it must identify either new supply, new demand, or both — targeting individuals or businesses who were unable to profitably produce or consume goods and services in incumbent channels. And the most powerful disruptive marketplaces are often those that simultaneously connect nonconsumers with nonproducers.
For an example of a marketplace that is not disruptive, consider Angie’s List (as of recently, called Angi). Founded in 1995, it was built in response to the painstaking process homeowners endure to find, compare, and vet home service providers. Angie’s List cut through the time and effort this process required with a simple platform built on efficiency, trust, and simplicity. Existing providers list their services on Angie’s List in order to find new clients at a price point they are accustomed to, complementing the incumbent home services supplier network. The platform makes the market much more efficient.
Yet while incredibly valuable, Angie’s List does not change the structure of the home services market. It also does not make home services more affordable or accessible and does not find a way to turn nonconsumers into consumers.
By contrast, consider Outschool. It’s a marketplace of online courses for children that allows parents, educators, and others to create their own courses. Though certainly used by families who would otherwise be able to afford and access enrichment programs, Outschool’s business model also enables an entirely new population of families to take advantage of these opportunities. It not only enables new families to consume educational content, but enables a whole new population of educators to monetize their passions and expertise in algebra, ballet, or Pokémon arts and crafts through the platform.
Put another way, disruptive marketplaces make good on famed Silicon Valley investor Bill Gurley’s observation that internet marketplaces “literally create ‘money out of nowhere’” because “in connecting economic traders that would otherwise not be connected, they unlock economic wealth that otherwise would not exist.” When nonproducers and nonconsumers come together, tremendous opportunity awaits.
Bundles, Trust Wrappers, and New Ways of Transacting
Many marketplaces target existing supply and demand in a more efficient or trusted way — they improve existing transactions. Disruptive marketplaces, however, expand market participation by creating new types of transaction altogether. After examining what venture capital firm Andreessen Horowitz identified as the top 100 marketplace startups in 2020 (plus a number of our own favorite marketplaces), we have identified four novel transaction types that can unlock disruptive potential.
These novel transaction types are not mutually exclusive. In fact, because nonconsumption often derives from many distinct sources, marketplace disruption often entails creating new transactions along several dimensions at once.
Smaller supply units.
Before the advent of marketplaces such as Airbnb and Getaround, most people’s homes, apartments, and cars were nonproductive assets: spare couches and bedrooms earned no rents and cars were parked most of the time. The new platforms, however, allowed those assets to be monetized. They made it possible to carve homes up into smaller rental units and enabled vehicles to be rented over short time horizons, selling a bite-sized unit of supply.
These “smaller supply unit” transactions are often disruptive because they come at a lower price, which makes the product affordable to a new group of people. This also produces a transaction type that incumbents are unable to copy because their business model is optimized for larger-unit (and therefore higher value) transactions.
Other marketplaces have created new transactions by aggregating rather than carving up supply — and in some cases, aggregating demand. Classpass bundles excess supply of exercise class slots into a “membership” that customers could buy to access classes across multiple fitness studios. Individuals could sign up for classes flexibly and frictionlessly according to their interests, whereas previously they would have had to buy classes or memberships at individual studios.
As a corollary to the smaller supply unit transaction type, bundles are generally inconsistent with incumbent business models. Though gyms, for example, offered individual classes before the advent of Classpass, the prices were so high that prospective customers were effectively forced into monthly memberships. Thus, for someone who previously couldn’t afford a monthly membership, a bundle of class units across gyms can offer a “good enough” whole that is greater than the sum of its parts, creating demand for a new transaction entirely.
One of the simplest ways marketplaces can create new transactions is by building infrastructure that enables new suppliers to enter the market. Countless would-be online sellers, for example, have been held back by the sheer complexity of the web design, fulfillment, and inventory management skills required to run an ecommerce business. Amazon Marketplace lowers each of those barriers significantly, enabling millions to operate their own online stores. Similarly, Substack (an online platform for writers), Patreon (a membership platform for creatives), and other platforms have made it substantially easier for writers, artists, and others to market and monetize their expertise and skills, unlocking a new talent pool.
