The 20 minute email behind a $22 million company

Table of contents

  1. Let’s look at CD Baby
  2. What Derek got right
  3. The whole customer lifecycle matters
  4. Your last interaction matters more than initial acquisition

Marketers are supposed to drive leads for sales to close.  Or bring in orders for shipping to fulfill. Or bring in SaaS users for product folks to service. Once the customer is signed up, they’re moved down the customer lifecycle and handed off to a different department. But that’s forgetting arguably the single most powerful marketing channel: word of mouth.

Let’s look at CD Baby

Back in 1998, Derek Sivers built CD Baby after seeing how many of his fellow musicians needed help getting their records on this new thing called the “internet”[1. Anything You Want by Derek Sivers]. Over the next decade, it continued to grow rapidly (despite the ”Dot Bomb” bubble that wiped out most internet companies), and in 2008 the company was acquired for an alleged $22 million[2. The Most Successful E-mail I Ever Wrote].

What Derek got right

As a musician who also built websites, Derek knew how to enthrall a crowd, and one of his primary goals for CD Baby was to “to make people smile”.  A few months after building the initial ecommerce site, he decided that the generic order confirmation email wasn’t carrying its weight. So in 20 minutes, he rewrote that generic order confirmation email into something magical:

Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow. A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing. Our world-renowned packing specialist lit a local artisan candle and a hush fell over the crowd as he put your CD into the finest gold-lined box that money can buy. We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to you, in our private CD Baby jet on this day. We hope you had a wonderful time shopping at CD Baby. In commemoration, we have placed your picture on our wall as “Customer of the Year.” We’re all exhausted but can’t wait for you to come back to CDBABY.COM!! Thank you, thank you, thank you! Sigh… We miss you already. We’ll be right here at www.cdbaby.com patiently awaiting your return. [3. CD Baby Shipping Confirmation]

The whole customer lifecycle matters

If Derek had been thinking in a rigid marketing approach, he quite easily would have focused on making creative ads or optimizing the checkout process - ignoring everything after the customer made payment.  But because Derek was thinking about the entire user experience, he designed everything - even the simple confirmation email - in alignment with his mission to make people smile. No Derek probably wasn’t thinking about marketing when he wrote this email, but the effect was powerful nevertheless[4. How CDBaby Built 20,000 Citations With One E-Mail].  If word of mouth is one of the biggest marketing drivers, perfecting the entire customer lifecycle is imperative to marketing success. And the email is just symptomatic of the larger philosophy behind CD Baby.  That making people smile thing?  That applied to artists and customers throughout the entire user lifecycle.  This was just one 20 minute email.

Your last interaction matters more than initial acquisition

Ok, so let’s take this one step further. Not only does the entire customer lifecycle matter, but studies have shown that last impressions probably matter more than the first. In 1993, scientists conducted a fascinating study that showed we as humans tend to prefer a longer duration of pain with a less painful ending than a shorter duration of steady pain. To test this, they ran subjects through two trials and then asked which they’d rather repeat:

  1. Subjects dipped one hand into 14° C water for 60 seconds
  2. Subjects dipped the other hand into 14° C water for 60 seconds _plus_ an additional 30 seconds as the temperature was raised to 15° C

Surprisingly to the rational mind, subjects tended to be more willing to repeat the second trial. Despite the fact that it was longer, the lower levels of pain at the end tended to make it appear more pleasant[5. When More Pain Is Preferred to Less: Adding a Better End]. Further studies confirmed this finding which is today called the “peak-end rule”.  According to this hypothesis, people tend to judge an experience by how they felt at (1) the peak and (2) the end. So remember: As a marketer your job isn’t done until the customer goes home. Their last experience is the first they’ll remember. (tweet this) PS. Go read Derek Sivers’ blog. It’s incredibly insightful.