Reducing supply barriers presents disruptive opportunities in two ways: First, building a platform that turns nonproducers into producers creates competition, which ultimately lowers the price relative to existing market offerings. Second, matching new supply and new demand enables a degree of personalization that incumbents simply cannot match at a comparable price point.
Certain transactions don’t exist (or are highly constrained) because a trust barrier prevents demand from engaging with supply. Health care data, for example, is highly sensitive and thus difficult to share in a trusted way — much less exchange or sell. But blockchain solutions make it possible for health providers to share data in a trusted fashion without need for intermediaries. The “wrapper” in this case is cryptographic technology that enables a publicly verifiable transaction ledger that records where data has been sent. Such trust wrappers create opportunities for disruption by facilitating transactions among parties who would otherwise be unable to access the market.
Applying the Framework: Residential Real Estate
Our taxonomy of new transaction types offers a powerful set of lenses for any investor, entrepreneur, or manager looking to identify truly disruptive marketplace opportunities. To see how this can work, consider the residential real estate industry.
Smaller supply units.
Many prospective home buyers are unable to purchase because they face a chicken-and-egg problem: they do not have the resources (i.e., a down payment and/or sufficient credit opportunities) to buy a house outright, yet without the appreciation of home equity, they may never be able to. This suggests a potential smaller supply unit marketplace strategy: Rather than buy homes outright, could an entrepreneur make it possible for residential buyers or investors to instead buy smaller home equity units?
Real estate startups Unison, Noah, and Point already enable homeowners to sell portions of their home equity, and it’s not hard to imagine these sorts of transactions being made available to prospective home buyers as well. For example, a would-be homebuyer could invest a small amount of money into the equity of one or more homes which they are confident will appreciate. When the home is sold (or when the homeowner pays back the equity financing), the prospective buyer gains from the appreciation, which improves their ability to afford a larger down payment in the future. This type of marketplace would directly target nonconsumption, and potentially tap into nonproduction, by allowing homeowners capitalize on their home’s equity without having to sell the entire home. This offering would also be completely orthogonal to traditional lending and real estate brokerages, who profit on the sale of entire home units.
The financial barrier to developing an entire multi-family home or condominium complex is typically quite high; this results in nonproduction among individuals who can’t deploy sufficient capital to take on real estate development projects. But if we bundled the financing, several entities would be able to co-finance a building investment project in an attractive market. This bundle of supply may be well matched in a marketplace which bundles demand, becoming like a version of Kickstarter for real estate development. A group of investors could propose property types and locations, with prospective buyers or renters agreeing to move into the new units once they are completed.
This marketplace has the potential to expand access for both supply and demand that are constrained by capital and lending requirements. New developers, as well as those with ideas for properties in up-and-coming areas, could lower the cost of development by aggregating demand upfront, resulting in more affordable offerings.
For decades, the residential real estate market in many countries has been fully intermediated by real estate agents who extract a significant share of the transaction price from sellers. Agents’ market power has come in large part from controlling access to the information and resources needed to buy and sell a home — property listings are often proprietary and can only be created or viewed by agents. But Redfin, Zillow, and other platforms are directly addressing this pain point, making listings publicly accessible and creating technology prospective sellers can use to list their homes directly. As a result, sellers are starting to cut out the intermediaries; in Zillow’s case, homes are now being purchased outright on the platform, a transaction which immediately taps into potential nonproducers (home sellers).
As supply barriers continue to come down, nonconsumers will participate in real estate markets that were previously inaccessible due to the sheer cost of brokers fees. Although 3% on an expensive home purchase may not make a significant difference to most prospective buyers, a one-to-two month broker’s fee on a rental property is prohibitive for many. Platforms that remove these expensive intermediaries will thus create opportunities for suppliers to transact with nonconsumers.
Many prospective home buyers are constrained by a point-in-time debt-to-income analysis from their bank, which limits the available pool of homes that can be purchased. However, many individuals’ short and long-term income potential is significantly higher than what they earn today. Many universities recognize such an opportunity in their faculty members and provide home loan certifications that help banks see less risk than what a junior faculty salary may indicate. Imagine a platform that creates similar trust wrappers for homebuyers. By analyzing industry growth, firm market value, and an individual’s professional track record over the prior seven years, a platform could generate a stamp of approval that offers increased credit access to those seeking to purchase a home — particularly in markets where home prices continue to rise.
The impact of such a system on nonconsumers is straightforward: more individuals would have access to mortgages than previously possible. On the supply side, the trust wrapper might enable smaller banks and other entities to compete in a mortgage market that is currently dominated by large banks. While larger, more established financial institutions will be happy to continue serving their usual customer base, smaller, industry-focused, or regional banks can begin a disruptive march among customers traditional banks may be inclined to ignore.
These real estate examples illustrate how our framework can be used as a high-level roadmap for identifying marketplace opportunities in any given industry. And though of course none of the ideas suggested here are guaranteed successes, they serve as a starting point for entrepreneurs looking for ways to create disruptive growth.
And while marketplace businesses are complex to execute and manage, disrupting through marketplaces is paradoxically less daunting than it may seem. This is, in part, because marketplace disruption can take advantage of existing market forces.
Every market is already at work trying to achieve efficient outcomes among participants — who already have some desire to transact. Marketplace builders simply need to identify transactions the market would like to complete, but that are blocked because of some inherent friction. Once an entrepreneur figures out how to eliminate that barrier through marketplace design, the market quickly takes care of itself. And unlike in other innovation categories, a disruptive marketplace can often move up-market directly, because whatever transaction efficiencies it finds can be applied directly to improve transactions among pre-existing consumers and producers.
Moreover, disruptive marketplace transactions occur at a different level of abstraction from most incumbents, which leads to greater flexibility. For example, Marriot may think of itself as in the “hotel business” — as a result spending countless resources improving their properties and services. But for most Marriott guests, the high-level transaction is not “hotel services” but simply “travel housing.” Airbnb focused on that higher-level transaction unit and reduced barriers to participating in those transactions as much as it could — creating and capturing tremendous value along the way.
The past two decades have seen the rise of many valuable marketplace businesses, but the most iconic, category-creating ones have disrupted traditional value networks with the novel transaction types described here. Understanding such disruption helps us understand how those marketplaces succeeded — and provides a framework for innovators looking to identify the next big marketplace opportunities.
What is a dedicated IP address and why do you need one?
Whether you’re new to remote work or a seasoned pro looking to up your game, you might be wondering, “What is a dedicated IP address?” or “Do I really need a dedicated IP for remote work?” Both are valid questions — especially now.
Since the shift to remote work, businesses and employees have dealt with increasing security risks and threats. Many telecommuters use VPNs or SSL certificates for a secure remote work experience, but it’s often not enough. Business owners and organizations are also advised to get a dedicated IP address for an added layer of protection.
The question is – is a dedicated IP worth it if you’re working outside of a traditional office space?
Before you decide whether to get a dedicated IP address or not, read on to learn to basics and benefits, including:
What is an IP address?
An internet protocol (IP) address is a unique address assigned to individual computers, servers, domains, or devices over the internet or a local network. Whenever you access a website, your computer communicates to the webserver through the IP address.
IP addresses consist of four sets of numbers, each separated by periods (x.x.x.x), ranging from 0 to 255, which comes out to around 4.2 billion combinations.
The conventional IP address we’re used to is the IPv4 (IP version 4). It was created in the 1980s and used a 32-bit system that didn’t account for how fast the internet would grow. We have long since exhausted those 4.2 billion combinations. Thus, a new internet addressing system called IPv6 was deployed in 1999.
IP addresses and the Domain Name System (DNS)
IP addresses aren’t random. They are produced and assigned by the Internet Assigned Numbers Authority (IANA), part of the Internet Corporation for Assigned Names and Numbers (ICANN).
The ICANN is a non-profit organization that maintains internet security. One of its functions is to maintain the domain name system (DNS). You can think of the DNS as a phonebook that matches domain names to IP addresses.
The DNS was born because IP addresses are composed of a string of numbers – making it difficult for users to remember which numbers belonged to which website. Without the DNS, you would have to type in “184.108.40.206” to get to Google and other IP addresses to get to other websites.
How IP addresses work
Your network, devices and the internet use IP addresses to communicate with each other. Let’s look at how IP addresses work when connecting your device to the internet.
Before your device can access the internet, it must connect to a network. That network would likely be your Internet Service Provider (ISP) if you’re at home, while it would be public Wi-Fi if you’re outside your home network.
Internet activity goes through the ISP, which is shared with your device using an IP address. In this case, the ISP assigns an IP address to your device. That assigned IP address, however, is temporary. When you turn your modem or router off, your device gets disconnected from the network. Or, when you travel, your device uses another network to connect to the internet.
That new network you connect to (hotel, coffee shop, or airport Wi-Fi) shares a different IP address. This is but one of many examples of how devices use IP addresses to communicate with each other.
There are several types of IP addresses, which we’ll explore in the next section.
Different types of IP addresses
There are different types of IP addresses, which are further subdivided into different categories.
Consumer IP addresses and website IP addresses are the main types of IP addresses.
Consumer IP address
Consumer IP addresses are assigned to devices connected to the internet. There are two kinds of consumer IP addresses: private and public IP addresses.
These types describe a network’s location: private IP addresses are used inside a network, while public IP addresses are used outside.
Private IP vs. Public IP
Your network router assigns private IP addresses to your devices to communicate with it internally. In contrast, your ISP assigns public IP addresses. The public IP is the primary address associated with your internet network.
Private IP addresses exist because multiple devices connect to a household’s network. Modern homes have computers, smartphones, tablets and even Bluetooth-enabled devices such as speakers, printers or smart TVs connecting to a router at any given time.
Because your router connects to so many devices, it needs a way to identify each item. Thus, it generates private IP addresses that differentiate each device on the internal network.
While each device connected to the network has its own private IP address to communicate with the router, remember that all devices simultaneously access the internet through the router as well. Thus, they all have the same public IP address.
Public IP addresses are further classified into two kinds – static and dynamic. These types describe a network’s permanency.
Dynamic IP vs. Static IP
A dynamic IP address is an IP address that often changes, while a static IP address does not change. ISPs and web hosting companies automatically assign dynamic IP addresses while they manually create static IP addresses.
Dynamic IP addresses are the most common type of IP address. They are only active for a certain amount of time, after which they expire. Once the computer disconnects from the network, it receives a new IP address or requests a new one.
Advantages of dynamic IP addresses include cost savings and security. ISPs buy multiple IP addresses and assign them to users. Automating the movement of IP addresses means there’s no need to get users their original IP addresses. Once a user is disconnected, ISPs can reassign a new IP address and give new users the old one to use.
Additionally, a changing IP makes it harder for criminals to hack into your network.
Individuals and businesses seldom use static IP addresses. Servers hosting large websites or providing email and FTP services use static IP addresses so other devices can easily find them on the web.
Website IP address
The website IP address is the other type of IP address besides the consumer IP.
If consumer IPs are assigned to devices connected to the internet, website IPs are used for web hosting packages. There are two types of website IPs: shared and dedicated.
We’ll be focusing on these two types, specifically dedicated IP addresses.
Dedicated IP address vs. Shared IP address
You can get a dedicated IP address and shared IP address from hosting providers, but the main difference is the number of users assigned to it.
Dedicated IPs are exclusive to a single account, while a shared IP is assigned to multiple users.
Shared IP addresses are often common to shared hosting accounts. This type of web hosting plan hosts multiple websites on the same server, making it possible for these domains to share an IP address.
But, while shared IP addresses are common in shared hosting plans, it is also possible to have a shared IP address without a shared server. For instance, some Managed WordPress hosting plans share IP addresses but not server resources.
Shared IP addresses are often dynamic IPs, while dedicated IP addresses are static. You have sole use over them once they’re assigned to you.
Important: Don’t confuse a dedicated IP address with a dedicated server; you can get a dedicated IP address without signing up for a dedicated hosting plan.
Benefits of a dedicated IP address
There are several benefits to having a single IP address dedicated to your use. It’s fast and secure, and there’s a smaller chance of your IP getting blacklisted.
Let’s explore each benefit in detail:
1. Secure remote access
A dedicated IP address allows employees to connect to company resources securely. It enables you to control access to specific resources and sensitive company assets. You can do this by allowing specific IP addresses and restricting access to servers and gateways you choose.
2. Reduced risk of IP blacklisting
Another benefit of a dedicated IP address is safety and location privacy. Some people prefer it when they can’t be traced.
While sharing an IP address is generally safe, it risks country-specific blocking of your website. Other websites on your server might perform illegal activities such as sending out spam emails, viruses, or malware that could get your websites blocked by search engines.
When you use a dedicated IP address for remote work or otherwise, there is zero chance of your IP getting blocked — unless you do something malicious intentionally.
3. Faster and safer file transfer
A dedicated IP ensures faster site speeds. You don’t have to contend with web traffic because you’re the only one using the IP address.
A dedicated IP also allows you to build a file transfer protocol (FTP) server to share files within an organization. A private FTP server offers better protection and a faster file transfer rate.
4. Improved email deliverability
You will benefit from a dedicated IP address if you send large volumes of emails; anything above 100,000+ per year is considered a large volume.
The main reason?
An IP’s reputation can impact your email delivery rate.
Email services such as Gmail and Yahoo trust emails from dedicated IPs more than those from shared IP addresses. They often double-check emails from shared IP addresses because spam emails are more likely to come from accounts hosted on those IPs.
5. Direct access to your website
Dedicated IP addresses allow you to access your website directly using the IP address since it’s the only domain mapped to that IP. For example, typing in “220.127.116.11” would lead you directly to Google because that is its dedicated IP address.
While it’s not the main advantage of having a dedicated IP, it is a handy perk when domain servers are down.
Dedicated IP address: A must-have for remote workers
Bottom line: Beef up your cybersecurity efforts with a dedicated IP address. It securely connects you to your remote server and improves site speed. That’s a win-win for remote workers and their employees and clients.
3 Ways Marketers Can Earn — and Keep — Customer Trust
A 2021 survey of 1,000 consumers concluded that more than 80% consider trust a deciding factor in their buying decisions, despite the fact that only 34% trust the brands they use. As trust in institutions diminishes, consumers are increasingly skeptical of where they put their money and receive their information. The author recommends three marketing strategies for brands to maintain and foster trust in their brands: 1) Do not overspin, 2) Avoid half-truths, and 3) Read the room and adjust.
It is no big secret that our world has a trust problem. Amid a global pandemic, economic crisis, and political instability set against a backdrop of deep cultural malaise, people no longer know where (or whom) to turn to for dependable information amid widespread disinformation and propaganda.
Similarly, government leaders, briefly seen as the most trusted institutions at the beginning of the pandemic per the 2021 Edelman Trust Barometer, squandered that goodwill when they could not halt the virus or restore economic stability. And per the 2021 Edelman Trust Barometer, trust in U.S. CEOs is at 47%, and credibility has basically hit rock bottom in Japan (18%) and France (22%) as consumers wake up to the indignities and absurdities of unfettered capitalism.
Yes, trust is in short supply, yet it remains a vital currency in sustainable customer relationships. A 2021 survey of 1,000 consumers concluded that more than 80% consider trust a deciding factor in their buying decisions, despite the fact that only 34% trust the brands they use. Consumers, of course, are not a monolith. And as it so happens, age is a key differentiator in understanding the intricacies of the public’s confidence in and perception of the news media, in particular.
Per a Gallup/Knight Foundation survey, older Americans tend to rely on maybe one or two sources for all their information, and they prioritize brand reputation and political slant when evaluating an outlet’s credibility. Conversely, younger adults (18- to 34-year-olds) are more likely to gather information from numerous sources and place more of a premium on how open that outlet is with its facts, research, and processes.
Younger consumers also view national news outlets with more skepticism, with just 29% saying they trust them compared to 41% of adults over 55. A credible media landscape is always critical, but with the line between marketing and media blurring each day, news organizations’ morale fiber can sometimes be linked to that of a brand.
To summarize, older adults are more brand-conscious, while younger adults are more process-conscious. As marketing experts, we can apply these findings to our brand messaging to develop credibility with our intended audiences as they age and evolve. Here is how.
1. Do not overspin.
Though Edelman found that trust in CEOs hit an all-time low in 2021, the same study revealed that businesses are still considered more trustworthy than governments, NGOs, and the news media. With such power comes great responsibility. CEOs and other business leaders must address today’s most pressing challenges and focus on societal engagement with great fervor. According to the 2021 Edelman Trust Barometer, 53% of respondents believe that business leaders have a duty to fill the information void left by the news media.
This is not the time for corporate platitudes. People are smarter than you think. If you attempt to fool them, they will find out — and the hit to your credibility will outweigh any short-term gains that you made.
Think back to summer 2020, when PR teams across industries jumped to distribute public denouncements of systemic racism. People were quick to call out the performative allyship of companies such as Glossier, whose public anti-racism pledge was at odds with former employees’ recounts of on-the-job discrimination and toxicity. So make sure you back up any announcements with actual steps. For example, Ben & Jerry’s is not one for empty promises, and its statement on racial injustice held a lot more weight because company leaders have a track record of on-the-ground activism.
Keeping your message free of excessive spin goes a long way with the public and protects you from potential PR gaffes down the line.
2. Avoid half-truths.
Pfizer has been in the news a lot this past year — mostly for good reasons. CEO Albert Bourla and his team cleared myriad hurdles to develop an innovative, effective Covid-19 vaccine in record time. But back in 2006, Pfizer was in the news for less-than-glowing reasons after launching a $258 million ad campaign for a cholesterol drug with Robert Jarvik, inventor of the first permanent artificial heart, as the face of it.
The tagline — “Just because I’m a doctor doesn’t mean I don’t worry about my cholesterol” — was catchy, but there was one problem: Jarvik was not licensed to practice medicine and, in fact, had never practiced medicine. The ads drew swift criticism that resulted in a congressional investigation and millions in monetary losses for Pfizer.
In the court of public opinion, omission is akin to lying. If a claim requires omission, then do not use it; and if you do make a mistake, own up to it. In fact, you may find consumers more forgiving if you show any semblance of contrition. Being vulnerable about where you have fallen short in the past suggests honesty, which sits at the foundation of consumer trust, brand affinity, and long-term engagement.
3. Read the room and adjust.
When was the last time you checked the pulse of your customer base? You should be continually evaluating the effectiveness of your marketing efforts by asking yourself these key questions:
- What is our customer sentiment? Negative? Positive?
- What are our favorability ratings? Are they rising? Dropping?
- Is our audience engaging with our content?
- And did we follow through on our promises?
By regularly checking whether consumers are picking up what you are putting down, you will find that you can more easily meet and even exceed their ever-evolving preferences. For example, Bryanna Evans, the social media manager at home fragrance brand SECC, told Buffer that her team’s social media-powered strategy focuses on in-feed customer engagement. Not only does the social team respond whenever someone leaves a comment, but it also nurtures consumer interest by regularly posting quizzes, contests, and giveaways. As a result, SECC has built an army of loyalists and grown its monthly revenue from $20,000-$30,000 to more than $100,000.
The fight for consumer trust is ongoing — and it will not be going away anytime soon. But savvy marketers can use authentic brand messaging to engender stronger customer relationships that stand the test of time. Implement these three steps to begin building a reputation as a reliable information source that people depend on.
How to Improve Email Deliverability
If you’re running a business, you need an email list. And you need to send great emails, obviously. But if those great emails aren’t making it to people’s inboxes, then what’s the point?
If you’ve been putting a lot of hard work into your email marketing but not seeing the results you want, then maybe your email deliverability could use some help. I’m going to share the four key factors that will help make sure more of your emails stay out of spam and land in the inbox.
And if you don’t have an email list yet, this will set you up for success right from the start!
The Four Pillars of Email Deliverability
When it comes to email, it’s all about deliverability. You can have the fanciest automations, the best copy, the best upsells, downsells, follow-ups… But if nobody’s getting those emails in their inbox, then it’s all for nothing.
This is where you’re up against the algorithms of the email giants that control more than 50 percent of the world’s inboxes: Google, Microsoft, and Yahoo!. You’ve got to understand what they’re looking for—and play by their rules.
The good news is that it’s not that difficult to stay on the good side of the algorithms. Anyone can avoid the spam folder as long as they follow a few key guidelines.
There are four main pillars of email deliverability, and they form the acronym RACE:
Pat and email deliverability expert Adrian Savage covered these four pillars in depth in SPI episode 498:
In business, as in everything, reputation matters. If you’ve got a lousy reputation, no one’s going to want to listen to you.
When it comes to email marketing, you need to focus on what’s known as your sending reputation.
You see, the big mailbox providers are monitoring the emails you’re sending, and most importantly, how people are reacting to them.
The more they see people marking your emails as spam or ignoring or deleting them, the more they’re going to mark down your sending reputation. And they’re more likely to send your emails right to the spam folder.
That’s the simple version, but it means that everything you do with your email marketing has to be focused on preserving and improving your sending reputation.
How to Improve Your Sending Reputation
So what can you do to improve and maintain your reputation with the big email services?
First, use common sense. If you feel like you’re gaming the system, you probably are—and you’re eventually going to get found out.
A (not so) great example is downloading lists of email addresses from the internet.
The only legitimate way to get ahead now with your email list is to send emails only to people who have specifically asked you to contact them.
If you buy a list and start emailing people who haven’t given you permission, you’re much more likely to get spam complaints, which will hurt your sending reputation.
And what’s the only definition of spam that matters in the eyes of the mailbox providers? Whatever the recipient thinks it is.
There are also businesses out there, like Spamhaus and Cloudmark, that operate email addresses called spam traps. If you send an email to a spam trap address, then you may be added to blocklists that tell the world you’re a low-reputation sender.
If you do decide to buy a list of addresses for some reason, make sure you really trust the person providing the data—it’s much better to control it yourself.
Next, you’ll want to clean your email list regularly. That way, you’ll avoid hitting what’s called a recycled spam trap.
Here’s how that works.
Suppose 10 years ago you had a Hotmail address that you’d stopped using, and Microsoft canceled your account. For the next few months, if anyone tried to email you, they’d receive an error saying the mailbox didn’t exist. But a few months later, Microsoft might reopen that address and repurpose it to catch senders who weren’t looking after the hygiene of their email list.
Send enough emails to spam trap addresses, and you’ll end up on a blocklist.
So, only send emails to people who have said they want to hear from you, and keep your email list clean so you don’t get caught in recycled spam traps.
Authentication is the second crucial piece of improving your email deliverability.
It’s all about telling the world that you’re sending legitimate emails.
You’ve probably received spam from someone spoofing an email address that isn’t theirs. It’s relatively easy to spoof an address you don’t own—what’s not so easy is to authenticate one.
Authentication is what sets you apart from the spammers, and there are two steps you need to take to authenticate your email address.
The good thing is, this is usually a one-time thing you do when you’re setting up your email platform.
The two authentication steps involve a couple of acronyms.
Domain Keys Identified Mail (DKIM)
The first one is domain keys identified mail, or DKIM. This is how you get your email platform to digitally sign every email that you send.
You’ll need to look at your platform to determine how exactly to configure DKIM, because they all do it slightly differently. If you’re stuck, then find someone who can help you, because it is probably the most important single thing that will make the difference between hitting the spam folder and hitting the inbox.
Here’s guidance on setting up DKIM with some of the most popular email service providers (ESPs):
Sender Policy Framework (SPF)
The second side of authentication is something called sender policy framework, or SPF.
SPF helps identify which mail servers are allowed to send email on behalf of your domain. This communicates which platforms you trust to send emails on your behalf, which can reduce the incidence of email spoofing—people pretending to send mail as you. Like DKIM, it’s a one-time thing, but crucial.
Doing those two things—setting up your SPF and DKIM settings—is going to make a huge difference in deliverability. And don’t be afraid to seek help if you need it.
Here’s guidance on setting up SPF with the popular ESPs:
In the recent past, it was relatively easy to avoid the spam folder by being careful about the content in your emails: don’t use swear words, don’t mention Viagra, and don’t mention “free.”
Today’s spam filters are much more sophisticated, and the big email providers use a ton of artificial intelligence to figure out what’s junk and what’s legit.
In 2005, you might have gotten away with writing “free” as “fr.e–e” in an email, but today that’s a one-way ticket to the spam folder.
Making it to the inbox in 2022 is a lot more about being authentic with your email content. Here, another acronym comes in handy: WILF, which stands for:
Words are important, obviously. And when it comes to email deliverability, it means writing emails the way you’d have a conversation with someone.
Write like yourself. The more your emails sound like they’ve been coming from you, the more authentic it sounds, the more likely those big sophisticated algorithms are going to recognize it as authentic.
In most cases, shorter is also better. Don’t cut it down at the expense of not getting your message across, but don’t waffle unnecessarily. Because, let’s face it, people’s attention spans are getting shorter.
At the same time, don’t stress too much about content either. There are no hard and fast rules here, and you don’t want to follow a rule at the risk of ruining your message.
You can always send a few test emails and see what happens. Just remember, however, that email has evolved, and no two people have exactly the same email experience anymore. The same email might end up in Spongebob’s inbox and Squidward’s spam folder.
But you can still learn some things by looking at the big picture of what you’re sending over time. If you notice that emails written a certain way are getting delivered more often than others, use that as a data point to guide how to craft your email content going forward.
Images and Links
Here’s where things get even more interesting. To include images or not include images in your emails? And what about links? One? None? Many?
First, remember that there are exceptions to every rule. But in general—and testing bears this out—the more images you’ve got in an email, the more likely it’s headed to the junk folder. And the same goes for the number of links.
One of the quickest ways for an email to be viewed as a promotion by Google is if it has a graphical banner at the top, because that makes it look like a promo. So just cut to the chase with your message.
If you need images in the middle of the email to reinforce or illustrate things, that’s a different story. But only include them if they’re going to actually add value, not just for the sake of it. If you can manage three or fewer images in total, perfect.
It’s the same with links: the more you use, the more your email looks like a promotion. One of the biggest mistakes people make is using a bunch of little social media icons in their email signature. Before you know it, you’ve got five additional images with links in your email, you’re in the promotions tab.
When it comes to links, also be careful about linking to websites you don’t control. You can’t always be certain whether the domain you’re linking to has a good domain reputation or not. It’s much better to only link to content that you’re in control of—like the stuff on your own website.
Finally, there’s frequency. The more frequently you send emails to the people who want to receive them, the better you’re going to do. In the good old days, it was sufficient to send an email newsletter out once a month, but these days, mailbox providers are looking for consistency and engagement (which we’ll talk about in a second).
The more frequently you send emails to the people that want to read them, the better it’s going to look for your engagement. If you’re sending out an email three times a week, then you’re a lot more likely to reach more of your audience more quickly than if you’re sending one email a month.
That doesn’t mean you need to send an email every day—if you can, then great, if you’ve got enough to talk about—but the more frequently you can share some really cool value, the more people are going to love you, and more importantly, the more the mailbox providers will love you as well.
While authentication is something you set up once and pretty much forget, engagement is something you need to pay attention to on an ongoing basis.
By engagement we’re talking about, are people reading your emails? Are they opening them? Are they clicking the links? Are they actually reading them properly? Or are they just deleting it without reading?
One of the worst ways to hurt your engagement is when you send something out, it lands in the spam folder, and no one rescues it.
When someone signs up to your email list for the first time, that may be the only chance you’ve got to keep your emails out of their spam folder. So direct them to a thank-you page that instructs them to check the spam folder for your first email and move it to their inbox if need be. If they don’t, they may never see another email from you in their inbox again.
That’s the most important thing.
The other is maximizing the number of people engaging by improving your open rates. Here’s where it’s important to clean your email list regularly, so you’re only sending email to the people who are likely to read it.
It can be scary to clean your email list regularly—because it means deleting people from your list—but it’s absolutely a great thing to do for your email engagement, and for the health of your email list.
Why? It will show Google and Microsoft and Yahoo! that what you’re sending is of greater interest to your subscribers. The higher they see your open rate, the more likely they are to increase your domain reputation. The better your reputation, guess what? The next email you send is more likely to land in the inbox. It’s a virtuous cycle.
More Email Marketing Resources
If you’re just getting started building your email list, the best time to start thinking about and implementing these email deliverability best practices is now.
And if you’ve had a list for a while and things have gotten stagnant, the best time to start is… also now.
If you need more support with your email marketing, you’re in the right place! Here are a few more resources to help you build an audience and create more revenue with a robust email marketing practice:
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